Should You Invest in Bluechip Mutual Fund?

Do you also want to know whether you should make an investment in blue-chip mutual funds? Several questions like these have been asked by investors all over the world in the given Covid-19 situation.

Investors all around are concerned about making an investment in blue-chip mutual funds in the present market scenario. Also, what return can they expect from their investment given a fixed duration?

Let’s begin by selecting a bluechip fund that has been considered a good investment option for investors over years.

What Is The Different Between Large-Cap MF’s V/s Bluechip Funds?

In order to understand the difference between the two, we would like to ask a few questions. Do you have a specific Bluechip scheme name in your mind or are you talking about large-cap mutual fund schemes that use Bluechip in their name? Examples are SBI Bluechip, Axis Bluechip Fund, etc.

Investors need to keep in mind that some large and mid-cap mutual fund schemes also use Bluechip in their name but mostly preceding by emerging. Common examples are Principal Emerging Bluechip Fund, Mirae Asset Emerging Bluechip Fund, among others.

Different Types of Schemes

Different types of schemes for instance large-cap and large & mid-cap schemes are set for different sets of investors. Large-cap is recommended for conservative equity investors, as this scheme invests in very large companies with very lesser volatility and highly stable than any other equity scheme. These investments have a horizon of five to seven years.

Large and mid-cap schemes are considered very risky as investors have to mandatory invest 35% of their corpus in mid-cap stocks. This investment is very very risky and highly volatile. It’s because of these features, this scheme is generally recommended to aggressive investors with a longer horizon investment period of seven to 10 years.

Please keep this in mind: Mutual Funds don’t guarantee any returns. One can expect around 10 – 12% returns of its equity investment over a long period. But this is totally based on historic returns with actual returns varying on stock market performance.