Best Blue Chip Mutual Funds to Invest in India (2024) (2024)

Mutual funds have become a popular investment option in the financial market. A mutual fund provides investors with access to a mix of assets selected to achieve their long and short-term financial goals. One such type of fund that primarily invests in well-established companies is bluechip mutual funds. In this blog, we will learn about the best bluechip mutual funds, including their benefits, features, taxation, and more.

Best Blue Chip Mutual Funds in India 2024 (Based on 3Y CAGR)

Disclaimer: Please note that the above list is for educational purposes only, and is not recommendatory. Please do your own research or consult your financial advisor before investing.

Note: The data on the top 10 blue chip mutual funds in India list is from 19th June 2024 and the data is derived from Tickertape Mutual Fund Screener. Please note that the above-mentioned funds belong to large-cap category and growth plan.

🚀 Pro Tip: You can use Tickertape’s Mutual Fund Screener to research and evaluate stocks with over 50+ filters and parameters.

Overview of the Top Blue Chip Funds in India

Nippon India Large Cap Fund

Nippon India Large Cap Fund is an equity mutual fund scheme from Nippon India Mutual Fund. As of 19th June 2024, the AUM of this fund is Rs. 26,925.09 cr. with an expense ratio of 0.75%. The 3Y CAGR of the fund is 25.72%, and the 5Y CAGR is 20.42%. In terms of composition, the large-cap comprised the majority of the fund, at 83.04%, along with the largest allocation towards private banks, at 20.42%.

JM Large Cap Fund

JM Large Cap Fund is an Equity mutual fund scheme launched by JM Financial Mutual Fund. The AUM of the fund is Rs. 191.84 cr. as of 19th June 2024. The fund’s expense ratio is 1.01%. The 3Y CAGR of the fund is 22.86% and the 5Y CAGR is 19.95%. Furthermore, large-cap make up the majority of the fund, 80.39%, along with the largest allocation towards private banks, 12.47%

ICICI Pru Bluechip Fund

According to our list, ICICI Prudential Bluechip Fund is one of the best large-cap fund direct growth from ICICI Prudential Mutual Fund. As of 19th June 2024, the AUM of the fund is Rs. 54,904.23 cr. and has an expense ratio of 0.9%. The 3Y CAGR of the fund is 21.91% and the 5Y CAGR is 19.80%. Large-cap makes up most of the fund at 82.49% and the largest allocation towards private banks at 18.81%.

HDFC Top 100 Fund

HDFC Top 100 Fund is an equity mutual fund scheme from HDFC Mutual Fund. The fund boasts an AUM of Rs. 33,488.49 cr. as of 19th June 2024. The expense ratio of the fund is 1.04%. The fund’s 3Y CAGR is 21.31% and 5Y CAGR is 17.22%.

Baroda BNP Paribas Large Cap Fund

Baroda BNP Paribas Large Cap Fund is an equity mutual fund scheme launched by Baroda BNP Paribas Mutual Fund. The scheme’s main objective is to generate long-term capital growth from a diversified and actively managed portfolio of equity and equity-related securities. As of 19 June 2024, the fund’s AUM was Rs. 1,930.51 cr. The fund has an expense ratio of 0.89%, close to what most other large-cap funds charge. The fund’s 3Y CAGR is 21.12%, and its 5Y CAGR is 20.32%.

Invesco India Largecap Fund

Launched by Invesco India Mutual Fund, the fund invests in large-cap companies across different sectors to generate capital appreciation. As of 19 June 2024, the fund’s AUM is Rs. 1,036.65 cr. with an expense ratio of 0.76%. The fund has generated better returns compared to other funds in the same category. The 3Y CAGR of the fund is 20.85%, and the 5Y CAGR is 19.45%.

Edelweiss Large Cap Fund

Edelweiss Large Cap Fund is a large-cap mutual fund scheme from Edelweiss Mutual Fund. As of 19th June 2024, the AUM of the fund is Rs. 874.23 cr. The fund has an expense ratio of 0.65%, relatively lower than what other large cap funds charge. The 3Y CAGR is 19.92% and the 5Y CAGR is 19.37%, indicating consistent performance. The fund’s composition is largely dominated by large-cap at 79.48%, along with the largest allocation towards Private Banks at 18.61%.

Tata Large Cap Fund

Under our list of best performing large cap mutual funds, Tata Large Cap Fund is a large-cap mutual fund scheme from Tata Mutual Fund. Focusing on established market leaders, the fund prioritises stability and growth potential. As of 19th June 2024, the AUM of the fund is Rs. 2,103.31 cr. and has an expense ratio of 1.1%. The fund has recorded a 3Y CAGR of 19.35% and a 5Y CAGR of 17.81%.

Bandhan Large Cap Fund

Bandhan Large Cap Fund is an equity mutual fund scheme launched by Bandhan Mutual Fund. As of 19 June 2024, its AUM was Rs. 1,396.11 cr. It has an expense ratio of 0.92%. The fund’s 3Y CAGR was 19.16%, and its 5Y CAGR was 18.57%. The fund is largely dominated by large-caps, with 76.13% of its assets, and it has the largest allocation to private banks, with 19.48%.

Aditya Birla SL Frontline Equity Fund

Aditya Birla Sun Life Frontline Equity Fund is an equity mutual fund scheme launched by Aditya Birla Sun Life Mutual Fund. As of 19th June 2024, the AUM of the fund is Rs. 27,274.77 cr., with an expense ratio of 0.99%. The 3Y CAGR is 18.61% and the 5Y CAGR is 17.91%.

What is a Blue Chip Mutual Fund?

A blue chip mutual fund is an equity scheme that offers its investors a portfolio of stocks including financially sound and prominent companies. These are well-established companies, often industry leaders with strong market positions, reliable management, and competitive advantages. However, as per SEBI norms, bluechip isn’t an official category. Most mutual fund advisors and fund houses consider bluechip as a synonym for large cap funds.

How Do the Best Blue Chip Mutual Funds Work?

Blue chip mutual funds primarily invest in companies with large market capitalisation and strong financial performance. Fund managers, acting on behalf of investors, curate a diversified portfolio by strategically selecting the top 100 market-cap companies. The stocks in blue chip funds aim to deliver high returns.

What is the Difference Between Large Cap and Blue Chip Funds?

The terms “blue chip fund” and “large-cap fund” are often used interchangeably because they both refer to equity mutual funds.

According to SEBI’s product categorisation list, issued in October 2017, there is no mention of blue chip funds. So does this mean blue chip funds don’t exist? The key point is that any fund investing at least 80% of its assets in the top 100 companies by market capitalisation is classified as a large-cap fund, regardless of its nomenclature.

Large-cap refers to the top 100 publicly listed companies in India based on their market capitalisation. Whereas, blue chip stocks refers to the stocks of the largest and most financially stable companies in an economy. Large cap funds invest in blue chip companies. Hence, some AMCs choose to label them as ‘Blue Chip Mutual Funds’.

The main difference is that large cap funds have a broader view of investing in the top 100 companies, while blue chip funds may have a more concentrated portfolio of the largest and most reputable companies.

So, analyse and research more about equity mutual funds to make a sound decision.

How to Invest in the Best Blue Chip Mutual Funds?

You can easily invest in blue chip mutual funds by following these steps:

• Visit the mutual fund platform and login in your existing demat account. If you don’t have one, you can quickly open a demat account on smallcase by providing the necessary documentation and details.

• Next step is to identify top-performing blue chip funds through comprehensive research. You can easily select and learn more about the top-performing blue-chip mutual funds with the help of a financial tool like the Tickertape Mutual Fund Screener. With the help of 50+ pre-loaded filters, it helps you to create a comprehensive list by giving insights about the fund’s performance. Try it now!

• Once you’ve selected and made a list of the best blue chip mutual funds, access your account and navigate to the ‘Mutual Funds’ section. Then, decide whether to invest through a Systematic Investment Plan (SIP) or make a one-time lump-sum investment. If opting for SIP, determine your monthly investment date, input the desired amount, and select the preferred payment method.

The key is to thoroughly research and evaluate the best blue chip mutual funds before investing, taking into account factors like performance, risk, and costs. This may help you make an informed decision aligned with your financial goals and risk tolerance. However, before investing, it is worthwhile to consult a financial advisor.

Features of the Best Blue Chip Mutual Funds

Here are a few of the key features of the best blue chip mutual funds:

• Professional Management: The blue-chip mutual funds are managed by fund managers. These professionals conduct thorough research and analyse the market conditions to select the best blue chip stocks for the fund’s portfolio. The professional management adds a layer of confidence for investors entrusting their capital.
• Dividend Potential: Many blue chip companies are known for paying regular dividends. This provides investors with a steady income stream to complement the potential for long-term capital appreciation.
• Expense Ratios and Fees: Fund houses charge a fee to manage your investments in top blue chip funds. This fee is known as the expense ratio. It amounts to a certain proportion of the fund’s total assets. SEBI has capped the expense ratio at 2.5%, ensuring no company can charge more than this limit for managing your investment portfolio. However, it is wise to research and look for a scheme that offers a lower expense ratio to have maximum returns.
• Lower Risk: Bluechip mutual funds are generally considered lower in risk than other mutual funds. Since these are focused on large, established companies, it may help mitigate the potential for extreme market volatility.

Benefits of Investing in the Best Blue Chip Mutual Funds

Here are the potential benefits of investing in the best large cap funds.

• Capital Growth: Blue chip funds can be an effective way to grow your capital over time. They typically invest in large, reputable companies with a proven track record of consistent performance. These firms are often considered as industry leaders with strong brand recognition, reliable earnings, and the ability to weather economic downturns.
• Liquidity: Blue chip funds are very easy to trade, allowing you to buy and sell them whenever needed. Thus, this flexibility may allow you to manage your portfolio and respond to changing circ*mstances actively.
• Stability: Investing in a blue chip mutual fund exposes you to a diversified portfolio of financially strong companies. This can provide stability and potentially lower risk compared to investing in individual stocks or more speculative funds.

What are the Returns on the Best Bluechip Mutual Funds & How are they Calculated?

Calculating returns on the best blue chip mutual funds is a straightforward yet insightful process. Returns are primarily determined by tracking the fund’s Net Asset Value (NAV) over a specific period. NAV is the per-share market value of all the fund’s securities, accounting for expenses and liabilities.

Total returns include capital appreciation and income generated by the fund’s assets. Capital appreciation arises when the market value of the fund’s investments increases, while income includes dividends and interest earned. These returns are then expressed as a percentage, indicating the growth or decline in the fund’s overall value.

Investors often rely on standardised metrics such as the Compound Annual Growth Rate (CAGR) to gauge a fund’s performance over longer periods. CAGR considers the effect of compounding, providing a more accurate representation of the fund’s average annual growth.

It’s crucial to note that past performance does not guarantee future results. Investment decisions should be based on a thorough understanding of a fund’s strategy, risk profile, and alignment with individual financial objectives. By comprehending how returns are calculated, investors can make informed choices when considering the best blue chip mutual funds for their portfolios.

How to Choose the Best Blue Chip Mutual Funds for Investing?

When selecting blue chip mutual funds, it’s important to approach it cautiously. The first step would be to set clear and achievable financial goals for your investments. This means whether you’re saving for buying a new home or planning for retirement, having specific goals will guide your investment choices. Once your financial goals are clearly defined, It is important to review the fund’s performance regularly, the companies it invests in, and its expense ratio. At last, you can reinvest dividends and capital gains from your blue chip mutual funds, as this would allow your returns to grow through compounding, potentially boosting your overall gains. This strategy is especially beneficial for long-term investors.

Who Should Invest in the Best Blue Chip Mutual Funds?

Blue chip mutual funds in India can be a suitable option for those seeking stability and steady growth. These funds invest in well-established companies with a strong track record of financial performance and market leadership. This trait can make them suitable for conservative investors who want to gradually build wealth.

Risks Involved While Investing in the Best Blue Chip Mutual Funds

Let’s look at the potential risks of investing in the best blue chip funds.

• Market Risk: While blue chip mutual funds are generally considered stable and low-risk investments, it’s important to understand that even the best of them are susceptible to market volatility. Thus, one can expect short-term volatility and avoid panic selling during market downturns.
• Performance in Downturns: When evaluating blue chip mutual funds, consider how they have performed during past recessions or market crashes. Although these funds are generally more resilient than other investments, market conditions can still impact their performance.

Taxation on Blue Chip Mutual Funds as per the Union Budget 2024

Blue-chip mutual funds are taxed according to their asset allocation and holding period. Being aware of these tax implications is essential for making informed financial decisions. The Union Budget for 2024-25 has made significant changes to the taxation on equity mutual funds. Here we have listed these changes, along with the revised tax rates for equity mutual funds:

Short-Term Capital Gains Tax

Any gains made when holding equity mutual funds for less than 12 months are considered short-term capital gains. The Union Budget 2024-25 increased the tax rate on these gains to 20%. The STCG tax rate was previously 15%.

Long-Term Capital Gains Tax

For equity mutual funds held for over a year, gains are classified as long-term capital gains. The new budget introduces these key changes:

• Tax-Free Limit: The capital gains up to Rs. 1.25 lakh per year are tax-free. This is an increase from the previous limit of Rs. 1 lakh.
• Tax Rate: The gains exceeding Rs. 1.25 lakh are now taxed at a flat rate of 12.5%. This is an increase from the previous rate of 10%.
• Indexation: The benefit of indexation, which allowed investors to adjust the purchase price for inflation, has been removed for all asset classes, including equity mutual funds.

Indexation was a method that allowed investors to adjust the purchase price of assets for inflation. This adjustment reduced taxable profits when selling assets like property or gold. Previously, these long-term capital gains were taxed at 20%. The new rule imposes a flat 12.5% tax on all long-term capital gains but eliminates any indexation benefits.

Factors to Consider Before Investing in the Best Blue Chip Mutual Funds

Here is a list of factors that you can consider before investing in the large mutual fund companies:

• Consider Fund Size: While larger funds may seem more established and appealing, they can also impact the fund’s diversification, costs, and liquidity. However, it is important to be mindful of the increased risk associated with larger investments, especially during market downturns.
• Evaluate Expense Ratio: When selecting blue chip mutual funds, be sure to enquire about the expense ratio. Many mutual fund investors opt for a mutual fund with a low expense ratio as it means less of the fund’s assets are being used for operational expenses which potentially leads to higher returns.
• Fund Performance: It is important to review a fund’s track record over the last 3-5 years or more to understand how it has performed compared to similar funds and its benchmark index. Although past performance doesn’t guarantee future returns, it gives you insights into how the fund has been performing.

To Wrap It Up…

To conclude, bluechip mutual funds is an equity scheme that invests in large, established and financially stable companies. These funds have the potential to offer capital appreciation, stability, and regular dividends, due to which they are known to be relatively less risky. However, prioritise thorough research and/or consult a financial advisor before making an investment decision.

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Frequently Asked Questions (FAQs) on the Best Blue Chip Mutual Funds