What Is Blue Chip Funds?

Investing in individual blue-chip stocks requires a large sum of money; alternatively, it carries high risk. Now you can also invest in a basket of blue-chip companies through a single investment, along with professional management, through Blue-chip Funds.

In today’s blog post, we will give you an overview of blue-chip funds along with the list of best blue-chip funds.

What are Blue-Chip Funds?

A blue-chip fund is a category of equity-oriented mutual fund that primarily invests investors’ money in large-cap companies, as measured by market capitalisation. This categorisation of mutual funds is defined by SEBI. These large-cap stocks are the top 100 stocks listed on the stock exchange based on market capitalisation. The large-cap fund invests at least 80% of its fund into large-cap stocks. The stocks in blue-chip funds are from different sectors such as banking, IT, pharma, etc. This fund is suitable for investors who seek long-term growth in the portfolio along with moderate risk.

Key Features of Blue-Chip Funds

The key features of blue-chip funds are as follows:

• Investment in Large Cap Stocks: The blue-chip fund primarily invests your money in the biggest listed companies based on market capitalisation.
• Diversification: The fund manager diversifies the fund across different large-cap companies. That reduces the portfolio concentration risk, allowing a user to have a diversified portfolio.
• Professional Fund Management: The amount invested in blue-chip funds is managed by the professional fund manager, who has an expert research team.
• No Guaranteed Returns: The returns from the investment in blue-chip funds are not guaranteed and are dependent on the market.

Best Blue-Chip Funds

1. ICICI Prudential Large Cap Fund
2. SBI Large Cap Fund
3. Nippon India Large Cap Fund
4. HDFC Large Cap Fund
5. Mirae Asset Large Cap Fund

Funds	Net Assets (Cr)	1 Yr Ret (%)	3 Yr Ret (%)	5 Yr Ret (%)	Base Expense Ratio (%)	Exit Load (Period)
ICICI Prudential Large Cap Fund	80,960	1.16	12.68	12.66	1.13	1.00 (30)
SBI Large Cap Fund	55,431	4.47	10.50	10.56	1.21	0.25 (30)
Nippon India Large Cap Fund	54,225	2.01	12.50	14.69	1.22	1.00 (7)
HDFC Large Cap Fund – Regular Plan	40,198	2.58	10.77	12.40	1.29	1.00 (365)
Mirae Asset Large Cap Fund – Regular Plan	38,729	2.95	9.71	9.13	1.30	1.00 (365)

Overview of Best Blue-Chip Funds

The overview of the best blue-chip funds is as follows:

1. ICICI Prudential Large Cap Fund: It was introduced by ICICI AMC in 2008. This is an open-ended scheme which mainly invests in large-cap stocks. Earlier, it was called ICICI Prudential Bluechip Fund and in the year 2025 it was renamed as ICICI Prudential Large Cap Fund. The fund’s approach is to hold large-cap stocks with a long-term view.
2. SBI Large Cap Fund: The fund was launched in 2006 by SBI Asset Management Company and is an open-ended fund in which an investor can invest and withdraw anytime. The primary aim of the fund is to generate long-term capital appreciation and primarily invests in large-cap companies. Investment in this fund gives an investor exposure to established companies listed on the stock exchange.
3. Nippon India Large Cap Fund: This is a fund offered by Nippon AMC which was launched in the year 2007. The investment strategy is diversified and provides exposure to the largest companies. An active fund manager takes active measures to perform best relative to the benchmark. This fund is for an investor with a long term investment period.
4. HDFC Large Cap Fund: This is one of the oldest funds in the blue-chip category. The fund was launched in 1996, and since its launch, the fund has gone through various market cycles. It has consistently posted market-beating returns. The fund aims to participate in the long-term growth of large-cap companies.
5. Mirae Asset Large Cap Fund: It is an open-ended scheme which was launched in 2008 and invests in the large cap segment of the stock market. The fund manager’s emphasis is on finding opportunities within existing large cap stocks. The fund was earlier named Mirae Asset India Equity Fund and it was renamed to Mirae Asset Large Cap Fund in 2019.

Read Also: Top 10 Blue Chip Stocks in India

Benefits of Investing in Blue-Chip Funds

The key benefits of investing in blue-chip funds are as follows:

• Lower Volatility: Investment in blue-chip funds comes with lower volatility than mid and small cap funds. Because it invests in established companies.
  Different Sectors: The portfolio of blue-chip funds contains stocks from different sectors such as banking, IT, pharma, etc.
• Liquidity: Blue-chip funds come with higher liquidity as large-cap stocks are actively traded by traders. Therefore, this fund provides better liquidity than small-cap funds.
• Long-Term Wealth Creation: The key objective of the blue-chip fund is to create wealth in the long-run. This fund is opted by investors having an investor horizon of more than 5 years.

Risk of Investing in Blue-Chip Funds

The key risk of investing in blue-chip funds is as follows:

• Market Risk: This is the key risk that comes while investing in blue-chip funds. When the overall market falls, the NAV of this fund also declines.
• Sector Risk: As the fund carries stocks belonging to different sectors. Any significant downfall in any particular sector can impact the performance of blue-chip funds.
• Performance Risk: The returns of this fund are dependent on the performance of the fund manager. If the fund manager fails to select the stocks that can perform better, the overall performance of the fund may fall.
• Exit Load: Certain funds come with an exit load, which means if an investor withdraws money before a stipulated time period, the fund may charge an exit load on it.

Who Should Invest in Blue-Chip Funds?

These funds are best for investors who wish to invest in the long-term growth of well-established companies with a solid financial background. Investors who have a long-term investment horizon with a moderate risk profile can opt for investing in blue-chip funds. Investors, however, should not invest in these funds if they are looking for a fund that provides stable returns. as blue-chip funds can be volatile during market downturns.

How to Invest in Blue-Chip Funds?

To invest in blue-chip funds, one can follow the steps mentioned below:

1. Visit Pocketful Website: The first step towards investment in a blue-chip fund is to visit the website of Pocketful. After which you are required to open a demat account by completing your KYC. The process will only take 5 min.
2. Look for the Mutual Fund Section: After login into your mobile application, there is a section known as invest in Mutual Fund. You can explore the blue-chip funds there.
3. Fund Selection: There will be a list of blue-chip funds in which you can invest. However, scheme selection should be based on various parameters such as its performance, etc.
4. Choose Investing Mode: Once you identify the fund in which you want to invest, the next step will be choosing the mode of investment. As there are two modes of investment, SIP and lump sum, you can identify one based on your need.
5. Monitor: Regular and periodic monitoring of the portfolio is necessary so that the underperforming funds can be removed from the portfolio.

Conclusion

On a concluding note, blue-chip funds are a suitable option for investors who want to invest in the top 100 companies of India. Investing in these stocks individually requires a large sum of money. Then come the blue-chip funds offered by various asset management companies, in which the fund manager identifies the stocks from the top 100 companies of India. However, investment in these stocks does not mean that you get guaranteed returns. However, before making any investment in blue-chip company, it is advisable to consult your investment advisor and evaluate your risk profile. 

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