The SBI Bluechip fund is predominantly a large-cap fund but also takes into consideration mid-caps if they’re available at good valuations and can not be ignored. One of the top mutual funds in India, this fund primarily aims to deliver medium to long-term capital growth through a balanced asset allocation investing in a combination of underlying funds consisting of equity, real asset and fixed income funds. As a matter of fact, they allocate nearly 20 per cent in mid cap stocks. This is reflected in the performance as despite being a difficult year for stock markets in 2016, they managed to lift their rating to five stars towards the end of the year to emerge as one of the best mutual funds. This fund also holds the distinction of being ranked as no. 1 fund in the Large Cap category by CRISIL for the quarter ended March 2017. Furthermore, in last 5 years, this has been one of the top performing mutual funds and has witnessed an impressive growth while producing an annualised mutual fund returns of 20.8%.
This fund has remained one of the most consistent performers in its category. It has managed to hold its own and stand out in terms of performance given the focus on bottom-up stock selection and investing in quality stocks that tide over long-term market volatility. It went through a tough phase in 2008 owing to the global financial crisis and slipped well behind the index. It was only in 2011, after exhibiting consistent performance, that distributors started taking the fund seriously. It consistently managed to outperform its benchmark and category and there was nothing stopping it ever since thus proving to be one of the best investment options. This is also attributed to the fact that they decided to adopt a process-driven approach to fund management. They recruited fund managers who managed to chalk out an investment philosophy of creating diversified portfolios that generated a consistent risk-adjusted return. This has allowed them to retain a Morningstar Analyst Rating of Bronze on this fund.
They also hired the right people. Sohini Andani, for instance, was hired for her meticulous approach to stock picking along with her bottom up approach to stock selection and has made some stellar bets on some ostensibly unlikely ventures. Along with CIO Navneet Munot and Head of Equities R.Srinivasan, these three have managed to galvanize the mutual fund performance and managed to ride the tide in both bull as well as bear markets. Adani along with her dynamic, driven team tailored an integrated investment process which includes valuation analysis, fundamental macro research, technical factors and quantitative analysis that ensures consistency across the portfolio. This is reflected in the performance as the fund managed to lose less than its benchmark in the market falls of 2011 and 2015. Andani through her astute ability to think in micro-detail also avoided weak cash-generating businesses like telecom, construction and infrastructure and instead focused more on the agrochemical sector. Her insights, come from market research, tracking global trends and keeping her ear, firmly to the ground. In 2016, the fund has also managed to maintain a significantly large debt/cash position with the position pegged at about 15 per cent in November 2016.
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