A Complete Guide to Bluechip Funds and Large Cap Mutual Funds
05 Mar 2025 8 mins Mutual Funds
Investing in mutual funds is one of the best ways to grow wealth over time. If you're looking for stability, steady returns, and lower risk, then bluechip funds are an excellent option. These funds primarily invest in large cap mutual funds, which hold stocks of well-established companies with a solid track record.
In this blog, we'll explore blue chip mutual funds, their benefits, and the top large cap mutual funds you can consider investing in.
What Are Bluechip Funds?
A bluechip fund is a type of mutual fund that invests in large, financially stable companies. These funds typically include stocks from the top 100 companies by market capitalization. Investing in these companies ensures consistent returns and low volatility compared to mid and small-cap funds.
How Do Bluechip Funds Work?
These funds allocate a major portion of their assets to large cap mutual funds.
They offer long-term financial stability and are ideal for investors who prefer low-risk investments.
Many top blue chip mutual funds also provide dividend income, making them attractive to conservative investors.
Key Features of Bluechip Funds
1. Investment in Market Leaders
Best blue chip mutual funds invest in well-established businesses that have a proven history of profitability. These companies are industry leaders and hold a significant share in their respective markets.
2. Consistent Returns with Low Volatility
Unlike mid and small-cap funds, blue chip mutual funds offer steady growth over time. Even during market downturns, these funds remain relatively stable.
3. Dividend Income
Many top blue chip mutual funds invest in dividend-paying stocks, allowing investors to earn passive income in addition to capital appreciation.
4. Diversification and Risk Management
A bluechip fund diversified across various sectors, reducing the risk of investing in a single industry. This diversification minimizes losses if a specific sector underperforms.
Why Invest in Bluechip Funds?
Investing in large cap equity funds provides several advantages:
Long-Term Wealth Creation – Bluechip funds help in steady wealth accumulation over time.
Lower Risk – Large cap mutual funds are less volatile than mid and small-cap funds.
Reliable Returns – These funds have a history of consistent performance.
Protection Against Inflation – Top large cap funds often deliver returns that outpace inflation.
Bluechip Funds vs. Other Mutual Funds
Feature | Bluechip Funds | Mid-Cap Funds | Small-Cap Funds |
Risk Level | Low to Moderate | Moderate to High | High |
Return Potential | Moderate | High | Very High |
Investment Horizon | Long-term | Long-term | Long-term |
Volatility | Low | Moderate | High |
Suitable for? | Conservative Investors | Growth-Oriented Investors | Aggressive Investors |
Top 10 Bluechip Mutual Funds in India (2025)
Here are the top performing large cap mutual funds you can consider:
Nippon India Large Cap Fund
Performance: This fund has delivered annualized returns of 18.35% over the past three years and 18.84% over the last five years.
Investment Strategy: Focuses on investing in top large-cap companies across various industries, aiming for consistent returns.
ICICI Prudential Bluechip Fund
Performance: The fund has provided annualized returns of 15.62% over the past three years and 18.43% over the last five years.
Investment Strategy: Invests predominantly in large-cap stocks, balancing growth and stability.
HDFC Top 100 Fund
Performance: This fund has achieved annualized returns of 17.9% over the past three years and 17.61% over the last five years.
Investment Strategy: Focuses on large-cap companies with a proven track record, aiming for long-term capital appreciation.
SBI Bluechip Fund
Performance: 1-year return of 8.41%; average annual return of 15.07% since inception.
Investment Strategy: Focuses on large-cap stocks with strong fundamentals, typically holding 50-60 stocks.
Axis Bluechip Fund
Performance: Consistently outperforms benchmarks despite a higher expense ratio.
Investment Strategy: Invests in quality large-cap companies with sustainable business models.
Mirae Asset Large Cap Fund
Performance: Consistently ranks among top large-cap mutual funds.
Investment Strategy: Diversified portfolio of large-cap stocks across various sectors.
DSP Top 100 Equity Fund
Performance: The fund has delivered annualized returns of 15.93% over the past three years and 14.58% over the last five years.
Investment Strategy: Focuses on the top 100 companies by market capitalization, aiming for long-term capital growth.
Aditya Birla Sun Life Frontline Equity Fund:
Performance: The fund has delivered annualized returns of 14.71% over the past three years and 19.75% over the last five years.
Investment Strategy: Classified under the Equity category of Aditya Birla Sun Life Mutual Funds, the fund focuses on mid-cap companies to generate long-term capital appreciation.
Kotak Bluechip Fund
Performance: Known for strong risk-adjusted returns, delivering an annualized return of 17.66% since inception. Recent 1-year return is 9.40%.
Investment Strategy: Focuses on large-cap companies with robust financials, investing predominantly in equities with minimal exposure to debt.
UTI Mastershare Unit Scheme
Performance: This fund has a long track record of delivering solid returns and is managed by a reputed fund house.
Investment Strategy: Invests primarily in large-cap companies with strong fundamentals.
Before investing in blue chip mutual funds, consider these factors:
Expense Ratio – Choose a fund with a low expense ratio to maximize returns.
Fund Performance – Look at the historical returns of the large cap mutual funds ranking.
Fund Manager’s Expertise – The best blue chip fund is one managed by an experienced professional.
Investment Horizon – Invest in top large cap mutual funds for at least 5-10 years for optimal returns.
How to Invest in Bluechip Funds?
Investing in bluechip mutual funds or large-cap index funds can be done in two main ways:
1. Systematic Investment Plan (SIP)
A SIP allows investors to invest a fixed amount regularly (e.g., monthly or quarterly), making it an excellent choice for disciplined investing.
Best for:
Beginners or those with limited capital
Investors looking for long-term wealth creation
Those who want to minimize market timing risks
Advantages:
Rupee Cost Averaging – Reduces the impact of market volatility by buying more units when prices are low and fewer units when prices are high.
Compounding Benefits – Small investments over time can grow into a significant corpus.
Realistic Tip: A SIP of ₹5,000 per month in a top-performing large-cap fund over 10 years could potentially grow into ₹12-15 lakhs (assuming an average return of 12-14% p.a.).
2. Lump Sum Investment
This involves investing a large amount at once and is suitable for those with surplus capital.
Best for:
Investors with high-risk tolerance
Those who can time market corrections
Investors with a long-term horizon (5+ years)
Advantages:
Better Returns in Bull Markets – A lump sum investment grows faster when markets are rising.
Lower Expense Ratios in Index Funds – Direct lump sum investments in index funds often incur lower fees compared to actively managed funds.
Realistic Tip: If you have ₹5 lakh to invest, instead of investing all at once, consider STP
(Systematic Transfer Plan)—moving funds from a debt fund to an equity fund gradually to reduce timing risks.
3. Steps to Invest in Bluechip Mutual Funds
Select a Fund – Compare large-cap funds based on past performance, expense ratio, and fund manager track record.
Choose SIP or Lump Sum – Based on your financial goals and risk tolerance.
Open an Investment Account – Use online platforms like Zerodha, Groww, or direct AMC websites.
Complete KYC – PAN, Aadhaar, and bank details are required.
Start Investing – Automate SIPs or invest manually in lump sum as per your plan
Are Bluechip Funds Risk-Free?
No investment is completely risk-free, but blue chip mutual funds are considered safer due to their investment in stable, large-cap companies. However, risks include:
Market fluctuations
Economic downturns
Sector-specific risks
Tax Implications of Bluechip Fund Investments
Short-Term Capital Gains (STCG): If redeemed within one year, gains are taxed at 15%.
Long-Term Capital Gains (LTCG): Gains above ₹1 lakh are taxed at 10%.
Tips to Maximize Returns in Bluechip Funds
Choose the best large cap index funds with strong historical returns.
Invest through SIP for long-term benefits.
Diversify across multiple large cap mutual funds.
Conclusion
Investing in bluechip funds is a smart choice for those seeking stability, consistent returns, and lower risk. Whether you're looking for the best large cap fund direct growth or the top blue chip mutual funds, it's important to research and invest wisely.
By choosing from the top 10 blue chip mutual funds in India, you can build a portfolio that stands strong even in market downturns. Always consider your financial goals and consult a professional before investing.
FAQs
1. Which are the best blue chip mutual funds in India?
Some of the top blue chip mutual funds include ICICI Prudential Bluechip Fund, HDFC Large Cap Fund, and Nippon India Large Cap Fund.
2. How do blue chip mutual funds provide returns?
Returns come from capital appreciation and dividends from large-cap stocks.
3. Are bluechip funds better than mid-cap funds?
Bluechip funds offer stability, whereas mid-cap funds provide higher but riskier returns.
4. What is the ideal investment period for bluechip funds?
For optimal returns, invest in top performing large cap mutual funds for at least 5-10 years.
5. Can I invest in large cap mutual funds through SIP?
Yes, SIP is the best way to invest in large cap equity funds, ensuring disciplined investing.
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Author - Abhishek Sonawane
Abhishek Sonawane, an MBA graduate from the prestigious Indian Institute of Management Visakhapatnam (IIMV), brings over ten years of experience in the finance domain. His extensive background includes various roles in financial management and strategy, providing him with a comprehensive understanding of the financial landscape. Abhishek’s expertise and dedication to financial education make him an authoritative voice in personal finance, helping readers make informed financial decisions.
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