Picking mutual funds can feel confusing at first. There are many categories, every fund house has its own style, and the jargon is heavy. One place many Indian savers start is with a blue chip fund. These funds put most of your money into strong, established companies and aim to grow wealth at a steady pace.
In this guide, we break down the meaning of blue chip fund, how it works, what to look for, and how you can invest. The language is simple and the flow is practical so you can act with confidence.
What are Blue Chip Funds?
A blue-chip fund is an equity mutual fund that invests mainly in shares of large, well-known companies. These companies have long operating histories, strong balance sheets, and are usually leaders in their industries. Think of names you hear often in India: banks, IT majors, consumer brands, energy, and infrastructure giants. A blue-chip fund builds a basket of such stocks and manages it for you.
A quick example helps. Suppose a fund holds a mix of HDFC Bank, Reliance Industries, Infosys, ITC, and Larsen & Toubro, along with a few other large players. Even if one stock faces a dull year, the rest can cushion your portfolio because these firms have diverse revenue streams and seasoned management.
Many definitions from Indian investor resources describe blue chip funds in this simple way: portfolios of high-quality companies that aim for stable performance across market cycles.
In India, “large cap” is a defined term. As per the regulator’s framework followed by the industry body AMFI, large-cap stocks are the top 100 companies by full market capitalisation, and a large-cap fund must invest at least 80% in these stocks. Blue-chip funds usually sit inside this large-cap bucket.
How Does Blue Chip Fund Work?
When you invest in a blue-chip mutual fund, your money is pooled with thousands of other investors. A professional fund manager then buys and sells large-cap stocks on your behalf and keeps the portfolio diversified across sectors like banking, IT, FMCG, automobiles, energy, and healthcare. The process has a few constant parts:
- Universe selection
The research team screens the top 100 listed companies by full market cap. This is your blue chip universe.
- Stock picking
The team studies earnings quality, cash flows, leverage, management track record, and valuation. The goal is to own strong companies at sensible prices.
- Portfolio construction
Positions are spread across 25 to 60 stocks so that no single name dominates the portfolio. Sector weights are controlled to avoid concentration.
- Ongoing review
Holdings are reviewed every quarter. If a company’s fundamentals weaken or valuations run too hot, the fund trims or exits the position.
Because the underlying businesses are mature and cash-rich, market swings tend to be smoother than in mid or small-cap funds. That is why blue-chip funds are often used as the “core” of an equity plan for goals that sit five years or more away.
Features of Blue Chip Funds
- Large-cap focus with at least four-fifths of the portfolio in the top 100 companies, as per mutual fund categorisation.
- Lower volatility than mid and small cap funds, since underlying firms have diversified revenues and stronger balance sheets.
- Quality bias through emphasis on return on equity, cash generation, and management depth.
- Liquidity because large caps trade in high volumes, which helps during rebalancing or redemptions.
- Professional research and risk controls covering sector limits, stock limits, and internal reviews.
- Suitable holding period of at least five years so that short-term market noise does not derail your plan.
- Transparent reporting with monthly fact sheets from fund houses showing holdings, risk, and costs.
For many investors asking what is blue chip funds or what are blue chip mutual funds, these features sum it up well.
Types of Blue Chip Funds
Blue chip exposure comes to you in a few forms. The core idea is the same, but the route differs.
- Actively managed large-cap funds.
The fund manager picks and weights stocks with the aim of beating a large-cap index.
- Index funds and ETFs tracking the Nifty 50 or Sensex
These follow the index and do not try to outperform it. They give pure blue-chip exposure at low cost.
- Large and mid-cap funds with a blue chip tilt
These must keep at least 35% each in large and mid caps. They add a growth kicker from select mid-caps while keeping a large-cap base.
- Focused large-cap funds
These hold a compact basket of 25 to 30 blue chips. Higher conviction, slightly higher risk.
If your first goal is stability with equity growth, pure large-cap or index options usually fit best.
List of Blue Chip Funds
Below are popular blue chip funds in India, along with simple, relevant metrics. Costs and assets change over time, so always check the latest factsheet before investing.
- ICICI Prudential Bluechip Fund
Category: Large cap. AUM about ₹68,033 crore as of 30 Apr 2025. The direct plan expense ratio is around 0.85% on many screens. Benchmark: Nifty 100 TRI.
- SBI Bluechip Fund
Category: Large cap. Assets of about ₹53,030 crore are shown on a factsheet page. The regular plan expense ratio is near 1.49%. Benchmark: S&P BSE 100 TRI.
- Axis Bluechip Fund
Category: Large cap. Assets around ₹33,360 crore and a regular expense ratio of about 1.58% in public factsheets. Benchmark: Nifty 50 TRI.
- Mirae Asset Large Cap Fund
Category: Large cap. Invests at least 80%in large caps with room for select mid caps. Check the AMC factsheet for AUM and costs; the fund house publishes strategy details. Benchmark: Nifty 100 TRI.
- HDFC Top 100 Fund
Category: Large cap. AUM of about ₹38,116 crore on a fund screener, regular expense ratio near 1.59% in the factsheet views. Benchmark: Nifty 100 TRI.
- Kotak Bluechip (Kotak Large Cap) Fund
Category: Large cap. Total assets are shown near ₹10,340 crore and a regular expense ratio of about 1.74 percent on the factsheet pages. Benchmark: Nifty 100 TRI.
- UTI Large Cap Fund (earlier UTI Mastershare)
Category: Large cap. Month-end AUM around ₹12,720 crore; direct plan TER near 0.92 percent. Benchmark: BSE 100 TRI.
- Aditya Birla Sun Life Frontline Equity Fund
Category: Large cap. Expenses and data available in ABSL documents and factsheets. Benchmark: Nifty 50 or Nifty 100 TRI as per scheme literature.
- Nippon India Large Cap Fund
Category: Large cap. Direct plan expense ratio is around 0.69 percent reported on public screeners. AMC and factsheet pages carry the latest portfolio and scheme details. Benchmark: Nifty 100 TRI.
- Canara Robeco Bluechip Equity Fund
Category: Large cap. AUM around ₹16,407 crore as of 31 Jul 2025 on the AMC page; regular plan expense ratio around 1.64 percent shown on public screeners. Benchmark: BSE 100 TRI.
- Tata Large Cap Fund
Category: Large cap. AUM shown around ₹2,615 crore with an expense ratio of 0.99 percent for the direct plan on the scheme page. Benchmark: Nifty 100.
- DSP Top 100 Equity Fund (DSP Large Cap)
Category: Large cap. Historic factsheet shows large-cap focus; current metrics available on DSP’s digital factsheet hub. Benchmark: S&P BSE 100 TRI.
- Franklin India Large Cap Fund (earlier Franklin India Bluechip)
Category: Large cap. Assets near ₹7,770 crore and a regular plan expense ratio of around 1.84 percent on public fact pages. Benchmark: Nifty 100 TRI or BSE 100 TRI as per scheme docs.
- HSBC Large Cap Fund
Category: Large cap. AUM around ₹1,849 crore and a regular plan expense ratio of about 2.14 percent on fund pages. Benchmark: BSE Sensex TRI listed as primary in some fact sheets.
- Motilal Oswal Nifty 50 Index Fund
Category: Index. Tracks Nifty 50; direct plan expense ratio around 0.11 to 0.12 percent with AUM around ₹723 crore reported in July 2025. Benchmark: Nifty 50 TRI.
- HDFC Nifty 50 Index Fund
Category: Index. Total assets around ₹20,590 crore; expense ratio about 0.35 percent on many listings; tracks Nifty 50 TRI.
- Mirae Asset Large Cap Fund – Regular plan
Category: Large cap. See the monthly factsheet for AUM, costs, and top holdings; strategy emphasises quality at a reasonable price. Benchmark: Nifty 100 TRI.
- ICICI Prudential Nifty Next 50 Index Fund
Category: Index. Not strictly a blue-chip basket but often used alongside the Nifty 50. Refer to the AMC pages for expenses and AUM.
Note: The numbers above are illustrations from public fact sheets and articles captured on the dates cited. Always check the latest AMC factsheet before making a decision, since AUM and costs move with markets and regulatory updates.
How to Invest in Blue Chip Funds
A simple, no-stress process works best.
- Define the goal
Write down why you are investing. Retirement, child’s college, house down payment, or building a long-term corpus.
- Pick the route
Choose an active large-cap or a Nifty 50 index fund. If you are starting and prefer low cost and simplicity, an index fund is fine. Active funds may suit you if you want a manager to try to beat the index.
- Complete KYC
PAN, Aadhaar, and a bank account are needed. This is a one-time process with the fund house or a platform.
- Decide on SIP or lump sum.
Many investors in India prefer SIP to average the purchase price and build discipline.
- Select the plan
Direct plan through the AMC website or a registered platform has a lower expense ratio than the regular plan because there is no distributor commission.
- Review once or twice a year.
Track how your fund performs against its benchmark and category. Do not react to daily market moves. Rebalance if one fund grows far bigger than the rest of your portfolio.
- Stay the course
Blue-chip funds reward patience. Give them a five-year runway at the very least.
Benefits and Limitations of Blue Chip Funds
Benefits
- Exposure to strong and widely followed companies with better governance and disclosure.
- Smoother ride than mid and small cap funds, which helps you stay invested.
- Better liquidity, which can matter during redemptions or portfolio rebalancing.
- Clear, low-cost options through Nifty 50 or Sensex index funds.
- Easy to track using familiar benchmarks and monthly fact sheets from AMCs.
Limitations
- During roaring bull phases, blue chips may lag aggressive mid or small-cap funds.
- They are still equities. Prices move every day, and short periods can be volatile.
- Outperformance by active large-cap funds over the index can be modest after fees.
- Returns are market-linked and never guaranteed.
Knowing both sides keeps expectations grounded and helps you pick the right product mix.
Conclusion
Blue-chip funds answer a widespread need in Indian households. We want our money to grow, yet we also want a smoother path and fewer surprises. By owning a basket of the country’s biggest and most stable companies, a blue-chip mutual fund gives you precisely that middle path.
If you were searching for blue-chip fund meaning or asking what are blue chip mutual funds are, think of them as your core equity holding. Build the rest of your plan around this core. Add mid-caps or flexi caps later if your risk appetite allows. Start with a sensible SIP, review once or twice a year, and let time do the heavy lifting.
IIFL Customer Care Number 
IIFL Capital Services Support WhatsApp Number
