The economies around the world were just recovering from the 2-year-long pandemic in 2022 when the recession fear hit. Even the major economies around the globe, such as USA or UK, are either already into a recession or, in the coming next 12 months, the chances of getting into a recession are quite high. Though India has very low chances of facing a recession in the coming 1 or 2 years as per different studies, your investment strategy should be in sync with the global economic scenario as well.
If a recession hits even the major economies, production and consumption will slow down, and that will have a direct effect on your investment as the markets will slow down. So, which funds can you invest in 2022 for stable returns in these volatile markets? If you are wondering about such questions, then here are two blue chip funds you can consider. One is Axis bluechip fund direct growth, and the other one is Mirae asset emerging bluechip fund.
Let’s take a look at both the funds separately.
Table of Contents
Axis Bluechip Fund Direct-Growth
As of the 12th of august, this fund is an equity fund that invests around 87% in equities and especially in the large-cap stocks of domestic companies. There is around 75% of the AUM of this fund in the large-cap stocks, and thus bluechip funds are considered to be large-cap funds usually. The fund also has a small percentage of mid-cap stocks which is around 3.25%. The fund’s top holdings include ICICI Bank Ltd., Bajaj Finance Ltd., Avenue Supermarts Ltd., Infosys Ltd., HDFC Ltd., and others.
The returns offered by the fund since inception are around 15.64% which is higher than the category average. If you look at the 5-year returns, then it is 15.44%, while the category average is 12.58%, which means, again, Axis bluechip fund direct growth has the upper hand.
If you take a look at the risk ratios of the fund, then you will find that this fund has a lower beta than the category average. The fund’s beta is 0.84, while that of the category is 0.86. The standard deviation is also low at 19.63, while the category average is 19.7. Both these indicate that the fund gets less affected during volatile markets.
The expense ratio of the fund is 0.52 if you are opting for the direct plan and the exit load is 1% only if 10% of the investment in the fund is redeemed within 12 months.
This fund is suitable for people who can stay invested in the market for at least 4-5 years as that would help them earn a good and fairly higher return from the investment. The risk factor involved in this fund is also moderate, so for investors who do not want to take very high risks but want to invest in equities, this fund can be a great option for them in this volatile market.
Mirae Asset Emerging Bluechip Fund
The next fund that you can consider is the Mirae asset emerging bluechip. This fund has 98.74% of its AUM in equities and equity-related investment instruments out of which 43.84% is in large-cap stocks, 24.62% in mid-cap stocks, and 8.47% in small-cap stocks. As the name suggests, this fund not only invests in the bluechip companies which are already there but also in the emerging bluechip companies, so the investment in mid-cap and small-cap is quite significant. The top holdings of the fund are ICICI Bank Ltd., HDFC Bank Ltd., Axis Bank Ltd., Infosys Ltd., and others.
As of the 12th of August, the returns of this fund since inception were around 20.65%, while the category average is 16.27%. The 10-year return is way higher than the category average. The 10-year return of the fund is around 23.57%, while that of the category is 15.89%.
While the returns are high, the fund has a bit more risk factors involved compared to the Axis bluechip fund mentioned above. The beta is 0.98 while the SD is 21.36, both higher than the category averages. This suggests the high volatility factor in the fund. However, the fund offers better risk-adjusted returns.
The expense ratio of the fund is around 1.69%, while the exit load for the direct plan is 1% if redeemed within 1 year.
Why are Bluechip Funds Great Investment Options?
During volatile markets, companies that have a strong financial standing, brand value, and large market capitalization do not get affected like mid-cap or small-cap companies. This is why investing in blue chip funds can be a great option during 2022 when the markets are so uncertain.
So, you can choose Mirae asset emerging bluechip fund if you are ready to take a little bit of risk for higher returns, or you can invest in Axis bluechip fund direct growth, which offers fair returns at a moderate risk level.
Originally posted 2022-08-24 01:52:51.
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