Every coin has two sides, risk and returns are those which comes with investing in any financial product. The decisions can be personal or suggested by an expert which can be based on age, risk appetite, investment horizon, financial goals, and other vital factors.
Mutual funds are trending, because of sorted risks by fund managers with higher returns than bank savings and term deposits. Fund houses offer different types of schemes, carrying a different investment strategy which are suitable for various needs of individual investors. Blue Chip funds have become “hot pancakes of the Industry”.
Blue-chip mutual funds invest in a few selected large-cap companies with a proven track record and established businesses with some lucrative characteristics attached. The companies in conversation are managed by professionals with sturdy leadership based on business insights. Established business models with market kingpin or one of the top ranked within the industry having verifiable track records. They show profits year on year with uninterrupted dividend payouts. Tend to deliver good returns over the long period, help growing capital to build a huge corpus
The major reasons to support blue-chip funds as an excellent way to achieve long term financial goals such as retirement planning. The dynamism & volatility of stock markets and of course economy needs stable investment returns which are provided by such companies to withstand the market hush without difficulties.
Reasons to include blue-chip funds in investment portfolio
- The blue-chip companies pay regular dividends, which is an excellent way to earn an additional income.
- Being a part of the market leaders, Blue-chip investments are financially strong maintaining a balanced debt-equity ratio further reducing volatility.
- Investments done in diversified businesses enables to earn income through different streams serving a wide demographic which diversifies risks.
- These companies are part of Fortune 500 list, which gives an additional security while investing in a diversified portfolio.
- Investing in the Equities among different sectors reduces risks and enhances the returns from the growing markets.