Mahindra Pragati Bluechip Yojana Fund – Should you invest?

Should you invest in Mahindra Pragati Bluechip Yojana FundMahindra Pragati Bluechip Yojana Fund review


Post SEBI re-categorization of mutual fund schemes in May 2018, many smallcap and midcap funds have suffered as fund managers have shifted their focus based on funds investment strategy as per SEBI guidelines. Largecap mutual funds to some extent are able to sustain with small returns as fund manager were focusing on them. Many experts are recommending large cap mutual funds now owing to the recent market trend and fund manager’s strategy to invest in large cap stocks. Mahindra Mutual Fund is launching a new mutual fund Mahindra Pragati Blue Chip Yojana NFO that would invest in large cap stocks. What are the negative factors in this Mahindra Pragati Bluechip Yojana Fund New Fund Offer (NFO)? Should you invest in Mahindra Pragati Bluechip Yojana Fund?

Also Read: Should you opt for Aditya Birla Sun Life Retirement Mutual Fund?

Features of Mahindra Pragati Bluechip Yojana Fund


This is an open-ended mutual fund equity scheme.

This is a largecap mutual fund scheme that invests in large cap stocks in India. These largecap stocks would be from 1st to 100th company in terms of market capitalization.

This scheme would open for subscription on 22nd February, 2019

This scheme would close for subscription on 8th March, 2019.

Since this is an open ended scheme, it would again open for subscription after 5 business days from the date of allotment of Mf units after the NFO period.

This scheme is available in both regular and direct plans.

This plan offers both growth option and dividend option.

This scheme is available for lump sum and SIP investment.

Minimum investment is Rs 1,000 and in multiples of Rs 1 there-off for lump sum investments.

Minimum investment is Rs 500 per month for monthly SIP and for a tenure of 6 months. One can invest for Rs 1,500 SIP per month for 4 months tenure too.

The NAV of the NFO is Rs 10 per unit now during initial subscription.

There is no entry load to invest in this mutual fund scheme.

If one wants to exit before 1 year from the date of investment, there is a 1% exit load.

This scheme is classified as moderately high risk scheme.

Scheme total expense ratio (TER) is estimated up to 2.5% of the total assets on any day.

Who can invest in this mutual fund scheme?


Any of the following can invest in this mutual fund scheme.

1) Resident Individuals

2) Minor through parent or legal guardian

3) HUF through Kartha

4) Sole Proprietorship

5) Companies

Who is the Fund Manager of Mahindra Pragati Bluechip Yojana Fund NFO?


The Fund Manager is Mr. Ajay V Balasubramanian.

What is the benchmark for this scheme?


The benchmark for this scheme is NIFTY50.

What is the investment objective and strategy of this Mahindra Pragati Bluechip Yojana Fund?


The investment objective of the Scheme is to provide long term capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities and derivatives predominantly in large cap companies. However, there can be no assurance that the investment objective of the Scheme will be achieved.

What is the allocation pattern in this mutual fund scheme?


This fund investment pattern is as follows:

1) It invests 80% to 100% in Largecap equity and Equity related Instruments in India. This risk profile in this segment is high.

2) It invests 0% to 20% in other equity stocks. This risk profile in this segment is high.

3) It invests 0% to 20% in debt and money market securities. This risk profile in this segment is low to medium.

4) It invests 0% to 20% in units issued by REITs and InvITs. This risk profile in this segment is medium to high.

Can NRI invest in this MF scheme?


Yes, they can invest in this scheme. They can invest on repatriation or non repatriation basis.

What are the risks or negative factors involved in this fund?


One should consider some of these risk factors / negative factors before investing.

1) This scheme invests in large cap stocks that are high risk. Most of the largecap stocks are part of NIFTY50 /SENSEX, hence any SENSEX market movement which generally fluctuates widely would impact the performance of the fund.

2) Investors should not assume any guaranteed returns from such largecap mutual fund schemes.

3) Since it is a new mutual fund scheme, there is no past performance, hence we would know how the fund would perform in the future.

4) It invests upto 20% in debt instruments where there is interest rate risk.

How is the Performance of Top Largecap Mutual Funds in India?


Currently there are existing largecap mutual fund schemes in India. Let us see how they have been performing in the last 5-10 years.

1) Reliance Largecap Fund: This fund gave 18% annualized returns in the last 10 years, 17% annualized returns in the last 5 years, 16% annualised returns in the last 3 years. However, this fund gave 1% negative returns in the last 1 years owning to down trend in the stock markets. It is one of the best performing funds in largecap funds that gave the highest returns in the last 5-10 years.

2) Axis Blue Fund: This fund gave 15% annualized returns in the last 5 years, 16% annualised returns in the last 3 years. This fund gave 9% returns in the last 1 year even in this down trend in the stock market. It is one of the top performing funds in bluechip segment that gave good returns in the last 3-5 years.

3) SBI Bluechip Fund: This fund gave 17% annualized returns in the last 10 years, 15% annualized returns in the last 5 years, 11% annualised returns in the last 3 years. However, this fund gave 4% negative returns in the last 1 years owning to down trend in the stock markets. It is one of the best performing funds in largecap segment that gave the highest returns in the last 5-10 years.

4) Aditya Birla Sunlife Frontline Fund: This fund gave 18% annualized returns in the last 10 years, 15% annualized returns in the last 5 years, 13% annualised returns in the last 3 years. However, this fund gave 2% negative returns in the last 1 years owning to down trend in the stock markets. It is one of the best performing funds in largecap / diversified funds that gave the superior returns in the last 5-10 years.

5) ICICI Prudential Bluechip Fund: This fund gave 19% annualized returns in the last 10 years, 14% annualized returns in the last 5 years, 15% annualised returns in the last 3 years. However, this fund gave 1% negative returns in the last 1 years owning to down trend in the stock markets. It is one of the best performing funds in largecap / Bluechip funds that gave the good returns in the last 5-10 years.

You may like: Best Bluechip Mutual Funds to invest in India

Should you invest in the Mahindra Pragati Bluechip Yojana Fund?


Large cap funds are most favorable funds recommended by mutual fund experts now. We are not seeing the positive direction for small cap or midcap funds now. Investing in Large cap funds could be the best bet in 2019 owing to this uncertainty in other segments. If you are going to the new fund offer, you have not seen the  past performance, hence you do not know how such fund would perform in coming years in various cycles. Since you are investing in large cap fund, instead of taking a risk, why don’t you invest in some of the good performing large cap mutual fund schemes which are already existing in the market?

Mahindra Pragati Bluechip Yojana Fund NFO details can be downloaded from here.

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Suresh

Mahindra Pragati Bluechip Yojana Mutual Fund – Should you invest

The Author

Suresh KP

Suresh KP i.e. me have written 1,800+ articles on this blog. I love doing analysis on various Best Investment Plans like mutual funds, Stocks, IPO's, NCD Bonds, Insurance products. If you like our blog, you can share some of the good articles on your Facebook or Twitter. This would be the BIGGEST gift which you would be giving to us.

2 Comments

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  1. Best mutual fund with balanced return….??

    1. Hi Ved, We cannot say best fund as it has not proved with performance. This is like largecap fund.

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