Principal Emerging Bluechip Fund

Principal Emerging Bluechip Fund is an average performing fund. It is being managed by Dhimant Shah. If you have invested in this fund keep a close watch on its performance. 

Where does Principal Emerging Bluechip fund invest your money?

Principal Emerging Bluechip Fund is a small and mid cap fund which means most of your money will be invested in stocks of medium and small sized companies. About 59% of the fund’s money is allocated to stocks of mid size companies, 22% to stocks of small size companies and the remaining to those of large companies. Mid size stocks can give kicker returns as they turn into large stocks but this happens not so frequently.

Suitable for what?
  • Creating wealth
  • Lifestyle needs
Not suitable for what?
  • Child's education
  • Child's marriage
  • Planning for retirement
  • Home Purchase
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. Do not make the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio. Core portfolio is investments that are made for your basic goals. Principal Emerging Bluechip Fund can be part of the core portfolio.

Our recommendation for fresh investment
Not Recommended
Our recommendation for existing investment.
Recommended
How has Principal Emerging Bluechip Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched at Nov 2008, your value of investments would be around Rs 2.73 lakhs. If you had invested Rs 1 lakh three years back it would have become Rs 1.66 lakhs. The performance has been better or similar to other large cap mutual funds. The fund has been giving at around 3% every year for those who stayed invested for last 3 years.

Assume you had invested Rs 10,000 every month in Principal Emerging Bluechip Fund through SIP for the past 3 years today you would have around Rs 5 lakhs.

How Principal Emerging Bluechip Fund will perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follows their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid size companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction.  Be reminded that equities are one of the asset classes that have the potential to beat inflation.  Your aim for core portfolio should be to beat inflation.

When to review the performance?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance twice a year. Too much attention is not good.

What charges apply?

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Principal Emerging Bluechip Fund is 2.52%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to exit?

Withdraw when your goals are close to achievement. Do not remove the money when the markets go up or down. Do not panic. Stick to your goals.

What are the tax implications?

The returns in an equity mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Principal Emerging Bluechip Funddoes not qualify for sec 80C ELSS benefits.

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