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Perpetual knowledge bank series: Blue Chip

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Blue Chip stocks refer to stocks from companies considered to be a high quality and a relatively low-risk investment. The term usually applies to large, well-established companies that have performed well over a long period, have a good reputation and a track record of paying stable or rising dividends.

The term ‘Blue Chip’ is taken from poker, where the blue chips are the most valuable, but is now synonymous with leading companies considered to be leading names in their industry whose products or services usually dominate their respective sectors. This size and stability mean Blue Chip stocks are usually considered less volatile and safe havens for more conservative equities investors. However, like everything in investing, there is risk versus reward component and these stocks may not be the best fit for high-growth investors.

While there is no official list of Blue Chip stocks in Australia, investors will get a good idea of the names involved by noting the S&P/ASX 50 index, a list of Australia's top 50 companies by market capitalisation. These companies are spread across a range of market sectors, including Banking and Financial Services, Resources and the Retail sector.

This analysis has been prepared by Perpetual Investment Management Limited (PIML) ABN 18 000 866 535, AFSL 234426. It is general information only and is not intended to provide you with financial advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.

The information is believed to be accurate at the time of compilation and is provided in good faith. This document may contain information contributed by third parties. PIML and PSL do not warrant the accuracy or completeness of any information contributed by a third party. Any views expressed in this document are opinions of the author at the time of writing and do not constitute a recommendation to act. 

The product disclosure statement(PDS) for the Perpetual Diversified Income Fund issued by PIML, should be considered before deciding whether to acquire or hold units in the fund. The PDS and Target Market Determination can be obtained by calling 1800 022 033 or visiting our website http://www.perpetual.com.au

No company in the Perpetual Group (Perpetual Limited ABN 86 000 431 827 and its subsidiaries) guarantees the performance of any fund or the return of an investor’s capital. Past performance is not indicative of future performance.