how do they align with your current investment strategy?

Australian blue chip shares refer to large or well-established market-leading companies. These are typically older businesses that pay consistent dividends and have a track record of generating profits.

‘Blue chip’ originates from poker, which refers to the highest-valued chip that can be played during a game. For example, investing in large established companies is a ‘blue chip’ that may steadily grow your principal.

Blue chip stocks can be found in practically every industry and are often household names. However, some of the highest-valued options from the S&P/ASX 50:

1. Financial institutions — You can’t ignore the banks, making up roughly 20% of the S&P/ASX 200.
2. Mining — Australia is a major producer of metal, stone and other raw materials, boosting many of its prominent mining companies to blue chip status.
3. Consumer goods — Massive retail chains like Woolworths and Coles Supermarkets have been around for over 100 years and are household names.

The top 10 ASX blue chip shares by value, or market capitalisation include:

1. BHP Group Limited (BHP): $169 billion
2. Rio Tinto Limited (RIO): $176 billion
3. Commonwealth Bank of Australia (CBA): $185 billion
4. Westpac Bank Corporation (WBC): $83 billion
5. ANZ Group Holdings Limited (ANZ): $53 billion
6. National Australia Bank Limited (NAB): $69 billion
7. Insurance Australia Group Limited (IAG): $12 billion
8. Woodside Energy Group Ltd (WDS): $68 billion
9. Telstra Group Limited (TLS): $32 billion
10. Wesfarmers Limited (WES): $55 billion

Who should invest in blue chip stocks?

Blue chip shares may be less volatile investments that provide somewhat more predictable returns due partly to the payment of dividends. Because of their strong history of growth and low potential for risk, they are a strong backbone for your core portfolio.

What do we mean by your core portfolio?

This is the base or core of your portfolio. The stocks that you hold onto and build up over time.

Blue chip stocks may be an ideal investment for:

• Australians starting out investing in the stock market
• Australians with a conservative approach to investing
• Older investors looking to grow and support their nest egg, looking for to generate dividend income.
• Investors who have already retired

Investors with a high-growth strategy may also look for Small Caps

• Australians looking for market-beating returns

Learn more about blue chips with Under the Radar Report

The blue chip shares you choose to invest in should come down to research, inquiry, and valuation. The biggest factor in your return is the price you pay. There is a price for everything, even blue chips!

Building a portfolio that serves your needs should reflect your risk tolerance and support your overall strategy.

If you’re interested in learning more about blue chip stocks and want deeper insights related to their growth, Under the Radar Report publishes a Blue Chip Value report every two weeks. The publication has circulated since 2008 and focuses on one-stop-shop information about the 40 best blue chip stocks on the market.

And with a whopping blue chip portfolio return of 27.6% over a two-year period, it’s advice you can’t afford to miss.