Blue Chip shares refer to well established, large multinational firms. Blue chip shares primarily refer to companies listed on the FTSE 100 share index. Although it is not exclusive and may include some of the bigger companies who just miss out on the FTSE 100 share index. The prime definition of a Blue Chip company is a large market capitalisation and good long standing reputation.
It is generally thought that blue chip shares offer a more secure investment as large companies are less likely to go bankrupt. At the same time they have less scope for rapid growth like smaller companies in the All share index.
Nevertheless Blue chip shares can nosedive. In recent years, the example of Northern Rock and Bear Sterns in the US, show that even so called ‘blue chip companies’ are not immune from risk