Australia's 20 biggest stocks have been portfolio poison in recent times, but they are now starting to look more attractive, State Street Global Advisors says.
The S&P/ASX20 Index has "underperformed the rest of the market over the year to date, over one year and over three years," State Street equity analyst Olivia Engel said. 
Ms Engel noted that the top 20 stocks made up almost 60 per cent of the market capitalisation of the broader S&P/ASX300 Index.
"With such a heavy concentration in indices, underperformance by these heavyweights is likely to be acutely felt by Australian equity investors - and they have underperformed over the past three years by 2.3 per cent per annum."
Performance was based on a "cumulative total returns" criteria. In 2016, the underperformance has been even more drastic, Ms Engel said.
The top 20 stocks have declined 0.24 per cent compared with a 3.76 per cent rise in the S&P/ASX300 - a 4 per cent underperformance.
"We wonder if investors are giving up entirely on these names," she said.
But there was light on the horizon for the blue chips, said Ms Engel, who added that State Street was "not willing to give up on them entirely and some of the names should still have a place in your portfolio".
Although earnings expectations for the blue chips had fallen, in terms of 12-month forward price-earnings ratios they were now cheaper than the rest of the market.
Consequently, "there are some very attractive names within the top 20," said Ms Engel. Additionally, they had other attractive characteristics. "There is a reason these stocks are so large in terms of capitalisation, and some exhibit good-quality, decent valuations, are stable cash-generative, mature businesses with relatively low volatility. "This doesn't sound too bad when they can be picked up at reasonable valuations."
The top 20 Australian stocks in terms of size, from largest to smallest, are: Commonwealth Bank, Westpac Banking Corporation, ANZ Banking Group, National Australia Bank, Telstra, BHP Billiton, CSL, Wesfarmers, Woolworths, Scentre Group, Macquarie Group, Transurban Group, Woodside Petroleum, Westfield Corporation, Brambles, Rio Tinto, QBE Insurance, AMP, Suncorp and IAG.