The Fidelity Blue Chip Growth Fund
The Fidelity Blue Chip Growth Fund (FBGRX) invests “at least 80% of assets in blue chip companies (companies whose stock is included in the S&P 500 or the Dow Jones Industrial Average, and companies with market capitalizations of at least $1 billion if not included in either index).” The fund manager also invests in companies believed to have above-average growth potential.
The fund manager makes use of fundamental analysis, which includes factors such as the financial condition and industry position of each issuer and economic and market conditions, while selecting securities for the portfolio.
The fund’s assets were invested across 360 holdings as of March 2016, a fall of 25 from a quarter ago. It was managing assets worth $19.8 billion as of March’s end. As of its February portfolio, the fund’s equity holdings included Visa (V), Salesforce.com (CRM), Gilead Sciences (GILD), MasterCard (MA), and Reynolds American (RAI), comprising a combined 7.4% of its portfolio.
For this analysis, we’ll be considering FBGRX’s holdings as of February 2016, as that is its latest available sectoral breakdown. The fund’s holdings post-February reflect valuation-driven changes to its portfolio, not its actual holdings.
Information technology, consumer discretionary, healthcare, and consumer staples are the core sectors in which the fund invests. The first two sectors form a combined 64% of the fund, with the remaining two forming over one-tenth of the fund’s assets each. The fund manager is not invested in the utilities sector, which was exited in August 2015.
FBGRX considers the Russell 1000 Growth to be its benchmark index. Compared to the Russell 1000, FBGRX is overweight in the information technology, consumer discretionary, and energy sectors, while being sharply underweight in the industrials, financials, materials, and telecommunications services sectors.
Over the course of the last year, FBGRX’s fund manager has stepped up the fund’s exposure to the information technology and consumer discretionary sectors while reducing exposure to the financials, industrials, and materials sectors. The fund has churned its portfolio quite a bit, with all sectors except telecommunications services having seen significant changes in stock-level composition.
What can the fund’s 1Q16 performance be attributed to? Let’s look at that in the next article.