The T. Rowe Price Blue Chip Growth Fund (TRBCX) “invests in the common stocks of large and medium-sized blue chip companies that have the potential for above-average earnings growth and are well established in their respective industries.”
The fund manager looks for companies that enjoy strong market positions, seasoned management teams, solid financial conditions, and above-average earnings growth and profitability. The prospects of dividend growth are important to the fund, and it may “at times invest significantly in stocks of technology companies.”
The fund’s assets were invested across 141 holdings as of June 2016, and it was managing assets worth $30.7 billion at the end of June. In the June portfolio, its equity holdings included Priceline Group (PCLN), McKesson (MCK), Lowe’s Companies (LOW), Alibaba Group Holding (BABA), and Morgan Stanley (MS).
Information technology, consumer discretionary, and healthcare form the core of TRBCX. These top three sectors comprise a combined 81% of the fund’s assets. No other sector’s weight reads in double digits. The fund is not invested in the energy, utilities, or the telecom services sectors.
We’ve looked at the fund’s quarterly portfolios for the past three years until June 2016. Among the consumer-focused sectors, TRBCX has always preferred discretionary over staples. In fact, consumer staples have not made up over 3.5% of the portfolio during the aforementioned period. The fund was invested in the energy sector until 2015, but it liquidated all stocks from the sector in the first quarter of 2016.
Financials, materials, and industrials have become out of favor in the three-year period while the healthcare and information technology sectors have seen their respective shares rise. Its nearly insignificant exposure to telecom services stocks has been liquidated.
But how has TRBCX performed so far in 2016, and what can this performance be attributed to? Let’s explore these questions in the next part.