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. 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 142 holdings as of September 2016, and it was managing assets worth $33 billion as of the end of September. In the September portfolio, its equity holdings included the Priceline Group (PCLN), McKesson (MCK), Lowe’s Companies (LOW), Alibaba Group Holding (BABA), and Morgan Stanley (MS).
Portfolio changes in TRBCX
Information technology, consumer discretionary, and healthcare form the core of TRBCX. These top three sectors command over one-fifth of the fund’s assets apiece, comprising a combined ~80% of the fund’s assets. No other sector’s weight reads in double digits. The fund is not invested in the energy and telecom services sectors.
We’ve looked at the fund’s quarterly portfolios for the past three years until September 2016. The IT (information technology) sector has seen its portfolio weight rise over the year-to-date period, and at one-third of total assets, IT has its highest exposure so far in the period. Exposure to the healthcare sector is higher than it was three years ago, but this has been reduced during the past three quarters. The fund was invested in the energy sector until 2015, but the management liquidated all stocks from the sector in the first quarter of 2016.
Notably, exposure to industrials has been reduced significantly, while exposure to materials has been made negligible.
But how has TRBCX performed so far in 2016, and what can its performance be attributed to? Let’s explore these questions in the next article.