T. Rowe Price Blue Chip Growth Fund

Scorecard
4 / 5 Stars
Lipper
5 5 4 5 5
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A+ (Buy)

#7 in Large Growth

U.S. News evaluated 466 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 29.46 percent over the past year, 16.75 percent over the past three years, 23.01 percent over the past five years, and 8.49 percent over the past decade.

Trailing Returns Updated 03.31.2014
Year to date -1.1%
1 Year 29.5%
3 Years (Annualized) 16.8%
5 Years (Annualized) 23.0%
10 Years (Annualized) 8.5%

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Summary

No one was immune from the economic downturn, so even the established companies that make up the portfolio of T. Rowe Price Blue Chip Growth fund were hit hard. The fund's management does what its name suggests, and invests in a wide range of well-known companies.

As of April 22, 2014, the fund has assets totaling $24.35 billion. Its portfolio consists almost entirely of holdings in U.S. large-cap companies.

A glance at the fund's top holdings should give investors a good idea of what types of companies management generally prefers. As of the end of June, Apple, Google, Amazon and American Express are all listed among the fund's largest holdings. The fund has owned Google and Goldman Sachs since their respective IPOs. Manager Larry Puglia says he looks for companies "that are taking market share" with "seasoned management" and "strong financial fundamentals." The fund has returned 29.46 percent over the past year and 16.75 percent over the past three years.

Generally, Puglia holds more than 100 stocks in a wide range of sectors, including undervalued financial companies and the more growth-oriented tech and healthcare stocks, according to Morningstar. Puglia says it's important to note that management looks for high-quality companies but also companies with growth potential. "Sometimes people will make the mistake, in my view, of investing in just companies that are blue chip," Puglia says. "But Google, for example, is a company that we think is a blue-chip company but also very much a growth company." His fairly conservative approach allows for broad diversification, but a great deal of small holdings in a large number of companies can slow the fund's ability to really outperform. The fund has returned 23.01 percent over the past five years and 8.49 percent over the past decade.

Investment Strategy

The fund's prospectus says management normally invests 80 percent of the fund's assets in large- and mid-cap blue-chip growth companies that "have the potential for above-average earnings growth," while sometimes seeking out companies that "will have good prospects for dividend growth."

Role in Portfolio

Morningstar assigns the fund a "core" role in portfolio saying, "With a broadly diversified portfolio of large caps, this fund has all the makings of a core holding. The fund is a fine substitute for an S&P 500 Index fund, but its growth orientation means that it may be too aggressive for more-cautious types."

Management

The fund has returned 29.46 percent over the past year, 16.75 percent over the past three years, 23.01 percent over the past five years, and 8.49 percent over the past decade.

Fees

T. Rowe Price Blue Chip Growth Fund has an expense ratio of 0.74 percent.

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Risk

Management's fairly conservative approach, in which it tends to select a large number of holdings, each of which makes up only a small part of the portfolio, means that it will lag behind large growth rallies.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 1 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 1 for one year, 2 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.

Money 70 2011-01-21

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “On most fronts, this is a standout on stewardship, benefiting from a top-rate investment culture, low fees, and a spotless regulatory history. With a more-independent board of directors and a bigger investment from its manager, its score would be even better.”

Morningstar 2010-02-17

In the annual Lipper/Barron's Fund Families Survey for 2009, T. Rowe Price Funds ranks second out of 61 fund families surveyed.

2010-02-17

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, “On most fronts, this is a standout on stewardship, benefiting from a top-rate investment culture, low fees, and a spotless regulatory history. With a more-independent board of directors and a bigger investment from its manager, its score would be even better.”

Morningstar 2010-02-17

In the annual Lipper/Barron's Fund Families Survey for 2009, T. Rowe Price Funds ranks second out of 61 fund families surveyed.

2010-02-17