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Which 'Blue-Chip' Fund Deals a Better Hand?

Thu, 7 Jul 2016

Morningstar's Katie Reichart compares the Blue Chip Growth funds offered by T. Rowe Price and Fidelity.


Video Transcript

Katie Reichart: Bronze-rated Fidelity Blue Chip Growth and Silver-rated T. Rowe Price Blue Chip Growth have similar objectives but some differences.

The T. Rowe fund has an edge in management. Larry Puglia has run it since 1993, making him one of the longest-tenured managers in the large-growth category. Sonu Kalra has run the Fidelity fund since 2009, but had a good record at Fidelity OTC before that. Both funds favor technology and consumer discretionary stocks and count Amazon, Facebook, and Alphabet among top holdings.

The T. Rowe fund has more healthcare exposure and currently looks growthier than the Fidelity fund, which has more consumer staples and energy exposure. Despite their blue-chip growth monikers, both funds own some aggressive names and have posted greater declines in market pullbacks than the Russell 1000 Growth Index since 2009. Both have produced benchmark-beating results under their current managers. However, the T. Rowe fund has done a little better in market pullbacks, has a more experienced manager, and is a little cheaper than the Fidelity fund.

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