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A Blue Chip Fund With Bite

Katie Rushkewicz Reichart, CFA

Katie Reichart: Today, we will be talking about Silver-rated T. Rowe Price Blue Chip Growth (TRBCX). Larry Puglia has run the fund since its 1993 inception, making him one of the longest tenured managers in the large-growth category. He looks for well-run companies with attractive earnings and sustainable free cash flow growth.

Despite its sleepy-sounding name, the fund invests in plenty of aggressive growers, counting Google (GOOGL) and Facebook (FB) among its holdings. It also held a 10% stake in biotech companies as of mid-2014 and also held an above-average stake in consumer cyclicals. That positioning has given the fund a more aggressive stance than it has had historically, but it has helped performance especially in growth-led market such as 2009 and 2013.

Longer term, too, the fund has done quite well, gaining over 10% annualized since Puglia's 1993 start--well ahead of the Russell 1000 Growth Index and the average large-growth peer. It is best used as a core part of your portfolio and would be well paired with a value-oriented investment.