This blue chip fund has beaten its category for the past five years.
Fidelity Blue Chip Growth (FBGRX)
from Moneyletter
Current manager Sonu Kalra took the helm of Fidelity Blue Chip Growth (FBGRX) in July 2009, and has generated a solid record since. The fund generally has placed well within the top quarter of the category in each calendar year. For the trailing five years through April 2, the fund had an average annual return of 16.8% compared to 14.3% for the S&P 500, putting it in the top 5% of its peer group.
Recently, many large growth funds have struggled to best the overall market, but Kalra has accomplished that through good sector positioning and stock picking. He and his team look for companies with expected above-average earnings growth potential and sustainable business models, which are also mispriced by the market. He targets at least 10% long-term earnings growth, improving return on equity and invested capital, increasing market share, and strong management teams. He also looks for events that might prove a business catalyst, such as product cycles, management change, and turnaround situations.
The portfolio has a large number of holdings—nearly 375—but also has a healthy 27% of assets in its top ten holdings. The fund’s largest sector overweightings—and largest outright sector positions—are in information technology and consumer discretionary (34.0% and 23.7% of assets, respectively). Health care, consumer staples, and industrials round out the top five sectors. Apple is by far the largest holding at 6.9% of assets.
He recently noted that the team has been “closely following the emergence of a growing middle class in emerging markets,” identifying companies with global brands. Investments here include Starbucks, Walt Disney, and luxury names such as Michael Kors and Ralph Lauren.
Walter Frank, Moneyletter, www.moneyletter.com, 800-890-9670, April 2015