Is T. Rowe Price Blue Chip Growth Fund (TRBCX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Mutual Fund Equity Report fund category, a potential starting could be T. Rowe Price Blue Chip Growth Fund (TRBCX). TRBCX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

TRBCX finds itself in the T. Rowe Price family, based out of Baltimore, MD. Since T. Rowe Price Blue Chip Growth Fund made its debut in June of 1993, TRBCX has garnered more than $59.90 billion in assets. Larry J. Puglia is the fund’s current manager and has held that role since June of 1993.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. TRBCX has a 5-year annualized total return of 24.06% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 25.52%, which places it in the middle third during this time-frame.

When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, TRBCX’s standard deviation comes in at 19.04%, compared to the category average of 16.45%. The fund’s standard deviation over the past 5 years is 16.59% compared to the category average of 13.56%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.99, which means it is hypothetically as volatile as the market at large. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a positive alpha of 4.7, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.

As of the last filing date, the mutual fund has 92.94% of its assets in stocks, which have an average market capitalization of $603.33 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Retail Trade

  3. Finance

With turnover at about 46.8%, this fund is making fewer trades than comparable funds.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, TRBCX is a no load fund. It has an expense ratio of 0.69% compared to the category average of 1.02%. From a cost perspective, TRBCX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.

Bottom Line

Overall, T. Rowe Price Blue Chip Growth Fund ( TRBCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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