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

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There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Blue Chip Growth Fund (TRBCX - Free Report) . TRBCX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

TRBCX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.

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 $57.36 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. This fund has delivered a 5-year annualized total return of 23.02%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 21.48%, 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. The standard deviation of TRBCX over the past three years is 19.31% compared to the category average of 16.15%. The standard deviation of the fund over the past 5 years is 16.23% compared to the category average of 13.39%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.99, the fund is likely to be as volatile as the market average. 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 5.13, 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.

Currently, this mutual fund is holding 79.82% stock in stocks, with an average market capitalization of $405.61 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
  3. Finance
Turnover is 28.5%, which means this fund makes fewer trades than the average comparable fund.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, TRBCX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 1.03%. Looking at the fund 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 high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about TRBCX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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