Why Blue Chips Are Ripe for Growth Investing

Investors often turn to blue chip companies in periods of market and economic stress. Valued for their reliability across economic regimes, investors don't have to sacrifice growth when blue chip investing with the Fidelity Blue Chip Growth ETF (FBCG).

Sonu Kalra, portfolio manager of FBCG at Fidelity Investments, discussed the actively managed fund’s strategy, noting he thinks “it’s a really compelling time to invest in growth stocks currently, as we’re on the cusp of an innovation cycle.”

But why look for growth amid blue chips? “Some of the largest companies in the world are … also the most innovative companies,” explained Kalra.

Under the Hood of FBCG’s Strategy

FBCG seeks long-term growth of capital and invests in blue chip companies, with a large-cap bias. The fund’s management team also seeks companies with sustainable business models, above-average earnings growth and revenue, and either improving or elevated return on capital, according to Kalra.

“My investment philosophy focuses on identifying companies that are participating in large, under-penetrated markets where investors are not only mispricing the absolute rate of growth but also the durability of the growth,” he added.