FIDELITY BLUE CHIP GROWTH
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FIDELITY BLUE CHIP GROWTH Presentation to The Investment Committee Of The ...... Company Defined Benefit Plan March 1998
description
FIDELITY BLUE CHIP GROWTH. Presentation to The Investment Committee Of The ...... Company Defined Benefit Plan March 1998. FIDELITY Blue Chip Growth. Fund Facts Diversified fund organized as a Massachusetts business trust on October 2, 1984. - PowerPoint PPT Presentation
Transcript of FIDELITY BLUE CHIP GROWTH
FIDELITY BLUE CHIP GROWTH
Presentation to TheInvestment Committee
Of The...... Company
Defined Benefit PlanMarch 1998
FIDELITY Blue Chip Growth
Fund FactsDiversified fund organized as a Massachusetts
business trust on October 2, 1984.As of July 31, 1997, $12.8 Billions in assets.Focuses on well known established (blue chip)
companies.Low Investment costs: Total fund operating
expenses 0.80%.Morningstar rating *****
FIDELITY Blue Chip Growth
Investment Objective Primary - Long-Term Capital Growth
Who Runs the Funds? The fund is managed by FMR, which chooses
the fund’s investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.) in London, England and FMR Far East in Tokyo, Japan assist FMR with foreign investments.
FIDELITY Blue Chip Growth
Investment Strategy Invests mainly in common stocks of well known
and established companies. Strong growth prospects and reasonable
valuations. Use various investment techniques to hedge a
portion of the fund’s risks. Seeks companies that it expects will
demonstrate greater long-term earnings growth than the average company included in S&P 500.
FIDELITY Blue Chip Growth
Investment Strategy (Cont’d) High turnover rates: 51%, 206%, and 182%
during 1997, 1996,and 1995 respectively. Average turnover is 139%.
FIDELITY Blue Chip Growth
Portfolio Strategy Seek growth of capital over the long term by
investing in a diversified portfolio of common stocks.
65% of the funds total assets in Blue chip companies.
Blue chip company is defined as a firm with at least $200m capitalization if the stock is included in the S&P 500 or the Dow Jones Industrial Average; $1 billion if not included in either index.
FIDELITY Blue Chip Growth
Fund, Market, and Risk Characteristics Geographical Emphasis: Predominantly U.S. and
Canada. Portfolio Manager: John McDowell, MBA, CFA
since March 1996.Senior Vice president with Fidelity Management Trust Co.Employed since 1985Other Assets managed: Fidelity Large Cap Stock from June 1995 - April 1996
FIDELITY Blue Chip Growth
Risk Characteristics Risk associated with individual companies,
general markets and overall economy. For foreign securities additional risk factors such
as Political and Economic Risks, Legal and Regulatory Issues, and exposure to currency fluctuations
FIDELITY Blue Chip Growth
How is Risk Managed? By diversification. The Fund reserves the right to invest without
limitation in Preferred Stocks and investment grade debt instruments for temporary defensive purposes.
Debt securities are Baa rated or better.
FIDELITY Blue Chip Growth
How is Risk Managed? (Cont’d) The fund may borrow only for temporary or
emergency purposes, but not in the amount exceeding 33.33% of total assets.
Loans in aggregate may not exceed 33.33% of total assets.
Risk- Reward Potential Moderate
FIDELITY Blue Chip Growth
Investment Policies and Practices Investors are encouraged to take a long term
view of their portfolios. FMR selects companies that demonstrate the
potential to become blue chip companies in the future.
Importance of earnings growth is stressed.
FIDELITY Blue Chip Growth
Investment Policies and Practices3 step selection process for companies with earnings growth
potential* Focus on a universe of 500-600 blue chip growth
stock.* Meet with company management to determine which
companies offer the best future earnings growth.* Strike a good balance between rapid earnings growth
and reasonable valuation.
FIDELITY Blue Chip Growth
Organization and Management of the Fund The Corporation is governed by a Board of Trustees.
Board of trustees review the fund’s performance, expenses and other business affairs.
Fund is managed by FMR which chooses fund’s investment and handles its business affairs.
John McDowell is Vice President and Manager of Blue Chip Growth, which he has managed since March 1996.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity funds and services.
FIDELITY Blue Chip Growth
Regional Exposure (% of Assets)
As of December 31, 1997
92.8
3
US & CanadaEurope
FIDELITY Blue Chip Growth
Top 5 Country Exposure (As of 07-31-97)
Top 5 Countries %AssetsUSA 92.8United Kingdom 1.5Netherlands 0.6France 0.5Switzerland 0.3
FIDELITY Blue Chip Growth
Transaction and Fund ExpensesIndividual Fund Fee
Shareholder Transaction ExpensesSales charge “load” on purchase 3.00% **Sales charge “load” on reinvest. Distribution NoneRedemption fee NoneExchange fee None
FIDELITY Blue Chip Growth
Transaction and Fund Expenses
Annual Fund Expenses Percent of Fiscal 1996 average net assets
Management fee 0.51%Marketing fee (12b-1) NoneOther (shareholder servicing,custodial, auditing, etc..) 0.29%Total fund expenses 0.80%
** Waived for certain Fidelity retirement plan accounts marketed and distributed directly by fidelity.
FIDELITY Blue Chip Growth
Performance(in %) Calender
Year Fidelity +/- S&P 500 +/-Will LargeBlend1993 24.50 14.44 14.761994 9.85 8.53 12.201995 28.38 -9.15 -9.281996 15.38 -7.57 -6.17 1997 27.02 -6.33 -6.28 1 Year 23.21%5 Year 20.0710 Year 19.87
Sector Weightings (As of 07-31-97) % of stocks Relative
S&P 500
Utilities 0.0 0.0Energy 5.0 0.61Financial 3.3 0.79Industrial Cyclicals 15.9 1.11Consumer Durables 1.9 0.56Consumer Staples 10.1 0.95Services 10.8 0.78Retail 7.8 1.39Health 16.1 1.36Technology 19.2 1.51
FIDELITY Blue Chip Growth
1919
FIDELITY Blue Chip Growth
Investment Changes(as of July 31,1997)% of fund % of fund investmentsinvestments in these stocks
6 months agoGeneral Electric Company 3.0 2.8Philip Morris Companies Inc 2.3 2.4Intel Corp 2.2 1.9Microsoft Corp 2.1 0.6Merck & Co Inc 1.7 2.0Procter & Gamble Co 1.6 1.3Americanhome Products Corp 1.5 1.0Intern’l Business Machines Corp. 1.4 2.2Bristol-Myers Squibb Co. 1.4 1.4Wal- Mart Stores Inc 1.4 0.6
FIDELITY Blue Chip Growth
Investment Changes(as of July 31,1997)% of fund % of fund investmentsinvestments in these market sectors
6 months agoTechnology 21.4 18.9
Health 15.1 14.4
Finance 12.8 11.8
Nondurables 10.0 10.1
Retail & Wholesale 7.1 6.1
FIDELITY Blue Chip Growth
Portfolio Relative
Statistics Average IndexP/E Ratio 28.5 1.05P/CF Ratio 19.8 1.11P/B Ratio 6.6 1.08 3 yr. Earningsgrowth 21% 1.02Modern Portfolio Theory Statistics
Alpha Beta R-Square3 yr. -3.7 0.98 85 5 yr. 1.9 0.93 7210 yr. 2.0 1.05 83
Sharpe Index Year Mean Std. Dev Sharpe 3 yr. 25.27 14.81 1.53 5 yr. 21.20 13.84 -- 10 yr. 20.38 16.60 --
Morningstar MeasuresYear Risk Return Risk Adj Ret 3 yr. 0.97 1.10 3* 5 yr. 0.90 1.62 5* 10 yr. 0.96 1.85 5*
