TRBCX [T. Rowe Price Blue Chip Growth Fund]

[Pushkin]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

[LK2012]

I think it's a fabulous fund. Most responses you will get here will be questions about your overall investment goals, asset allocation, risk tolerance, etc. It's hard to get much response with a general question like this. But it's a first-rate fund. Just depends on what you want it to do, and where it fits into, well, all of the above.

[Pushkin]

Thanks. I’ve only been at this for about 2 years. I am 44, so I’m ok with being fairly aggressive. Hence the 90/10. It has had some good returns, so I thought it might compliment VTSAX well.

[dbr]

So the obligatory lecture is that investing is not about picking funds but about having a plan that meets your objectives. The last step is picking funds.

That said there are plenty of funds that are perfectly fine funds, possibly including TRBCX. One thing that is not fine about that fund is the 0.69% expense ratio and the relatively modest but not small turnover of 31%, which might add another unreported .3% to the cost. As a generalization people should not be paying expenses like that to own assets. The expense ratio and turnover for VTSAX is 0.04% and 4% respectively. You can also check how tax efficient that fund is if used in a taxable account. It will have the advantage of not issuing much of a dividend. Vanguard also has a large growth stock fund which is also a bit too expensive.

But the real question is why? That fund is a large growth US stock fund and what is your reason to tilt your asset allocation to that asset class? Comparing returns over some time period or another is not allowed as a reason. Don't forget the total stock market already holds a significant allocation to large stocks, growth stocks, and specifically large growth stocks.

" . . . it might compliment VTSAX well." It doesn't compliment VTSAX at all; it overlaps VTSAX. Compliments to VTSAX would be things like currency, bonds, commodities including actual gold, actual real estate (not REIT stocks), timberland, etc. Another choice is international stocks, though the meaning of the word compliment might be stretched in that case.

[Pushkin]

May I ask what turnover is?

[tibbitts]

May I ask what turnover is?

The fund manager buying and selling stocks. The effect is that you will generally pay taxes at a higher rate than for a lower turnover fund.

[tibbitts]

Thanks. I’ve only been at this for about 2 years. I am 44, so I’m ok with being fairly aggressive. Hence the 90/10. It has had some good returns, so I thought it might compliment VTSAX well.

1. Good returns alone shouldn't be a significant factor in determining if you want to own the fund. You have to determine what portion of returns are due to the style of the fund, vs. active management adding value.

2. It definitely won't complement VTSAX, for several reasons including its extremely low international exposure.

[dbr]

May I ask what turnover is?

Right. It is the buying and selling of stocks by the fund. Tibbits points out that this can result in taxable distributions that you don't want in a taxable account. The fund also has to pay brokerage costs for trading. An estimate of the cost of this in stock funds is 1% of assets for every 100% in turnover. This is not reported in the expense ratio but has to be found for a given year in the fund reports. That 1% per 100% could be quite variable so it is just an approximation to be kept in mind. A total stock index fund with turnover of 4% obviously spends close to nothing in costs of this kind.

[snailderby]

Thanks. I’ve only been at this for about 2 years. I am 44, so I’m ok with being fairly aggressive. Hence the 90/10. It has had some good returns, so I thought it might compliment VTSAX well.

1. Good returns alone shouldn't be a significant factor in determining if you want to own the fund. You have to determine what portion of returns are due to the style of the fund, vs. active management adding value.

2. It definitely won't complement VTSAX, for several reasons including its extremely low international exposure.

+1.

One study found that "past outperformance relative to the market leads, on average, to future underperformance, while past underperformance is usually followed by future outperformance." See https://www.semanticscholar.org/paper/T ... d5ab9?p2df.

[aristotelian]

Before I discovered indexing, this was one of my core holdings. TRBCX was very, very good to me. That said, I am fully on board with indexing now. If the tech bubble were to burst, this fund would be hit hard.

If you want a large cap/tech tilt, you might also consider a large cap growth index like SCHG or IUSG. A lot of the same stocks much cheaper.

[RetiredCSProf]

The manager of TRowe Blue Chip Growth has been at the helm for many years. He is 60 years old and plans to retire in two years. Keep this is mind in making your decision. Also, TRBCX is now offered as an active ETF as well.

[hnd]

Its one of my 5 favorite managed funds. These funds and a few etfs and stocks make up 15% of my portfolio. The rest is indexing.

I follow the managers and have enjoyed reading interviews with Puglia and decided i was buying what he was selling.

[Grt2bOutdoors]

It’s a good fund, Larry Puglia has been steering that fund for a long time now, he’s got a good track record and TRowePrice has a good bench of analysts there. My folks have been in it for years, they are happy. A friend of mine had it as an investment choice amongst a field of mediocre funds, advised him to put it there and he’s happy too, even with the market hiccups.

[Vegomatic]

FYI ... There is now an ETF "equivalent" from TRPrice for their Blue Chip Growth Fund, as mentioned by RetiredCSProf , above. Below are links to TRP pages with info on the ETF, symbol: TCHP.

TRowe Price ETFs
https://www.troweprice.com/financial-in ... /etfs.html

TCHP ETF
https://www.troweprice.com/financial-in ... h-etf.html

[000]

I personally would not want to tilt to tech right now.

[JimmyJammy]

On a related note, the T. Rowe Price fund PRGTX (Global Tech) has been on fire this past decade as you can probably imagine.

According to Yahoo finance
PRGTX 10 year return: 22.76%
VTSAX 10 year return: 13.73%

[atdharris]

Don't listen to the haters. It's an excellent fund. It's made me a lot of money over the years

[cegibbs]

If you are wanting to add some active management for a portion of your equities. T. Rowe Price is an excellent choice. In my opinion, TRP is the best active management shop for equities. TRBCX is a very good fund, however, it is not substantially different than the Large Cap Growth Index.

[whereskyle]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

TRBCX does not complement VTSAX well. You would just be doubling down on the already very expensive companies that already dominate VTSAX. Adding it would reduce your diversification and concentrate your risk in the most richly priced stocks. These are the stocks that have the farthest to fall.

I think it makes no sense to add it. Large cap growth is your largest holding already with VTSAX. I see no good reason to double down.

[Pushkin]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

TRBCX does not complement VTSAX well. You would just be doubling down on the already very expensive companies that already dominate VTSAX. Adding it would reduce your diversification and concentrate your risk in the most richly priced stocks. These are the stocks that have the farthest to fall.

I think it makes no sense to add it. Large cap growth is your largest holding already with VTSAX. I see no good reason to double down.

Thank you all very much. I have so much to learn. I just want to make sure I am maximizing my earnings on my investments so I can retire at a decent age. I’m in my mid 40s with less than $30K invested. I’m putting in about $7-$7500 a year. Not sure what I’ll end up with in the end, but a lot less had I known about this crap when I was in my 20s.

[whereskyle]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

TRBCX does not complement VTSAX well. You would just be doubling down on the already very expensive companies that already dominate VTSAX. Adding it would reduce your diversification and concentrate your risk in the most richly priced stocks. These are the stocks that have the farthest to fall.

I think it makes no sense to add it. Large cap growth is your largest holding already with VTSAX. I see no good reason to double down.

Thank you all very much. I have so much to learn. I just want to make sure I am maximizing my earnings on my investments so I can retire at a decent age. I’m in my mid 40s with less than $30K invested. I’m putting in about $7-$7500 a year. Not sure what I’ll end up with in the end, but a lot less had I known about this crap when I was in my 20s.

Figure out a way to increase your contributions. Unfortunately, we don't know which stocks will maximize returns in advance. An all blue-chip-growth portfolio has outperformed for the past 10 years, but that outperformance just makes it more likely that it will underperform soon. Stick to the market, safely assume a 7 or 8% annual nominal return, and decide how much you'll need to contribute to reach a suitable number by a certain age. I don't know your expenses, but it seems to me that you should be contributing at least $1000 a month.

[dbr]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

TRBCX does not complement VTSAX well. You would just be doubling down on the already very expensive companies that already dominate VTSAX. Adding it would reduce your diversification and concentrate your risk in the most richly priced stocks. These are the stocks that have the farthest to fall.

I think it makes no sense to add it. Large cap growth is your largest holding already with VTSAX. I see no good reason to double down.

Thank you all very much. I have so much to learn. I just want to make sure I am maximizing my earnings on my investments so I can retire at a decent age. I’m in my mid 40s with less than $30K invested. I’m putting in about $7-$7500 a year. Not sure what I’ll end up with in the end, but a lot less had I known about this crap when I was in my 20s.

The most certain way to retire sooner is to settler for a lower level of spending in retirement. A lot can depend on where and how you want to live in retirement. The next after that would be to spend less and save more now.

It might be marginally helpful to be 100% stocks rather than 90% stocks, but that invites a larger chance of a bad outcome being worse. Other ways to increase expected return such as tilting to small cap value or adding emerging market stocks have the same problem. Possible benefits can easily not appear or go in reverse. At some point there should be a shift to less in stocks as the ability to deal with a downturn lessens.

[Pushkin]

90/10 VTSAX/BND. I’m thinking about adding TRBCX. It looks like a quality fund. What are everyone’s here thoughts on this fund?

TRBCX does not complement VTSAX well. You would just be doubling down on the already very expensive companies that already dominate VTSAX. Adding it would reduce your diversification and concentrate your risk in the most richly priced stocks. These are the stocks that have the farthest to fall.

I think it makes no sense to add it. Large cap growth is your largest holding already with VTSAX. I see no good reason to double down.

Thank you all very much. I have so much to learn. I just want to make sure I am maximizing my earnings on my investments so I can retire at a decent age. I’m in my mid 40s with less than $30K invested. I’m putting in about $7-$7500 a year. Not sure what I’ll end up with in the end, but a lot less had I known about this crap when I was in my 20s.

The most certain way to retire sooner is to settler for a lower level of spending in retirement. A lot can depend on where and how you want to live in retirement. The next after that would be to spend less and save more now.

It might be marginally helpful to be 100% stocks rather than 90% stocks, but that invites a larger chance of a bad outcome being worse. Other ways to increase expected return such as tilting to small cap value or adding emerging market stocks have the same problem. Possible benefits can easily not appear or go in reverse. At some point there should be a shift to less in stocks as the ability to deal with a downturn lessens.

I’m pretty sure I’ll be spending a lot of my money in retirement in Vegas. That includes hookers, cocaine, craps, BJ, etc.

I’d contribute more if I earned more. I’m in grad school, so that should change in about a year.