Follow the Earnings North Star With This Blue Chip Growth ETF

Rapid technological shifts and shifting interest rate expectations continue to define the current market environment. Amid the uncertainty, investors are looking for a reliable North Star to guide their growth allocations. They can start with the Fidelity Blue Chip Growth ETF (FBCG).

FBCG’s guiding light stems from its focus on consistent, robust earnings growth. The actively managed fund builds off the premise that stock prices will ultimately follow the trajectory of a company’s ability to produce earnings. By using FBCG as their proverbial North Star, investors capture exposure to the most resilient leaders of the digital and physical economy.

AI-Linked Enablers

Under the hood of the fund are companies that can help enable the artificial intelligence (AI) revolution. The fund simply isn’t a play on AI-focused software. It also holds the infrastructure buildout that’s necessary to power this next decade of tech-enabled productivity. This includes exposure to:

• Semiconductors: Exposure to chip companies like NVIDIA and Broadcom are creating the “brains” of AI. As such, FBCG maintains high conviction to these silicon giants that provide the hardware necessary for Large Language Models (LLMs), edge computing, and other AI-focused capabilities.
• Utilities & Infrastructure: Exposure to names like GE Vernova and Entergy Corp reveal exposure to utilities, which are becoming essential AI plays due to the massive energy demands of AI data centers.
• Communication Services: Google and Meta provide investors with exposure to platforms where AI-driven content is primarily consumed. This creates a feedback loop where user data meets monetization, thereby creating a path for robust earnings.

Quality Beyond Tech

FBCG’s blue chip focus means it can also reach other sectors outside of tech for additional diversification. Its strict earnings criteria extends to growth opportunities in healthcare (biotech innovation) as well as financials (the rise of digital payments).

FBCG also benefits from an actively managed approach. The fund’s portfolio managers have the autonomy to hand-pick quality holdings as opposed to a passive fund that relies on a market cap-weighted approach. This active approach is crucial in today’s market where the gap between the stock market’s winners and losers is widening.

Furthermore, the fund’s blue chip focus means the portfolio is strategically constructed using a specific criteria. This includes names that exhibit established brand equity, strong balance sheets, and human capital in the form of superior management. Investors looking to capture growth in this era of AI without sacrificing quality will appreciate FBCG’s disciplined, earnings-first path in the convenience and flexibility of an active ETF wrapper.

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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.

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