The fund is diversified, yet concentrated, holding more than 135 names,
while the top 10 holdings make up just under 40% of the assets. From a
sector perspective, more than 70% is invested in just three sectors:
technology, consumer services, and healthcare.
Fund manager Larry Puglia, of sub-advisor T. Rowe Price, looks for dominant
players in their field, with above-average, sustainable growth prospects,
and the ability to deliver and grow free cash flow. The fund invests in
very large companies, most of which have market capitalizations in the
upper quintile of the market. Its average market cap is more than 60%
higher than that of the S&P 500.
Top holdings as of Dec. 31 included
Amazon.com Inc. (NASDAQ: AMZN),
Facebook Inc. (NASDAQ: FB),
Microsoft Corp. (NASDAQ: MSFT),
Alphabet Inc. (NASDAQ: GOOGL), and
Alibaba Group Holding Ltd. ADR (NYSE: BABA).
Performance over the long-term has been excellent with the fund delivering
a 5-year average annual compounded rate of return of 22, placing the fund
in the first quartile of performance.
While the returns have been solid, this is not a fund for those with an
aversion to risk. It has been significantly more volatile than both the
market and peer group over all periods. For example, as of Dec. 31, it
posted a 3-year average standard deviation of 15.58%, for a Fundata 3-year
Volatility Ranking of 10/10.
One concern I have in the near term is its level of valuation. It is
currently trading at levels well above the index. If you have held this
fund for a while, you may want to consider taking some profits and reducing
For those looking for a quality, growth-focused U.S. equity fund, this
would be one to consider. It has a strong management team, uses a
disciplined process, and boasts a strong track record. However, you must be
comfortable with higher-than-average volatility.
TD U.S. Blue Chip Equity Fund
TD Asset Management
Large Cap Growth
Prospectus risk rating:
Paterson risk rating:
Larry Puglia since October 1996
2.45% (Advisor units)
TDB310 (Front End Units)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
Notes and Disclaimer
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Commissions, trailing commissions, management fees and expenses all may be
associated with fund investments. Please read the simplified prospectus
before investing. Mutual funds are not guaranteed and are not covered by
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insurer. There can be no assurances that the fund will be able to maintain
its net asset value per security at a constant amount or that the full
amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.