VIDEO: ETF of the Week: FBCG

On this episode of the “ETF of the Week” podcast, VettaFi’s Head of Research, Todd Rosenbluth, discussed the Fidelity Blue Chip Growth ETF (FBCG) with Chuck Jaffe of Money Life. The pair discussed several topics related to the ETF, in order to give investors a deeper understanding of it.

Chuck Jaffe: One fund, on point for today. The expert to talk about it. Welcome to the ETF of the Week! Yes, this is the ETF of the Week, where we get the latest take from Todd Rosenbluth, Head of Research at VettaFi. And if you go to ETFDb.com , VettaFi’s sister site, you can dig into all the tools you’re going to need to be a savvier, smarter ETF investor, and to get more details on the new, newsworthy, trending, and timely ETFs that we talk about here. Todd Rosenbluth, great to chat with you again!

Todd Rosenbluth: It’s great to be back, Chuck.

Chuck Jaffe: Your ETF of the Week is…

Todd Rosenbluth: The Fidelity Blue Chip Growth ETF, FBCG.

Chuck Jaffe: FBCG, the Fidelity Blue Chip Growth ETF. And it’s important that we make, in this case, the word ETF part of the name because there is the Fidelity Blue Chip Fund that is ticker symbol FBGRX. They are not the same thing. It’s not the same portfolio in a different wrapper. This fund is about six or seven years old at this point. Why this fund as ETF of the Week now?

Todd Rosenbluth: You’re right. So it caught my eye that this fund has gathered — this ETF, FBCG, has gathered a billion dollars of net new money this year. It’s now a $7 billion ETF. You’re right, it’s roughly 6 or 7 years old. What we’ve seen as we made our way through earnings season is that there’s been disparity in the performance of the former Mag Seven, those mega-cap growth stocks. And I think people are leaning into active management that helps them to be able to differentiate between the two.

Chuck Jaffe: But let’s start on this with the definition of blue chip, because it used to be a meaningful term. Like when the Fidelity Blue Chip Growth traditional mutual fund started, you were saying something when you said, “I’m buying blue chip stocks.” And it basically meant, “I’m buying companies that are big American, you know, American dream builders with big balance sheets and the rest.” But that’s not a term that most people use anymore. So one, does this ETF hold what we think it does? Is this some new measure of blue chip in terms of what qualifies?

Todd Rosenbluth: So blue chip, or blue chip growth, has been known as a strategy for Fidelity for years. We talked about there being a mutual fund that has a very long track record that the ETF is used as a base for. So what has been inside it has evolved. But when I look inside the portfolio, I see a lot of mega-cap growth stocks. But what I see is that there are the benefits of active management. I would think many people would agree companies like Apple, Alphabet, and Eli Lilly, those are high-quality growth stocks. But blue chip doesn’t necessarily mean dividend-paying. Meta is in here; it pays a small dividend I think. Nvidia is in here. Amazon is in here; I don’t believe Amazon pays a dividend. So, the devil is in the details. It’s important to look at this. I think of this as an actively managed large-cap growth —and I use the word fund because exchange-traded fund, but this is an active large-cap growth ETF. And it matters who’s running the fund, how long they’ve been running the fund, and how they’re doing with it. And all things combined, Fidelity is doing quite well.

Chuck Jaffe: I’m not sure this question has ever come up, but since we’re talking about how FBCG, Fidelity Blue Chip Growth, the ETF, is the ETF of the Week that is based, but not the same as, their traditional fund. For years, Fidelity resisted opening ETFs. A...