Hi. This is Matt Brundage here at Bridgehouse, and I recently had a chance to speak with Craig Watson, portfolio specialist on the T. Rowe Price U.S. Blue Chip Growth Fund. I asked him about the differences between blue ]-chip investing today compared to 10 or 20 years ago. Here's what Craig had to say. Yeah. Sure. You know, first, I think and foremost, I think there's always been a a little misperception that only certain types of companies are considered blue-chip quality.
When we think about blue chip investing, we're looking for high-quality companies with sustainable competitive advantages that can deliver durable and sustainable earnings and free cash flow growth, which will allow them to not only grow faster than the market but over a longer duration of time, which allows us to compound growth and compound wealth for our clients.
If you think about those characteristics, they're found in well-established companies but also some of the innovative and disruptive companies or the emerging growth companies as well. When this strategy was launched back in the U.S. back in 1993, many of those qualities were found in companies like the old Philip Morris, Altria Group, Procter and Gamble, AT&T, IBM, which were all, some of the largest companies within the S&P 500 and were held in the Blue Chip Growth Fund back then.
Today, I would say that those same qualities and characteristics are found in companies like Amazon, like Meta, or Visa, just to name a few, and all of which are in the top ten in our portfolio today. So as the as the global economy has transitioned from being more industrial to, say, more digital, we tend to find many of our best ideas in areas like IT, communication services, consumer discretionary, which were a smaller percentage of the portfolio back in 1993.
So in summary, I would say that, we haven't changed our approach to the bottom up fundamental analysis in identifying those types of companies. It's just that, in today's environment, those companies are coming from different aspects of the market versus where they were back in 1993 when we launched the strategy.