Fidelity Blue Chip Growth is a fund that is faithful to its name.

To frame Blue Chip Growth's investable universe in Fidelity's own language, it "normally invests at least 80% of assets in blue chip companies (companies whose stock is included in the S&P 500 or the DJIA)." And for maximum flexibility, the fund may also reach down to companies with market capitalizations of $1 billion if not included in either index. At that level, the fund would be buying small-cap stocks - a license that it does not utilize.

Blue chip stocks sport strong balance sheets. Among other things, this means manageable debt that carries a high credit rating by Wall Street. And because these companies are large, they typically operate their businesses on a global basis. This can provide the competitive advantage of scale, including a dominant franchise, and higher barrier to entry in the markets in which they operate.

Turning to Blue Chip's "growth" mandate, once again, its name accurately portrays its inclination to own stocks whose sales and/or earnings are growing (or are likely to grow) faster than the market. As such, it invests almost half its assets in technology and health care. But because these same stocks must also meet the more demanding investment criteria outlined above, Blue Chip Growth rarely owns Internet stocks as a part of its tech holdings (though it does own Google), or small biotechnology firms amid its health care positions. Instead, Microsoft, Intel and Dell are this fund's notion of blue-chip tech investments, whereas Pfizer and Johnson & Johnson are typical health care positions.

In our examination of the current equity landscape, the significant out-performance of small-cap stocks relative to large-caps has left the former group richly priced, and the latter fairly- or even under-priced. The same can be said of value stocks and its relationship to growth stocks, where growth has been trailing value.

These discrepancies in stock valuations compel us to feel more positive for large-cap funds with a growth bias, and within that group, those funds whose market capitalizations exceed the broad market indexes. To that end, Blue Chip Growth is particularly well-positioned to benefit from any such market rotation.