Volatility and risk are often the first things that come to mind when many investors think of growth funds. This fund demonstrates that one can achieve growth and limit wild performance swings by focusing on top-quality companies with clear competitive advantages.

Helmed by Larry Puglia since its 1993 inception, T. Rowe Price Blue Chip Growth (TRBCX) is a broadly diversified large-cap growth fund that consistently has generated index-beating returns. Puglia’s focus on the bluest of blue-chip companies has also resulted in low volatility compared to other funds in the category.

Puglia occasionally makes big bets on companies he believes have excellent long-term prospects; Apple (NSDQ: AAPL), Google (NSDQ: GOOG) and Amazon.com (NSDQ: AMZN) each make up about 5 percent of the fund’s assets. Puglia invested in these technology titans because he believes their track record of innovation gives them a competitive advantage and strong growth potential.

Despite holding large positions in a handful of names, he generally builds a portfolio of about 130 names each of which rarely accounts for more than 1 percent of assets.

He focuses almost entirely on US-based companies, though many of these companies have substantial international businesses. All said, about one-third of the revenue generated by portfolio holdings comes from foreign markets.

The fund is overweight telecommunications, media, consumer services and industrial materials relative to both the S&P 500 and its peers. These investments amount to a sizeable bet on a continued economic recovery.

Conversely, T. Rowe Price Blue Chip Growth is underweight on energy, health care and technology names, as it’s been difficult to find names in these sectors that meet management’s criteria.

Puglia seeks large, well-established companies that have pricing power due to their leading position in the industry. He prefers to invest in an industry’s No. 1 or No. 2 player. Investment candidates must also operate in industries with high barriers to entry, which makes it difficult for new competitors to mount a challenge to their dominance. He also focuses on companies that generate sustainable, above average growth in free cash flow and earnings.

He prefers companies that have quality management teams with a proven ability to manage costs and use shareholder resources effectively. Puglia believes that a firm’s return on invested capital, return on net assets and return on equity are emblematic of management’s stewardship of their company.

To identify the fund’s investable universe, Puglia periodically screens about 500 companies with a market capitalization of more than $5 billion on 15 criteria. He then conducts further research on the 200 to 300 top scoring names using T. Rowe Price’s internally generated research and other available information.

Once he’s identified the most attractive stocks, Puglia conducts a valuation analysis to ensure he isn’t overpaying for assets. He compares a company’s price-to-earnings ratio to its earnings growth rate and examines T. Rowe Price’s estimate of discounted cash flows in order to discern a company’s true value. He aims to buy into companies at a price that’s no higher than one times the price-to-earnings to growth ratio, though he will pay up to 1.5 times that if necessary. But he draws the line at two times that ratio.

With its focus on established blue chips, T. Rowe Price Blue Chip Growth isn’t likely to set the world on fire in terms of performance. However, it does consistently outperform the S&P 500 and ranks within the top third of the large growth category. The fund can run into trouble when the broader equity markets tank–as was the case in 2008–but it holds its value better than many of its peers. The fund also doesn’t tend to lag the category in bull markets, a common situation for funds that incorporate a value bent to their investing strategy.

With a low annual expense ratio of 0.81 percent, it’s an excellent cornerstone for almost any portfolio. Additionally, Puglia has invested between $500,000 and $1 million of his own money in the fund, so you can rest assured that his incentives are aligned with your own.