Should You Sell These 4 Funds That Sank on Tariff Fears?

Tariffs shot fear through global markets on April 2, 2025, when President Donald Trump announced a raft of new levies, even on some of the US’ largest trading partners.

Those changes are on pause and face legal challenges, and the markets have bounced back. But investors in some large-growth funds who felt the pain of a sudden 20% loss might be wondering if they should sell in case there’s another selloff when the pause supposedly expires on July 8. The answer is, probably not.

The only thing more unpredictable than short-term market moves is President Trump’s trade policy. If the long-term fundamentals of your large-growth fund remain intact, you should stick with your original plan. These large-growth strategies are worth hanging on to.

Fidelity Blue Chip Growth FBGRX and Fidelity Growth Company FDGRX suffered drawdowns of 12.5% and 11.9%, respectively, in 2025 through April, greater than the declines of 8.4% for the Russell 1000 Growth and 7.0% for the typical large-growth Morningstar Category peer. At one point, both funds were down more than 20%. This was to be expected under respective managers Sonu Kalra and Steve Wymer because when the market punishes stocks with high valuations, these strategies feel it more than most. Nvidia NVDA and Apple AAPL, which together accounted for more than 20% of assets in both portfolios, each plunged about 30% before recovering. Consumer cyclicals also backfired. For many of the portfolios’ holdings, a reliance on Asia imports left them exposed to the tariffs announced on April 2.

But these funds, which have Morningstar Medalist Ratings of Silver, had mostly recovered from the tariff drawdown as of June 15, and they have delivered for investors in the past, partly because of their aggressive positions in stocks like Nvidia and others benefiting from the artificial intelligence buildout. Fidelity Blue Chip Growth’s annualized five-year gain of 18.5% through April topped the category median of 14.2% and the index’s return of 17.1%. Fidelity Growth Company’s annualized five-year return of 18.9% was even better.

Kalra’s portfolio of over 200 stocks spreads the burden of about $120 billion in assets, and, despite its name, Fidelity Blue Chip Growth tends to own companies with paltry current earnings, relatively high price multiples, and rapid growth expectations. Fidelity Growth Company’s Wymer invests more than $190 billion by limiting portfolio turnover and diversifying. These approaches require patience during drawdowns and value-led environments, but prudent position sizing and broad diversification make the funds keepers for long-term investors. Over the past five- and 10-year periods through June 15, both have delivered annualized gains of around 17.0% to 18.5%, outpacing both the Russell 1000 Growth Index and typical large-growth peer’s gains of between 13.6% and 18.0%.

It’s a similar story for Bronze-rated PGIM Jennison Focused Growth SPFAX, which also trailed both bogies earlier this year before rallying. It shares a process with the firm’s flagship 60-stock strategy—PGIM Jennison Growth PJFAX—but with half the holdings, targeting market-leading firms with high growth expectations supported by durable competitive advantages. Like the Fidelity strategies, this fund leans heavily on technology and consumer cyclical stocks, owning many volatile fast growers with lofty valuations. The team must distinguish between company-specific temporary headwinds and long-term structural woes, but Jennison’s analysts are known for finding big secular winners. This strategy’s record under lead manager Natasha Kuhlkin has topped most category rivals, although it hasn’t kept pace with the torrid growth of the benchmark. Still, it should outperform over the long term.

An easier-to-stomach pick during trying times might be Bronze-rated JPMorgan Large Cap Growth OLGAX, which has outperformed both bogies through the tariff drawdowns and over the past decade. Increased conviction in this process, which blends momentum with deep fundamental research, earned a pillar rating upgrade to Above Average from Average in December 2024. Giri Devulapally and his team have been able to find some of the market’s biggest winners early, while momentum-driven trading has helped them ride these winners to great heights. While no strategy will outperform in every environment, this one should give investors both long-term outperformance and a smoother ride.

This article first appeared in the May 2025 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.