Another Fidelity Magellan (FMAGX) Manager Bites the Dust, as Harry Lange is Booted

For those old enough to remember, Fidelity Magellan (FMAGX) - led by legendary manager Peter Lynch - was once the most famous mutual fund around; along with (for a time) being the largest.

By the end of the century the Fidelity Magellan Fund had well over $100 billion in assets under management. For quite some time it was the single largest mutual fund in the world. In April 2000, Vanguard's S&P 500 index fund displaced Magellan as the largest mutual fund in the world. By the time Stansky retired in 2005 the assets under management for Magellan were back down to $52.5 billion.

Magellan is so famous it has its own Wikipedia page.

Peter Lynch took the reins in May 1977 and remained the manager of Magellan for the subsequent thirteen years. Between 1977 and 1990 the fund averaged a 29% annual return. He created the investment process commonly referred to as “Buy What You Know”

Since Lynch's departure in 1990, the fund has run through 4 managers - with little success.  Number 5 has now taken the helm, as Mr. Lange will be moving to 'another position within Fidelity'.  For a fund that once had over $100B, and as recently as 2005 had $52.5B, it is now down well below $20B.  Lesser known Fidelity Contrafund (FCNTX) [Sep 9, 2008: Will Danoff in Kiplinger Magazine]  has been the far better place for investors to hang out the past 20 years.

Via Reuters:

• Fidelity Investments replaced Harry Lange Tuesday as portfolio manager of its famed Magellan Fund after years of underperformance at the one-time flagship.  Lange becomes the latest in a long line of Fidelity managers who failed to repeat the success of Peter Lynch, the star stock picker who became a household name before retiring in 1990.
• Lange stumbled repeatedly at Magellan, betting on victims of the 2008 financial crisis such as American International Group Incand Wachovia, and favoring mobile phone maker Nokia.
• Over the past five years, the fund has lost an average of 2.2 percent annually, trailing 96 percent of peer funds. Lange has been contrite in his notes to investors and acknowledged he made weak picks in technology and consumer stocks, but some analysts have wondered why he was left him in place as long as he was.
• Magellan trailed 85 percent of rival funds over the past five years and shrank in size by 66 percent during Lange's almost six-year tenure .
• In a statement, the closely held Boston fund firm said it named Jeffrey Feingold as portfolio manager of the $17.4 billion fund. Feingold will continue to manage several other Fidelity funds as well, the company said.
• Feingold, 40, manages the $1.04 billion Fidelity Trend Fund, which has beat 84 percent of competing funds over the last year.
• Lange will remain with Fidelity in a position to be determined, Loporchio added.

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