02/17/97 SO MUCH FOR FIDELITY LOYALTY

SO MUCH FOR FIDELITY LOYALTY

ONE FIDELITY WATCHER IS getting off the sidelines. Eric Kobren, editor of the Fidelity Insight newsletter and a former Fidelity Investments marketing executive, says he is starting up three ''funds of funds''--with hardly any invested in Fidelity. Why? He is put off by the financial giant's poor performance, management turnover, and ''investment style drift.'' Its flagship, Magellan, was one of 1996's worst-performing growth funds (560 out of 624).
His Kobren Insight Funds will invest in a score of mutual funds, but stay clear of Fidelity except for two of its funds he still likes (Advisor Growth Opportunity and Real Estate). Kobren also has drawn down his Fidelity involvement with the $760 million he manages in private client assets: Three years ago, that was invested 100% with Fidelity. Now, it's only 38%; the rest is in such Fidelity rivals as Vanguard Group and T. Rowe Price. Fidelity won't comment.
Senior Fidelity executives recently went on a nationwide road show, hoping to convince customers that the company's well-chronicled troubles are a media myth. However, the unusual effort had zero impact on Kobren. He laments that Fidelity fields tight-lipped fund managers who won't explain the drop-off or their comeback strategies.
By Geoffrey Smith
EDITED BY LARRY LIGHT