It's not too late for Fidelity's Magellan Fund

Posted by: Aaron Pressman on January 14, 2008

It’s been just over two years since Fidelity put veteran fund manager Harry Lange in charge of its most famous offering, the Magellan Fund (Symbol: FMAGX). As we wrote at the time, Lange was the perfect pick to navigate Magellan thanks to his long and successful experience running a similar fund. And it’s turned out quite well. Since Lange took over, Magellan has returned almost 36% versus 28% for the S&P 500. Now comes some even better news — Fidelity is re-opening Magellan to new investors for the first time in over 10 years.

Lange noted on a conference call with reporters that he’s been a bit hamperted by continued outflows from fund shareholders moving money elsewhere. Despite the fund’s 36% gain since he took over, the fund’s total assets have actually dropped by about $7 billion to $45 billion. Mutual fund shareholders have an awful reputation for timing their investments, rushing from fund to fun always chasing last year’s top returns. Looks like in Lange’s case, they’ve done it again. Now that the fund is open to all again, don’t follow the herd.

p.s. Also kudos to long-time Fidelity watcher Jim Lowell, editor of the newsletter Fidelity Investor. Back when Lange took over Magellan, he dropped his “sell” rating on the fund and urged readers to buy in if they could.

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Bloomberg Businessweek’s Ben Steverman focuses on the latest moves in financial markets and emerging trends in stocks, bonds, and funds, always with an eye toward giving readers a better understanding of the sometimes confusing and often chaotic world of money. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

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