Magellan Reopens...Do You Care?

Posted by: Lauren Young on January 14, 2008

It’s hard to believe an entire decade has passed since Fidelity Investments closed its flagship Magellan Fund to new investors. But times, they are ‘a changing. Fido will reopen Magellan to new investors on Jan. 15.

The news that Fidelity is reopening is no big surprise. In fact, Fidelity watcher Jim Lowell has been predicting this for quite some time.

I’ve watched Magellan prosper and flounder under several managers (Vinik, Stansky, Lynch). At $44.5 billion, assets in the portfolio are dramatically smaller (roughly more than 30%) since the fund closed. The trimmer size is actually a benefit to its most recent leader, Harry Lange, who has done a stellar job since he took helm in October 2005—the fund was up almost 19% in 2007.

My pal Morris Armstrong, who is a financial adviser, thinks that Fidelity must see 2008 as the year of large-cap stocks. Yet while 2007 “was very good, 2006 was disappointing,” Armstrong says. “I tend to move clients out of Magellan, and I don’t think that I have seen anything that will change my mind.”

Thus, it begs the question: Would you invest in Magellan?

Reader Comments

Steve Maxwell

January 19, 2008 2:15 PM

For a few good reasons I would provided that the fund be turned back over to Robert Stansky who unknowingly was victimized by corporate malfeasants and other crooks in some of the companies he had invested in thus inhibiting his terms fund performance and the previous bear market.With this said I though he did a good job managing the fund through the previous bear market.The second reason and I have nothing against Harry Lange and think the world of him as a good stock picker...BUT only in good markets.Even though he had a stallar performance in his Capital Appreciation fund did you see what happened to the Capital Appreciation fund during 2000 or the last bear market and tech bust?.Very good fund manager,but in good markets(only).Third I myself got involuntarily pushed out of Magellan earlier this year due to my employer messing with my investment plan options.If they made this change I could be very interested in finding a way to re-enter Magellan.

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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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