Nov. 3, 2003 — When Jason Weiner took over the $892-million Fidelity Fifty Fund (FFTYX) last April, he inherited a fund filled with mid- and large-cap value stocks and a high cash stake. He promptly shifted the portfolio to large-cap growth. The previous manager, J. Fergus Shiel, had focused on value stocks. Shiel ran the fund for less than a year before leaving Fidelity to operate a hedge fund.
“Weiner has focused primarily on large-cap growth stocks, away from the value orientation that Shiel maintained,” said Don Dion Jr., editor of Fidelity Independent Adviser, a newsletter that tracks Fidelity managers.
Jim Lowell, editor of Fidelity Investor, another publication that monitors the firm, said “Jason Weiner has consistently ranked at or near the top of my proprietary manager ranking system, as did Shiel, but their stock-picking styles are dramatically different.” Lowell also noted that “Jason has winnowed the cash stake down and completely overhauled the portfolio, as reflected in the fund’s 230% turnover rate this year. The fund is now virtually all large-cap growth. Jason has also diversified the fund by moving into health care, energy services and industrials.”
Weiner said, “I favor companies with high quality, sustainable earnings growth, but I also like cheap, down and out companies that are getting better.” The manager added, “As far as market capitalization is concerned, I generally look for larger companies with a market cap of at least $1 billion, and tend to favor companies with a market capitalization of between $5 and $10 billion.”
Between March and September 2003, the fund dramatically changed — Weiner significantly increased its information technology stake (17.9% to 32.9%); eliminated exposure to consumer staples (10.3% to 0%); added to financials (10% to 15.9%); boosted health care (3.1% to 11.7%); and reduced telecom services (13% to 3.6%). He also lowered the cash stake from 7% to 2.4%.
As of September 30, the fund’s top ten holdings were Microsoft Corp. (MSFT), First Data (FDC), Clear Channel Communications (CCU), Seagate Technology (STX), Southwest Airlines (LUV), Johnson & Johnson (JNJ), Bank of New York (BK), American Express (AXP), Tyco Intl (TYC) and Crown Castle Intl (CCI).
These stocks represented 33.8% of the portfolio, which totaled 61 holdings.
Dion feels Shiel’s tenure at Fidelity Fifty wasn’t long enough “to get a good handle” on his investment style. “He kept more of a mid and large-cap value stance in the fund, which benefited him last year,” he said. Under Shiel’s stewardship from June 2002 through April 2003, the fund declined 8.5%, while the S&P 500 dropped 10.4%.