Fidelity Investments has reopened its 45-year-old Fidelity Magellan Fund to new investors, effective January 15. The fund had been closed to new accounts since September 30, 1997. Harry W. Lange is the fund’s portfolio manager.
“Having been closed for more than a decade, Magellan’s shareholder base has matured and, in the normal course of investing, many shareholders have continued to redeem assets as they’ve met their financial goals,” explains Walter C. Donovan, president of the equity division of Fidelity Management & Research Company. “In fact, 85 percent of the fund’s assets are earmarked for retirement, and the baby boomer generation has now begun to retire and tap those dollars. We believe that generating new sales to offset future redemptions will help stabilize the fund’s cash flows and assist Harry in most effectively directing investment strategies for the benefit of fund shareholders.”
According to Morningstar data, the large-growth fund has four-stars and some $45 billion in assets under management with a 0.53 percent expense ratio. In 2007, it had returns of 18.8 percent, about 5.5 percent above the average performance of funds in its category and 13.3 percent ahead of the S&P 500. The fund’s five-year average return is 11.2 percent, while its 10-year average is 6.3 percent — roughly equal to its peers and slightly below the S&P. It was down 10 percent in January 2008.
The fund’s major holdings, as tracked by Morningstar, are Nokia, Google, Staples and Canadian Natural Resources. Its annual turnover is 41 percent. By industry, about 42 percent of the fund’s stock holdings are in services, 31 percent in information technology and 27 percent in manufacturing.
Fidelity Investments has some $3.4 trillion in custodied assets and provides services to more than 24 million individuals and institutions as well as through 5,500 financial intermediary firms.
T. Rowe Price Group reports that it had net revenues of $598 million and net income of nearly $191 million in the fourth quarter of 2007 vs. net revenues of $489 million and net income of $149 million in the same year-ago period. Assets under management of $400 billion at December 31 were up $3.2 billion, or nearly 1 percent, during the fourth quarter, the fund company says. Net cash inflows from investors totaled $9.1 billion during the fourth quarter, more than offsetting the quarter’s decline in assets from lower market valuations.
Results for the full-year 2007 include net revenues of more than $2.2 billion and net income of $670 million-plus. Assets under management increased close to 20 percent or $65.3 billion during 2007. Net cash inflows from investors totaled $33.8 billion, according to T. Rowe Price, and net market appreciation and income added $31.5 billion to assets under management during the year.
For the year, net inflows to the mutual funds were $20.2 billion, including $10.7 billion that originated in the target-date Retirement Funds. As of December 31, the firm employed 5,081 associates. In 2008, advertising and promotion expenditures are expected to be up about 15 percent vs. 2007, and spending in the first quarter of 2008 is expected to be up about $2 million from the fourth quarter of 2007.
John Hancock Funds announced that the new John Hancock Optimized Value Fund (JOVAX) is available for sale. The fund incorporates a large cap value strategy, combining quantitative modeling with qualitative fundamental research. The new fund is sub-advised by MFC Global Investment Management, an institutional asset manager affiliated with John Hancock’s parent company, Manulife Financial.
The new fund provides retail investors access for the first time to a large cap value strategy that has been offered since 2004 within John Hancock’s Lifestyle Portfolios to participants in 401(k) plans and variable annuity contracts administered by John Hancock. The fund is available to retail investors through their financial advisors and also through John Hancock’s separately managed account network.
Harpreet Singh, CFA, vice president and head of US equities, leads the six-person portfolio management team. “Harpreet is a top-performing manager to whom retail investors have not had access in the past, and we are happy to change that,” says Andrew Arnott, senior vice president and head of product development, John Hancock Funds.
Also in January, John Hancock launched the John Hancock Floating Rate Income Fund (JFIAX), with portfolio management services provided by Western Asset Management. This fund, the first high-yield short-term bond fund in Hancock’s product line, will also be available to investors as an underlying fund in John Hancock’s target date Lifecycle Funds and target risk Lifestyle Funds.
State Street Global Advisors (SSgA) has introduced the SSgA Core Edge Equity Fund, a long-short (130/30) mutual fund that seeks to achieve long-term capital appreciation over the course of an economic cycle.
Edge strategies, State Street’s version of short-extension or 130/30 approaches, introduce a limited amount of short selling in order to take advantage of a negative viewpoint in the stock-ranking process while providing capital for additional long positions of the same magnitude to maintain 100 percent exposure to a benchmark, the company says. State Street has more than 15 years of experience in managing long-short equity investment strategies, and as of December 31, 2007, the firm managed $12.8 billion in Edge strategies.
Janet Levaux is the managing editor of Research; reach her at email@example.com.