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.