The layoffs have started in Hong Kong and real estate space is being returned to landlords or subletted. The developing situation is not going to be pretty. Conceptual deals are not getting funded by VCs at all now, as the Growth Enterprise Market's reputation is in the toilet and VCs see no exit to deals requesting funding. The music has stopped and the biggest companies have won the market but will lose valuation anyway.
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NEW YORK (CNNfn) - Technology apparently was deemed not so nifty by the portfolio manager of Fidelity Fifty.
John Muresianu, who heads the large-cap blend fund, cut his tech holdings to 0 percent - that's zilch -- as of June 30 from 8.4 percent at the end of May, according to the latest monthly report from Fidelity Investments and the company's Web site.
Given that Fidelity Fifty is a concentrated fund with no more than 60 holdings usually, that means Muresianu probably sold Microsoft (MSFT: Research, Estimates) and Cisco (CSCO: Research, Estimates), which were among his top 10 holdings in May and probably accounted for much of the 8.4 percent technology allocation, said Jim Lowell, editor of the independent FidelityInvestor.com.
AT&T (T: Research, Estimates) and Vodafone (VOD: Research, Estimates) also slipped from the top 10 list by the end of June.
The move away from technology was counter to that of Muresianu's Fidelity brethren, who, while not buying more technology, were standing tall with the allocations they already had, Lowell added.
Contrary, too, was Muresianu's decision to bump up his energy sector holdings to 23.1 percent from 15.4 percent, and particularly his decision to increase the fund's precious metals exposure to 15.5 percent from 9.9 percent.
"No other growth fund at Fidelity has a precious metals holding in its top 10," Lowell said. Fidelity Fifty counted Barrick Gold (ABX: Research, Estimates) as its No. 1 holding and Newmont Mining (NEM: Research, Estimates) as its No. 5 at the end of June.
"I don't know what it is," Lowell said of Muresianu's reasoning, surmising that perhaps he expects greater consolidation in the beaten down sector or anticipates greater retail momentum for gold in markets such as India. But, Lowell said, "I would rather see him go to 20 percent cash if he's looking for a defensive place."
So far, Muresianu's moves have not saved Fidelity Fifty from the market's thrashing of large caps this year. The fund, which is small by Fidelity standards with only $536 million in assets, ranks in the top 2 percent of the worst-performing large-cap blend funds for the year through July 27, according to Morningstar. Year-to-date, the fund is down 10.1 percent.
Nevertheless, Lowell is far from writing off the moves or Muresianu, who, he said, "delivers the goods consistently," adding that when Muresianu took over Fidelity Fifty in early 1999, he made the fund worth thinking about for aggressive growth investors interested in niche plays in the market.
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