Nihil and Intel Investors - Fidelity Magellan's Intel Holdings are in the Top 5 for this Investment Fund.
Intel is in GOOD COMPANY - with General Electric, Microsoft and Cisco !
Paul
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10/19 8:34A (DJ) Fidelity's Biggest Stock Funds Boost Their Technology Stakes
Story 0020 (CSCO-D, CSCO, GE, GEGE-D, INTC-D, INTC, MSFT, MSFTP, X.FIN...)
By David Franecki, Dow Jones Newswires
The biggest stock funds at Fidelity Investments, running leaner and more top-heavy, boosted their technology stakes in the third quarter.
Fidelity's flagship Magellan Fund finished September with 21.5% of its assets invested in technology stocks, according to a guide issued Friday by the Boston mutual-fund giant. That compares with a tech exposure of 16.6% for the Standard & Poor's 500, the stock benchmark with which massive Magellan, with $65.88 billion in assets, is often compared.
Magellan's 21.5% tech bet as of Sept. 30 was up from 18.1% at the end of August and up from 16.8% on Sept. 30, 1997. Three of Magellan's five-largest holdings are technology stocks: Microsoft Corp. is its No. 2 holding, followed by Intel Corp. and Cisco Systems Inc. Magellan's No. 1 holding is General Electric Co.
Fidelity Contrafund, with $31.86 billion in assets, increased its technology-stock stake to 19.6% in September, from 17.3% at the end of August, which is the same amount it had at the end of September 1997. Contrafund made Cisco its No. 6 holding as of Sept. 30. The computer-networking stock wasn't even in the fund's top 10 at the end of the second quarter, on June 30. While an increased exposure to tech shares is clear, what isn't is exactly how much the Fidelity funds bought, and ow much is attributable to the stock
sector's strong performance in the recently ended third quarter. The tech-heavy Nasdaq Composite index,for instance, was up about 13% in September,
when the big Fidelity funds added a significant amount to their tech holdings.
Managers of the biggest Fidelity funds also are trimming the number of
stocks they keep in their portfolios.
Magellan owned 523 stocks at the end of 1997, but fund manger Bob Stansky
had sliced the portfolio to 351 by the end of September, the company's
mutual-fund guide said. Contrafund manager Will Danoff hacked away more than
half of the names in his fund's portfolio this year, going from 654 stocks at
the beginning of 1998 to 310 at the end of September.
Nikolas Lanyi, editor of Fidelity Insight, a newsletter that tracks
Fidelity funds, says streamlining large portfolios should marginally help the
funds because it gives the stocks that remain in the portfolios a greater
impact on the funds' overall returns.
"They get a little more bang for their buck out of the top holdings," Mr.
Lanyi says. "The manager's best ideas count for a little more."
Contrafund's Mr. Danoff echoed similar thoughts in the fund's semiannual
report: "Typically, the fund will receive most of its performance boost or
drag from its top holdings, and this streamlining of positions enabled me to
concentrate on my very best ideas," he wrote.
The portfolio trimming has made Magellan and Contrafund more top-heavy. At
the end of September, Magellan had 21.9% of its assets invested in the fund's
top-10 stocks, up from 15.7% at the end of 1997. Contrafund had 23.5% of its
assets in its top 10 as of Sept. 30, up from 13.7% at the end of 1997.
Mr. Lanyi said Fidelity is making the change in many of its funds, and said
investors should welcome it. "This isn't dramatic or hair-raising, but it is
an improvement," he said.
Tracking fewer stocks lets fund managers focus their research on a smaller
range of stocks and get to know their holdings better, Mr. Lanyi says.
The $40.31 billion Fidelity Growth & Income Fund cut its holdings to 224
names from 247 at the end of last year, but it retained its heavy 17.3%
exposure to health stocks, which includes high-flying pharmaceutical issues.
That's more than four percentage points higher than the S&P 500's exposure to
health stocks.
The cash position at Fidelity's three largest funds was stable or slightly
lower in September. Magellan had 5.8% in cash at the end the month, down from
7.6% a month earlier. Contrafund had 12.7%, down from 14.2%, while Growth &
Income finished September with 6.5% cash, up slightly from 6.4% at the end of
August.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved.
Additional Codes (I/CGL, I/CMT, I/FIS, I/SEM, I/SOF, I/TEL, N/TEC, N/WEI,
M/CGL, M/FIN, M/TEC, P/DBK, P/DCO, P/DCS, P/DFZ, P/DIS, P/DSE, P/DTE, P/NDV,
R/CA, R/CT, R/MA, R/NME, R/PRM, R/US, R/USE, R/USW, R/WA)
Page Retrieved On: 10/20/98 |
