Magellan's Stansky Used Market Decline to Buy Tech Stocks
Bloomberg News
November 4, 1998, 8:30 p.m. ET
Magellan's Stansky Used Market Decline to Buy Tech Stocks
Boston, Nov. 4 (Bloomberg) -- Robert Stansky, manager of
Fidelity Investment's Magellan Fund, said he used the decline in
the stock market in September to increase the fund's holdings of
technology stocks like Microsoft Corp. and Cisco Systems Inc.
In a letter to Magellan shareholders detailing the fund's
performance in the six months ended Sept. 30, Stansky said he
also cut the number of stocks in the portfolio to 350 from 470 at
the end of March. At the same time, he increased his investments
in the fund's top 10 stocks.
''Historical analysis I've done shows that the fund's
largest holdings have had the strongest positive influence on its
overall performance,'' Stansky said in the semi-annual report.
''I believe I can incrementally improve Magellan's long-term
performance by giving heavier weighting to my best ideas.''
The changes came as the Magellan Fund, the world's largest
mutual fund, reported a negative return of 8.04 percent in the
six months through the end of September, leaving it with assets
of $65.8 billion. That compared with a decline of 11.8 percent by
the average growth fund tracked by Lipper Analytical Services and
a decline of 6.97 percent by the Standard & Poor's 500 Index.
Stansky said that he used the decline in financial markets
in September to buy stocks or increase his holdings in companies
that still have the potential to boost earnings substantially in
the next few years.
He said technology companies, such as Microsoft, Cisco, Dell
Computer Corp. and Lucent Technologies Inc. made the greatest
contribution to the fund during the six months. At the end of the
period, five of Magellan's top 10 holdings were technology
companies while a sixth was a pharmaceutical company and a
seventh was a telecommunications company.
The top 10 holdings were General Electric Co., Microsoft,
Intel Corp., Cisco, Merck & Co., Wal-Mart Stores Inc., Home Depot
Inc., MCI WorldCom Inc., Lucent, and America Online Inc.,
according to the report.
Stansky said the percentage of the fund's investments in its
top 10 holdings rose to 21.8 percent on Sept. 30 from 16.6
percent at the end of March. The fund's holdings in technology
companies rose to 21.6 percent from 15.3 percent six months ago.
Stanksy said his biggest disappointment in the last six
months was Cendant Corp., whose shares plunged after the consumer
services company discovered accounting fraud in April. The fraud
forced Cendant to restate its profit for the past three years.
--David Callaway in the San Francisco newsroom (415) 743-3517 /ag |
