Reuters seems to have closed retrievals now to permit them to fix the
database. A lot of the symbols were flagged as missing, etc. When
some stocks have after-hours trading, such as some of the heavily
traded stocks or when stocks report earnings, I also find
discrepancies among the various sources don't synch till past 10 pm.
May have to rethink data downloading when extended trading commences.
Fidelity Magellan Approaches $100 Bln
By Tim Quinson
Boston, July 9 (Bloomberg) -- Fidelity Investments' flagship Magellan Fund is
poised to bust through $100 billion, the latest sign of how big the U.S. mutual
fund business has become.
Fidelity Magellan, managed by Robert Stansky, has about $99.2 billion of
assets under management, up from $97.6 billion at the end of June, buoyed by
the recent stock market rally, analysts estimated. Any 1 percent gain by the
Standard & Poor's 500 Index probably would put the fund over the $100
billion mark.
Magellan, whose assets have more than doubled since 1995, may soon be
eclipsed as the world's biggest mutual fund. Vanguard Group's flagship Index
500 Fund is growing at an even faster rate and has an estimated $94.2 billion
of assets.
''It may be a brief hurrah for Fidelity,'' said Geoff Bobroff, an independent
industry consultant in East Greenwich, Rhode Island. ''Even if Magellan is
passed, Fidelity is still the industry's leader.''
For perspective, the combined assets of all stock funds totaled a mere $83.1
billion at the end of 1985, according to the Investment Company Institute, the
industry's trade association. The total assets of the entire fund business have
increased about five-fold to $5.87 trillion since the start of the decade.
Magellan has been one of the industry's great success stories, earning huge
amounts of money for Boston-based Fidelity and shareholders over the years.
Fidelity reported in a recent letter sent to Magellan shareholders that the fund's
total management fees rose to $325.8 million in the 12-month period ended
March 31 from $264 million in the comparable year-earlier period.
Johnson's Tenure
Fidelity Magellan opened in 1963 and the fund's first manager was the
company's current chairman and chief executive, Edward C. Johnson III.
Johnson also happens to be the manager who generated the biggest annual
returns while running Magellan.
Johnson ran Magellan from the fund's inception in 1963 until 1972. In that
nine-year period, he steered the fund to a cumulative 910-percent advance, or
an annual gain of 30.6 percent, according to newsletter editor Eric Kobren.
Under his most illustrious successor, Peter Lynch, the fund rose 2,703 percent
in 13 years, or an average annual rate of 29.2 percent.
Jeffrey Vinik, who took over the fund after Morris Smith, Lynch's
replacement, abruptly resigned to move his family to Israel, guided Magellan
to an annual return of 16.9 percent between July 1992 and May of 1996. The
S&P 500 rose at annual rate of 16.6 percent in the same period.
Stansky, who succeeded Vinik, has guided Magellan to annual gains of about
27 percent since mid-1996, a period when the S&P 500 gained 28.4 percent.
''For the sake of fairness, we should point out that when (Johnson) ran
Magellan the fund was closed to investors'' in mid- 1965 and didn't open until
1981, Kobren said. Johnson passed control of the fund to Richard
Habermann in 1972.
That meant Johnson didn't have to worry about cash flows and he had a much
smaller asset base to put to work -- $10 million compared with almost $100
billion today, Kobren said.
Johnson could make quick trades, buy initial public offerings and invest in the
smallest of companies -- luxuries no Magellan manager has had since Lynch's
early days, Kobren said.
Lynch was named manager of the Magellan fund in May 1977, when the fund
had about $22 million in assets. By the time Lynch left Magellan in 1990, it
had $12.3 billion in assets, which precluded big bets on very small companies,
Kobren said.
Some More History
Managing Magellan is a lot different today than it was when Johnson ran it.
Still, it's difficult to overlook Johnson's success. His performance was stellar,
considering the S&P 500 rose at an annual rate of just 7.9 percent in the nine
years he ran the fund, Kobren said.
While Johnson beat the S&P 500 by 22.7 percentage points a year, Lynch
beat the S&P 500 by 13.4 percentage points a year in his tenure.
Magellan started out as the Fidelity International Fund in December 1962.
Shares of the fund were sold to the public for the first time in May 1963 to
offer investors capital appreciation through overseas stocks.
Shortly thereafter, the U.S. Congress passed the Interest Equalization Tax,
resulting in a tax on non-U.S. investments. The tax made it unattractive to own
a fund investing outside the U.S., so Fidelity redefined the fund's strategy
primarily toward U.S. stocks. On March 29, 1965, it was renamed the
Magellan Fund.
Magellan was closed to new investors two months later and stayed closed for
16 years. Fidelity said it closed the fund to concentrate its marketing efforts on
the Fidelity Trend Fund and the Fidelity Capital Fund. The two U.S. stock
funds merged in 1979 and became Fidelity Trend Fund.
Two days after Magellan Fund's assets were merged with the Fidelity Salem
Fund in July 1981, it was reopened to investors and it didn't close again until
September 1997.
Magellan's recent asset growth has been spurred by the fund's above-average
performance. Magellan gained 33.6 percent last year, exceeding the 28.6
percent advance of the S&P 500, and increased another 15.6 percent this
year, beating the 14.2 percent gain of the index. |
