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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (37264)	1/12/2000 7:47:00 PM
From: Les H	Respond to of 99985

Fidelity veteran equity fund manager retires BOSTON, Jan 12 (Reuters) - Fidelity fund manager George Vanderheiden, the influential veteran stock picker whose 29-year record at the world's biggest mutual fund company was the envy of most of his peers, will retire on Feb. 1, Fidelity said on Wednesday. Vanderheiden, whose value-oriented approach to investing had hurt his funds' performance during the market's recent infatuation with growth stocks, will be replaced by two younger managers whose style is more tilted toward growth in line with the forces driving today's bull market. "Charlie Brown and I are going to go fishing together,' the 54-year-old Vanderheiden told reporters during a conference call in a reference to the recent end of the Peanuts comic strip. He will remain a director of the company and work part time as a coach and mentor to younger portfolio managers, Fidelity said. Vanderheiden said he had no plans to start his own company or work at a Fidelity rival, and would not rule out an eventual return to the mutual fund giant. Vanderheiden was managing about $36 billion in three funds at the end of his career, down from his peak a few years ago, but still ranking him among the top managers at Fidelity. Observers said Vanderheiden's influence at Fidelity was far greater than that of a simple fund manager. He joined the company in 1971, when it managed less than $4 billion, and earned a reputation over the years as a smart stock picker who favored value investing. Fidelity now manages almost $900 billion. ``He was a careful long-term oriented manager who could see opportunities in large companies before most,' said Mike Lipper of fund tracking firm Lipper Inc. ``The trouble in investing in value even when value is hot is you can get mired down in companies with very specific problems and he seemed to avoid that,' Lipper said. ``When value worked, he did better than most.' Lipper described Vanderheiden in the same breath as Peter Lynch, the growth-loving fund manager who made Fidelity into a household name in the 1980s. ``To some degree he was a counterbalance to Peter Lynch. Peter was a growth investor. George was more of a value investor,' he said. Though Vanderheiden's penchant for value cost him last year, the return on the funds he managed for the bulk of his career was higher during his tenure than the return on the S&P 500 index over the same period, a record not very many money managers can match. Destiny 1, which he managed from its inception, returned an average annual total of 19.26 percent compared to the S&P's 16.89 percent over the same period. Advisor Growth Opportunities brought in 20.62 percent in average annual total return compared to the S&P's 19.26 while he ran it, and Destiny II returned an average 22.71 percent from December 1985 through May 1998 compared to the index's 17.54 percent over the same period. Lipper also acknowledged that Vanderheiden's departure was a reflection of the profound changes in the market since the young stock analyst arrived at the fledgling Fidelity. ``There may be some element of that,' Lipper said. ``There is a structural change. Whether it's a fundamental change or a change in fashion we'll only know over time.' Star manager Bettina Doulton, who joined Fidelity in 1986 as an analyst and began managing money in 1993, will take over Fidelity Advisor Growth Opportunities and Fidelity Variable Insurance Products III: Growth Opportunities Portfolio from Vanderheiden. Karen Firestone, who has been a money manager at Fidelity since 1987, will take over Fidelity Destiny 1 in addition two the two funds she already manages. Vanderheiden acknowledged that his favoring of value stocks had hurt his funds but nevertheless offered cautionary parting advice to fellow fund managers. ``Valuations are very inflated and what's going to cause them to end I really don't know. In the past the obvious answer has been interest rates,' he said. ``I don't think it's so obvious in this case. I think it's going to come from out of the blue somewhere...But it's been a momentum-driven market and we all know that momentum-driven markets don't end that well.'