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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (2582)	7/19/2002 10:35:07 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

Magellan assets hit a 4-year low Drop reflects decline in share value, investor fear By Bloomberg News, 7/19/2002 he assets of Fidelity Investments' biggest fund, Magellan, fell to the lowest monthly level in almost four years as US stock markets dropped and investors withdrew. Magellan Fund's assets slipped to $65.9 billion at the end of June from $71.9 billion in May, according to Fidelity's Mutual Fund Guide. The fund peaked in August 2000, when it had $109.8 billion in assets, the company said. The fund was hurt by a decline in the value of the shares it held and about $519 million in redemptions, analysts said. Investors yanked up to $15 billion from stock mutual funds last month, estimated Avi Nachmany of Strategic Insight, as accounting and management scandals at companies such as WorldCom Inc. and Tyco International Ltd. eroded confidence in the markets. ''We are in one of the greatest bear markets of all time - the third-worst bear market in stock market history,'' said Jim Weiss, chief investment officer at State Street Research & Management Co. ''The buying power is there. Investors are not willing to put it in.'' Magellan's outflows last month were the biggest since September, when investors took out about $809 million in the wake of the terrorist attacks, according to Fidelity Investor. It leaked $1.76 billion in the first half, putting it on pace for a third year of outflows, said David Pittelli, a senior analyst for the Needham, Mass.-based industry newsletter. Other funds' assets also are shrinking as the Dow Jones industrial average declined 15 percent this year, the Standard & Poor's 500 index fell 21 percent, and the Nasdaq Composite index dropped 28 percent. Vanguard Group's 500 index has about $77 billion in assets, down almost one-third from a peak of $110.5 billion in August 2000, according to Financial Research Corp. Vanguard 500 and Magellan are the largest stock mutual funds in the United States. This year's stock market decline trails the drop in 1940, when the market fell 50 percent peak to trough, and an 83 percent plunge in 1932, according to State Street Research. Magellan's lower asset level may mean Boston-based Fidelity will get fewer fees for managing the fund, Pittelli said. Still, analysts said it's unlikely that Fidelity would open the fund to new investors. The number one US mutual fund firm wouldn't want the opening of Magellan to detract from potential new investments in other Fidelity funds, they said. Fidelity also may want to see improvement in Magellan's performance, analysts said. Magellan has lost 22 percent this year, slightly more than its benchmark S&P 500. The fund has lagged the index in six of the past 10 years, according to Bloomberg data. Since 1997, only existing investors, and those whose retirement plans offer the fund, could invest in Magellan. Retirement accounts make up 83 percent of its assets.