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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: J. P. who wrote (3029)	7/16/1998 10:58:00 AM
From: William Hunt	Read Replies (2) \| Respond to of 21876

THREAD ---Dow Jones Newswires -- July 15, 1998 Magellan Cleans Cendant And Philip Morris From Top-10 List By Richard C. ten Wolde NEW YORK (Dow Jones)--The mutual fund world's behemoth has moved. Although the moves seem slight, they were enough to keep the leviathan, the Fidelity Magellan fund, ahead of the Standard & Poor's 500-stock index for the second quarter running. Missing from the $75 billion fund's top-10 holdings is Cendant Corp. (CD), which got hammered after announcing accounting irregularities in April. Philip Morris Cos. (MO) is also gone from the top-holdings list. It isn't clear whether those equities have been flushed entirely from the fund, for Fidelity Investments only provides a top-ten list of holdings and will not discuss specific companies. Added to the top holdings were Lucent Technologies Inc. (LU) and American International Group Inc. (AIG). The fund was up 3.37% in the second quarter compared with a 3.3% gain - assuming reinvested dividends - of the S&P. American International and Lucent have been climbing this year, helping to fuel Magellan's gains. Shares of American International have jumped about 37% this year alone and Lucent has lifted about 27% since the stock split April 2. Robert Stansky, who has now completed two years as manager of the fund, has marshaled a turnaround that has lifted the fund from a laggard to a leader. After his predecessor Jeffrey Vinik made an ill-timed bet on bonds in 1996, Stansky took over. He muddled for a while but the last 12 months have been encouraging. But can the improved performance stay above the index? Russ Kinnel, equity fund editor at Morningstar Inc., the Chicago fund data firm, doesn't think that is likely. "It's a decent fund with decent prospects but don't expect it to have monster returns," Kinnel said. The fund's three-year cumulative gain is a dismal 76.45%, ranking it 347 out of 559 growth funds Lipper Analytical Services Inc. has tracked for that time period. But in the 12-month period ended Tuesday, the fund has gained 30%, just a hair behind the S&P's 30.26% gain with reinvested dividends. The short spurt has lifted the fund above 73% of its peers. Stansky has let the fund's weighting in the technology sector grow in the last year, with 16.5% of assets in that group of stocks now, compared with 13.9% at the same time last year. The S&P has a 15% weighting in tech stocks. Though the fund has received a boost from financials, such as Citicorp (CCI), which announced its planned merger with Travelers Group Inc. (TRV) in April, Stansky hasn't added to his underweighting in the sector. The fund has 13.9% of assets in financials compared with 18% in the S&P. While there are minor differences between Magellan's and the S&P's weightings, they aren't so significant that the fund will ever stray far from the index, Kinnel said. It isn't an index fund, but the index sure plays an important role, Kinnel added. "At the end of the day, how he does at picking the 100 largest companies will determine his relative performance." Though the fund has consolidated its number of holdings from 477 at the end of the first quarter to 438 now, it still has a wide spread among the nation's largest firms. Only the top 13 holdings represent at least 1% of assets, according to Morningstar. Magellan's top-ten holdings as of the second-quarter's end are: General Electric Co. Microsoft Corp. Wal-Mart Stores Inc. Merck & Co. Home Depot Inc. Bristol-Myers Squibb Co. Citicorp Cisco Systems Inc. Lucent Technologies Inc. American International Group Inc. BEST WISHES BILL