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Magellan Trims Tech Holdings
By Joe Bousquin
Staff Reporter
4/16/99 12:46 PM ET
As technology stocks soared in the first quarter, Fidelity
Magellan, the world's biggest mutual fund, was significantly
decreasing its technology holdings.
The $90.7 billion fund's technology holdings slipped from
25.5% of the portfolio on Jan. 31 to 20.9% at the end of
March, according to Fidelity's monthly mutual fund report.
That represents about $4 billion moved out of the sector.
Intel (INTC:Nasdaq), the onetime darling of tech managers
everywhere, has disappeared from the giant mutual fund's
top-10 holdings. It was the No. 4 holding as of Dec. 31,
1998. America Online (AOL:NYSE), which made news
earlier this year when it showed up in the mutual fund's No.
3 spot, has now dropped to No. 4.
"Alone that might not be that interesting, but [portfolio
manager Robert] Stansky is one of the best technology
pickers on the Street," says Jim Lowell, editor of the Fidelity
Investor, an independent newsletter that covers Fidelity
mutual funds. "So it's at least one warning sign on the
technology superhighway to at least slow down a bit."
AOL's drop among the fund's top-10 holdings was significant
because "last quarter was one of the best quarters AOL has
ever had," Lowell says. "That indicates it's a trim" rather
than a decrease in the value of the holdings.
Shares of AOL rose 89.5% in the first quarter, according to
Baseline.
Magellan has owned AOL since 1994, when the company
was still struggling to familiarize a nation with a new
phenomenon called the Internet. Fidelity was one of the first
mutual fund firms to put its weight behind the company.
The technology-heavy Nasdaq Composite Index has
offered a bumpy ride over the last few days, as investors
have rotated money out of technology and into the more
stalwart cyclicals of oil producers, steel makers and paper
firms.
Fidelity's $41.2 billion Contrafund, run by Will Danoff, also
significantly reduced its position in technology, from 26.3%
to 18.9%. Both Stansky and Danoff have been moving their
money into energy stocks, says Lowell.
Scott Beyerl, a Fidelity spokesman, says the two funds'
moves to sell technology don't represent a company-wide
view on the sector.
"There's no Fidelity-wide view on any specific sector. It's
really each portfolio manager's view," Beyerl says.
Magellan Trims Tech Holdings
By Joe Bousquin
Staff Reporter
4/16/99 12:46 PM ET
As technology stocks soared in the first quarter, Fidelity
Magellan, the world's biggest mutual fund, was significantly
decreasing its technology holdings.
The $90.7 billion fund's technology holdings slipped from
25.5% of the portfolio on Jan. 31 to 20.9% at the end of
March, according to Fidelity's monthly mutual fund report.
That represents about $4 billion moved out of the sector.
Intel (INTC:Nasdaq), the onetime darling of tech managers
everywhere, has disappeared from the giant mutual fund's
top-10 holdings. It was the No. 4 holding as of Dec. 31,
1998. America Online (AOL:NYSE), which made news
earlier this year when it showed up in the mutual fund's No.
3 spot, has now dropped to No. 4.
"Alone that might not be that interesting, but [portfolio
manager Robert] Stansky is one of the best technology
pickers on the Street," says Jim Lowell, editor of the Fidelity
Investor, an independent newsletter that covers Fidelity
mutual funds. "So it's at least one warning sign on the
technology superhighway to at least slow down a bit."
AOL's drop among the fund's top-10 holdings was significant
because "last quarter was one of the best quarters AOL has
ever had," Lowell says. "That indicates it's a trim" rather
than a decrease in the value of the holdings.
Shares of AOL rose 89.5% in the first quarter, according to
Baseline.
Magellan has owned AOL since 1994, when the company
was still struggling to familiarize a nation with a new
phenomenon called the Internet. Fidelity was one of the first
mutual fund firms to put its weight behind the company.
The technology-heavy Nasdaq Composite Index has
offered a bumpy ride over the last few days, as investors
have rotated money out of technology and into the more
stalwart cyclicals of oil producers, steel makers and paper
firms.
Fidelity's $41.2 billion Contrafund, run by Will Danoff, also
significantly reduced its position in technology, from 26.3%
to 18.9%. Both Stansky and Danoff have been moving their
money into energy stocks, says Lowell.
Scott Beyerl, a Fidelity spokesman, says the two funds'
moves to sell technology don't represent a company-wide
view on the sector.
"There's no Fidelity-wide view on any specific sector. It's
really each portfolio manager's view," Beyerl says.
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