Fidelity Magellan

Fidelity recently reopend it's flagship mutual fund Fidelity Magellan (FMAGX). The fund has been closed to new investors for the past ten years.

In the 1980s the fund became famous along with it's manager, you may have heard of him, Peter Lynch. Thousands of people poured money into the fund causing Fidelity to close the fund to new investors. The fund showed it's bloated state throughout the 1990s where the fund performed nearly equally to the S&P 500. However, being an active fund meant fees of around 1%. With assets of nearly $70 billion the fund had more money than could be managed effectively.

Now, however, many Magellan holders have retired and are drawing down their assets. With $42 billion today, the fund is better able to compete. Magellan's new manager Harry Lange has moved it into a new direction becoming more of a large-cap growth fund. Returns have turned around from the late 90's and early 2000s. Prior to Lange, many lamented that Magellan had become an S&P 500 clone leading credence to the popular notion of buying index funds.

Lange has been with Fidelity for 20 years and previously captained the Fidelity Capital Appreciation Fund and the Fidelity Advisor Small Cap Fund. Many appreciate his penchant for true active management. Last year Lange outperformed the S&P 500 by 13 percentage points. How 2008 is going to affect his performance remains to be seen, but the opening of Magellan provides an interesting option for investors.

With my high yield money market dipping below 4% APY with the recent 0.75% drop in rates, I just moved $5,000 into Mr. Lange's capable hands. I'm hoping his successes continue.

Disclaimer

What Isn’t

This blog is NOT financial advice. I am not a financial guru. I do not speak at seminars. I do not write books (yet). I am not a Certified Financial Planner (CFP) nor am I a Certified Public Accountant (CPA). I do not even have a business degree!

What Is

This blog is about MY money, usually focusing on how I spend less of it, how I invest it, and sometimes how I make more of it. This is that neighborly talk you have about money. Sometimes the advice is sound. Sometimes the advice is stupid. You judge that for yourself. What works for me may not work for you. This is an open discussion about my financial life and what I would do in certain situations. Agree or disagree, leave comments and I will respond to them or write further entries regarding them.

About Me

My name is Jason. I am 24 years old. I graduated with a Bachelor of Science in Computer Science, but I have an interest in money and things related to it. I am currently employed full time and single (from a financial standpoint). I want to know how to earn more of it, save more of it, protect it, invest it, avoid taxes, etc.