Fidelity replaces manager of Magellan Fund
Jeffrey Feingold named; assets shrank 67% under predecessor
After years of subpar returns, Fidelity Investments yesterday replaced the manager of the Fidelity Magellan Fund, its onetime flagship mutual fund.
The move highlights the Boston financial company’s long-running problems with Magellan, once the world’s biggest mutual fund with more than $100 billion in assets and star managers such as Peter Lynch and Jeffrey Vinik.
Harry W. Lange, 59, who had run the stock fund since October 2005, will move to an undetermined position at the mutual fund giant, the company said.
Jeffrey S. Feingold, 40, who has successfully run several smaller Fidelity funds, will take over Magellan.
Lange was not available for comment, a Fidelity spokesman said.
Brian Hogan, president of Fidelity’s Equity Group, said Lange “will be exploring other opportunities within the company that leverage his investment management talent and experience.’’
Magellan has struggled with mediocre performance for more than a decade. Assets shrunk to $17 billion from $52 billion under Lange, and Magellan is now smaller than eight other Fidelity funds.
“It’s really become known as a dog of a fund and sort of an embarrassment for Fidelity,’’ said John Bonnanzio, executive editor at the Fidelity Insight newsletter in Wellesley. “It’s really been a difficult time.’’
During Lange’s tenure, the fund lagged more than 90 percent of comparable funds with break-even returns, according to Morningstar Inc., a Chicago research firm.
Bonnanzio said the fund initially showed promise under Lange, but was hit unusually hard by poor stock picks during the financial crisis and never recovered. It has lagged 95 percent of its peers so far this year, according to Morningstar data.
Lange joined Fidelity as a research analyst in 1987 and had successfully run a number of funds, including the Fidelity Capital Appreciation Fund, before taking over Magellan.
“Harry has done an excellent job in a number of investment management roles during his nearly 25-year career at Fidelity,’’ Hogan said. “He has put in a great deal of time and effort to take on the difficult task of managing Magellan through a very challenging period.’’
Hogan praised Magellan’s new manager as “a seasoned investment professional with a successful long-term track record at Fidelity.’’
Feingold, who joined Fidelity in 1997 as a stock analyst following the footwear, apparel, and textile industries, will continue to manage four other funds. One of them, the $1 billion Fidelity Trend fund, which focuses on companies with fast-growing earnings, beat 90 percent of its peers over the past three years, according to Morningstar.
Bonnanzio said Feingold could turn around Magellan.
“We’re seeing it as a positive development for the fund’s shareholders,’’ he said.