After trailing the S&P 500 last year and delivering the worst returns for his fund in nearly 10 years, Will Danoff, skipper of the $69 billion Fidelity Contrafund, has sold energy stocks, particularly oil and gas, and bulked up on financial services, Bloomberg reports.
Last year, Contrafund, Fidelity’s largest fund, rose 12%, trailing the S&P 500’s 16% rise. It marked a departure for Danoff, who in an analysis of 140 large-cap growth fund managers that Bloomberg undertook, delivered the best five-year performance of any of them. Evidently what he didn’t expect was for crude oil priced to plummet 28% last fall due to record temperatures in the northeast.
In a shareholder report, Contrafund admitted that “weak stock selection” led to disappointing returns.
By the end of December, Contrafund had reduced its exposure to energy to 7.1% of its assets, down from 11.4% in June.
Still, Danoff, who has managed the fund since 1990, has delivered strong returns for the most part. Over the past five years, the fund rose an average annual rate of 12%, compared to the S&P 500’s 6.4% average annual climb.
“Will Danoff has served his fund’s shareholders extremely well,” defended Fidelity spokesman Michael Shamrell. “He has proved his portfolio management abilities over the long term and in a wide variety of market conditions.”
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