Regulatory filings show that many Fidelity portfolio managers put their money where their mouths are--millions worth, according to a report in The Wall Street Journal..

Fidelity managers faithful to their own funds include heads of two of the largest.

William Danoff, who runs Fidelity's $62.5 billion Contrafund, had more than $1 million of his own money invested in it as of the end of 2005, according to mandated filings with the Securities and Exchange Commission. Danoff had another million invested in Fidelity's $6 billion New Insight Fund, another fund that he manages. Danoff has done so well with the two funds--Contrafund has returned 22%, on average, over the past three years--that Fidelity is closing the two funds by the end of this week.

The personal investment holdings of portfolio managers, such as Danoff, have been made public only since February 2005. The purpose of the SEC rule was to increase transparency, but required managers to report only the range of their holdings. For example, managers note whether they invest between $1 and  $10,000 in their fund, or more than $1,000,000.

Dan Lefkovitz, an analyst with Morningstar, called Danoff's investments "pretty cool."

In his report, entitled "Do Fidelity Managers Eat Their Own Cooking?", Lefkovitz noted that nine other Fidelity managers also invest "more than $1 million" in funds they run. Lefkovitz said such a show of faith tells shareholders that the manager "believes in the fund."

Legg Mason fund manager Bill Miller disclosed that he had more than $1 million in his Legg Mason Value Fund. Managers at Vanguard Group and Janus Capital had similar investments. 

Jim Lowell, editor of the independent Fidelity Investor newsletter,  noted that disclosure of such investments may give investors a "warm, fuzzy" feeling, suggesting that the manager "is in the game together with them." However, he said, performance is the only valid measure.

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