Fund giant Fidelity Investments is having a hard time generating sales for its mutual funds this year due to the losses of its once-mighty flagship fund, the Fidelity Magellan Fund, Boston Globe columnist Steven Syre writes.
Syre asserts that the only way to quell the losses is to fix the Magellan problem now by, among other things, replacing longtime fund manager Bob Stansky.
Despite its problems, Magellan is not beyond fixing as a product or an investment.
Among the other things Fidelity must do is loosen the mandate that keeps Magellan hewing so close to the S&P 500 that it acts as a closet index fund. Fidelity denies any such arrangement.
"But Magellan has looked, acted and quacked like a duck for a long time. Set the duck free," Syre wrote.
Finally, Syre suggested that Fidelity should reopen Magellan to any new investor in time.
The fund was closed years ago when it grew to nearly twice its current size, primarily under the aegis of Peter Lynch. It remains closed today due to lack of interest. Reopening Magellan would send a message of confidence, according to Syre.
(c) 2005 Money Management Executive and SourceMedia, Inc. All Rights Reserved.