Finance and technology stocks have put the Fidelity Magellan fund in a worse position than its benchmark, the Standard & Poor’s 500, and even the fund’s manager says he’s disappointed, Dow Jones reports.

In his semi-annual shareholder report for the period ended Sept. 30, portfolio manager Harry Lange admits the fund did not do well. Certainly, that is true; year-to-date through Friday, the fund is down nearly 52%, compared to the 39% decline in the Standard & Poor’s 500 Index.

Lange said he didn’t think the financial crisis would be as pervasive as it has been, and so, held onto financial and technology stock—which have sorely disappointed and have yet to rebound. “Looking at sectors, stock selection in technology had a sizable negative impact on the fund’s performance,” Lange wrote.

At this point, Lange says it could take a good long while for the economy to turn around, but in the meanwhile, he is searching for bargains in the stock market, saying that when things appear the “gloomiest” is typically an opportune time to buy.

Lange is looking for domestic companies that export to emerging markets, as well as those with strong cash flow. “I think they have the best potential not only to survive, but eventually to thrive when the economic backdrop improves,” he said.

The $21.9 billion Magellan fund rose 19% in 2007.

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