For the first time in history, Fidelity Magellan, the flagship fund formerly managed by Peter Lynch, has appeared on the Lemon List. That means in the 1st Quarter 2005, Magellan under-performed its peer group average for large-cap core mutual funds by 25% for the past 12 months, and also under-performed its peer group for the past three- and five-year periods.
Huntington Beach, CA (PRWEB) April 29, 2005 -- Since its inception in 1998, many surprises have appeared on Doug Fabian's Quarterly Lemon Lists, and this quarter is no exception. For the first time in history, Fidelity Magellan, the flagship fund formerly managed by Peter Lynch, has appeared on the Lemon List. That means in the 1st Quarter 2005, Magellan under-performed its peer group average for large-cap core mutual funds by 25% for the past 12 months, and also under-performed its peer group for the past three- and five-year periods. Since many 401(k) and pension funds use Magellan as a primary holding, Magellan's appearance is a significant event, and the fund's lack of performance is hurtful to millions of shareholders.
Using the above criteria, Fabian's Lemon List identifies under-performing funds, and frequently fund families such as Putnam, American Express and Janus are seen as big losers. Now, Fidelity Magellan, a fund with an outstanding reputation in the 1980s and early 1990s cannot sustain upward mobility or even keep pace with the S&P's five-year performance of -3.16%. With $60 billion in assets, portfolio manager Robert Stansky must stick with large cap stocks, and lemon stocks like AIG and Home Depot have depressed the fund's overall performance. Now Magellan simply can't even compete with the average performance of other managers.
"Investors and portfolio managers would be much better off selling their Magellan holdings and putting their money into funds with similar objectives like Selected American Shares (SLASX) or Oakmark Fund (OAKMX)," says Doug Fabian, president of Fabian Wealth Strategies and editor of Successful Investing, an investment advisory service with a 28-year track record. "Five years ago, if an investor had put $100,000 into Oakmark Fund instead of Magellan, they would have $170,259 today instead of a paltry $76,164 in the Magellan fund. That's the price of a house in some parts of the USA, or at least a hefty down payment."
To view the total Lemon List, see www.dougfabian.com. The top ten Lemons on Fabian's Lemon List, in order of asset size are below:
Fund Name Ticker Obj Assets (Millions) 1 Yr 3 Yr 5 Yr Exp Ratio
Fidelity Magellan Fund FMAGX LCC 59656.70 3.14 0.43 -5.30 0.70
Fidelity Blue Chip Growth FBGRX LCC 22686.50 1.04 -1.26 -7.67 0.68
AXP:New Dimensions;A, B, Y INNDX LCC 13500.80 -1.57 -1.42 -7.23 0.91
Oppenheimer Capital
Appreciation A, B, Y, C OPTFX LCC 8465.60 2.59 0.53 -5.75 1.09
AIM:Premium Equity A, B, C AVLFX LCC 6465.70 3.43 -2.36 -9.45 1.26
Janus Worldwide JAWWX GL 6400.70 -0.61 -0.92 -11.18 0.92
T Rowe Price International;
Shares, Adv PRITX INTL 5289.30 9.10 6.28 -4.79 0.95
Vanguard US Growth;Inv VWUSX LCG 5184.30 -0.76 -3.88 -15.75 0.53
Fidelity Aggressive Grow FDEGX MLG 4594.90 -2.43 -3.02 -23.05 0.83
AllianBer Large Cap Growth B,
A, Adv, C APGBX LCG 4501.90 -0.71 -4.37 -14.34 2.34
About Doug Fabian:
Doug Fabian began his 26-year investment career in 1979 as a fund analyst for the Telephone Switch Newsletter--the mutual fund review his father started in 1977. He is now president of Fabian Wealth Strategies, and editor of Successful Investing, a newsletter advisory service. He regularly appears at seminars around the country and hosts Southern California's number one investment talk radio show, "Making Money with Doug Fabian." Fabian has appeared on the pages of the large newspapers such The Wall Street Journal, Los Angeles Times, Orange County Register and The Sacramento Bee. He also appears regularly on national television such as CBNC and Fox News, and locally on KTLA in Los Angeles.
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