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Fidelity No Longer Tops Best-Seller List

November 30, 1996|From Bloomberg Business News

BOSTON — Fidelity Investments' mutual funds have lost a bit of their edge with the public.

Fidelity managed four of America's top 10 selling funds in 1995 and seven in 1994, according to Financial Research Corp., a Chicago-based research group.

This year, through October, Fidelity had just two funds on the top 10 list: Fidelity Growth & Income, No. 3, and Fidelity Contrafund, No. 4.

Putnam Investments has replaced Fidelity as the dominant name on the best-seller list this year with three funds--New Opportunities, Growth & Income and Voyageur. America's best-selling fund was Vanguard Group's Index Trust-500 Portfolio, Financial Research reported.

Nine of the top 10 funds this year, as of Oct. 31, were diversified U.S. stock funds, with the Dow Jones industrial average hovering at the record 6,500 level.

Fidelity's woes can be traced directly to the poor relative performance of its flagship Magellan Fund, said David O'Leary, who heads Alpha Equity Research Inc., an institutional brokerage and research group in Portsmouth, N.H.

Magellan's poor performance meant it no longer enticed investors into other Fidelity funds, as it had for years.

Magellan was America's No. 1 fund in the U.S. in 1992 and '94, Financial Research reported.

"We're pleased that we're the only company that's represented on [Financial Research's] list of best-selling funds for each of the past six years," said Scott Beyerl, a Fidelity spokesman.

However, Magellan has seen more money leave its coffers than any of the more than 5,000 funds tracked by Financial Research. It suffered net redemptions totaling about $3 billion in the first 10 months of the year. The outflows continued in November, Fidelity said.

The strength of the 401(k) retirement plan business is also translating into huge inflows for Fidelity's cross-town rival, Putnam Investments. Putnam, a subsidiary of Marsh & McLennan Cos., has three of the nation's top-selling funds, up from just one last year.

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