After years of chronic underperformance, Fidelity Investments dumped the manager of its flagship Magellan fund.
The mutual-fund giant announced that Jeffrey S. Feingold will succeed Harry Lange at the helm of the perpetually troubled fund.
Magellan was one of the best-known and most successful funds in the 1980s under legendary manager Peter Lynch. But the fund has run through a string of poorly performing skippers since Lynch's retirement in 1991, and Lange ranked as one of the worst.
During his nearly six years at the helm, Magellan was in the bottom 10% of large-cap growth funds, according to fund tracker Morningstar Inc. The fund fell 7.2% in that time, compared with a 7% gain for the Standard & Poor's 500 index, according to data from Bloomberg.
Magellan was once a gleaming five-star fund, but Morningstar dropped it to an ignominious one-star rating in 2008.
Magellan's performance "went from middling to terrible" under Lange, said Morningstar analyst Christopher Davis.
Lange was unavailable for comment, according to a Fidelity spokesman.
Lange focused on foreign growth stocks, but many of his holdings were in stricken developed markets such as Europe rather than in better-performing emerging markets such as China, said Jim Lowell, editor of the Fidelity Investor newsletter.
Lange was plagued by a series of ill-timed bets, including a dive into financial stocks in mid-2008 shortly before the global financial crisis enveloped Wall Street, Davis said. He also bet heavily on Finland's Nokia Corp., which sank from $41 in late 2007 to less than $6 today.
Magellan's assets have shriveled to about $17 billion recently from $55 billion when Lange took over, Davis said. The peak was $110 billion in early 2000.
Feingold has a solid track record, including his management of the Fidelity Trend Fund, which he will continue. But that's a much smaller fund than Magellan, and like others before him, Feingold must prove that he can thrive at a bigger and higher-profile fund, experts said.