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Fidelity gets conservative
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June 10, 1999: 2:30 p.m. ET
Fund manager trims technology, health stocks in favor of energy, finance
By Staff Writer Martine Costello
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NEW YORK (CNNfn) - Magellan Fund and other top names at Fidelity Investments have trimmed their technology and health holdings in favor of more conservative stakes in energy and financial stocks, according to data released Thursday.
The asset allocation figures for Fidelity funds through April 30 show that the Boston-based fund manager is continuing to move away from high-flying technology stocks that helped push performance figures to the top of the charts over the past year.
"Fidelity has been slightly more conservative over the past couple of months," said Donald Dion, editor of the newsletter Fidelity Independent Advisor.
Dion thinks the approach helped the funds weather the downturn earlier this year, particularly in May when mutual fund returns suffered.
Scott Cooley, an analyst at fund tracker Morningstar, said Fidelity managers may have started to think technology shares had gotten so pricey that any news at all would have a negative impact. With more risk, they didn't want to make such a big bet in the sector.
"Technology shares were trading so richly," Cooley said.
The Fidelity guide also shows that asset levels of some of the bigger funds -- including Magellan, Contra Fund, Growth & Income, and Fidelity Fifty -- have dropped between April 30 and May 31, the data showed.
The closely-watched Magellan Fund trimmed technology holdings to 19.3 percent as of April 30 from 20.8 percent as of March 31, and cut health holdings to 9.5 percent from 10.3 percent.
The fund, headed by Robert Stansky, boosted financial stocks to 13.6 percent in April from 12.8 percent in March, and energy to 6.6 percent from 5.9 percent in the same time period.
Magellan's assets dropped to $91.3 billion as of May 31 from $93.6 billion as of April 30. The fund was up 6.80 percent year to date as of May 31.
Another big name, Contra Fund, dropped technology issues to 15.3 percent as of April 30 from 18.9 percent as of March 31, and shaved health to 4.9 percent from 6.0 percent in the same time. Contra Fund also raised energy to 4.7 percent at the end of April from 1.7 percent a month earlier, and finance to 8.3 percent from 7.5 percent.
Contra Fund had $41.3 billion in assets as of May 31, compared with $42.1 billion as of April 31. The fund was up 5.77 percent year to date as of May 31.
Growth & Income Fund lowered technology holdings to 13.6 percent as of April 30 from 15.1 percent as of March 31, and cut health to 13.9 percent from 15.5 percent. It boosted its financial stock holdings to 17.3 percent from 16.5 percent, and increased energy to 5.1 percent from 4.2 percent.
Growth & Income's assets were $48.4 billion as of May 31, compared with $49.9 billion as of April 30. The fund was up 1.81 percent for the year through May 31.
In one of the most dramatic examples of the switch, Fidelity Fifty Fund slashed technology holdings to 36.9 percent as of April 30 from 45.6 percent as of March 31, the company said. Fidelity Fifty raised finance holdings to 18.2 percent from 14.9 percent and basic industries to 4.3 percent from 1.6 percent. It reduced health to 10.5 percent from 11 percent.
Fidelity Fifty was up 21.41 percent year to date as of May 31, with $490 million in assets. Assets were $553.2 million on April 30.
The Fidelity funds took different approaches on utilities, however. Magellan and Contra Fund lowered stakes in utilities issues, while Growth & Income, Fidelity Fifty and New Millennium all boosted that sector. But all of the funds lowered their stakes in retail. 
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