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Fidelity fund farewell
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February 18, 2000: 7:46 a.m. ET
Bertelson to succeed Sullivan as latter departs to establish own hedge fund
By Staff Writer Jennifer Karchmer
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NEW YORK (CNNfn) - Erin Sullivan, former manager of the Fidelity Aggressive Growth Fund, is seeking greener pastures by forming her own hedge fund, after almost nine years with the nation's largest mutual fund company.
Also in this column: Vanguard introduces a new international fund.
On Monday, the 29-year-old Sullivan announced her resignation from Fidelity Investments to "become an entrepreneur," she said in a prepared statement.
Since 1997, Sullivan managed the $17.2 billion Fidelity Aggressive Growth Fund (FDEGX), which performed impressively under her tenure, according to Morningstar. In 1999, the fund garnered a 103 percent return, while year to date, the fund is up 9.42 percent as of Feb. 16. For the month of January, the fund was down 0.3 percent.
So should shareholders of the Fidelity Aggressive Growth Fund be quaking in their boots because of the departure?
Morningstar analyst Emily Hall said Fidelity is a top shop prepared to step up to the plate and continue running the portfolio on a par with its already strong lineup.
"Fidelity's bench is very deep," Hall said. "It has a big analyst staff and support."
Fidelity appointed Robert Bertelson to succeed Sullivan as manager of the fund. Bertelson, with Fidelity since 1991, most recently managed the $11 billion Fidelity OTC Portfolio (FOCPX).
Click here for other recent Fidelity fund manager reappointments.
But Hall added, "When you have a manager change, you always want to keep a close eye on the fund going forward to make sure the fund is behaving in a way you're comfortable with."
The fund invests in large-cap growth stocks in the technology-driven market, including Internet infrastructure, fiber-channel storage, biotechnology and wireless-data firms.
Sullivan joined Fidelity as a health care and retail analyst after graduating from Harvard in 1991. During her term at Fidelity, she managed the Fidelity Select Retail Fund (FSRPX) and then the Select Software & Computer Services Fund (FSCSX) before taking over Fidelity Emerging Growth, later renamed Aggressive Growth.
Sullivan declined further comment on pursing her hedge fund career, according to her spokeswoman, Louise Feinsot.
Vanguard expands its international mix
Vanguard will add a new international fund to its lineup for investors looking to diversify their overseas exposure.
Vanguard is awaiting approval from the Securities and Exchange Commission to introduce the Vanguard Developed Foreign Markets Stock Index Fund, which will have both European and Pacific stock exposure.
Instead of investing in stocks directly, the fund of funds, as it is called, will invest in two existing Vanguard funds: the Vanguard European Stock Index Fund (VEURX) and the Vanguard Pacific Stock Index Fund (VPACX). Both were introduced in 1990.
The new fund's annual expenses are expected to be 0.34%; the minimum investment will be $3,000 for standard accounts and $1,000 for IRAs.
Gus Sauter, who oversees the management of $220 billion in equity assets at Vanguard, says the new offering is in response to shareholder interest in both Pacific and European stocks.
"A lot of investors want to diversity their foreign investments and some have requested that we simplify the process," he said.
The $5.6 billion Vanguard European Stock Index Fund, which uses the Morgan Stanley Capital International Europe Index as a benchmark, returned 16.7 percent for 1999.
The $2.5 billion Vanguard Pacific Stock Index Fund, which the Morgan Stanley Capital International Pacific Free Index as a benchmark, was up 57.1 percent for 1999.
Other international fund offerings by Vanguard include: the Vanguard Emerging Markets Stock Index Fund (VEIEX) and the Vanguard Total International Stock Index Fund (VGTSX). 
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