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Magellan shuffles Top 10
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April 17, 2000: 1:03 p.m. ET
GE becomes Fidelity fund's top holding, bumping Microsoft; Time Warner added
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NEW YORK (CNNfn) - Fidelity Magellan, one of the nation's largest mutual funds, boosted its technology allocation to 35.1 percent at the end of March, up from 30.5 percent at the end of January, and changed around some of the fund's top holdings, the mutual fund company reported Monday.
The recently beleaguered Microsoft (MSFT: Research, Estimates), which a federal judge ruled this month had violated antitrust laws, was bumped from its perch by fund manager Robert Stansky as the No. 1 holding by General Electric (GE: Research, Estimates).
Time Warner (TWX: Research, Estimates), the parent company of CNNfn, and Intel Corp. (INTC: Research, Estimates) were added to the Top 10 list, replacing retailer Wal-Mart Stores Inc. (WMT: Research, Estimates) and Lucent Technologies Inc. (LU: Research, Estimates).
 The moves are the result of first-quarter performances in the technology sector and individual stocks as much as anything else, said Eric Kobren, executive editor of newsletter Fidelity Insight, noting that the technology-heavy Nasdaq rose more than 12 percent in the first quarter compared with a better than 2 percent gain on the S&P 500.
"Some of it reflects market action. Stansky is an active manager," he said.
Wal-Mart's share price, for instance, lost 18 percent in the first quarter, as did Lucent's, and both may have fallen from the top 10 just by virtue of the decline in value, said Morningstar analyst Scott Cooley. Intel and Time Warner both rose significantly.
As for the battle to be No. 1, Microsoft stock, which has suffered since an April 3 antitrust ruling, had already lost 8.99 percent by the end of March, Cooley said. That compared with GE's 0.87 percent gain.
The increase in the fund's technology weighting -- which still represents the largest sector holding -- is in keeping with Stansky's efforts to keep the percent of tech holdings close to the S&P 500 index's technology weighting, said David Pittelli, senior analyst at fidelityinvestor.com. That weighting rose to 33.5 percent at the end of March up from 29.2 percent at the end of January,
Style change to boot
In addition to the changes in the fund's holdings, Magellan's investment style has changed to large-cap value from large-cap blend. But, Cooley said, "It doesn't mean very much," noting that the current portfolio is being compared to the last total portfolio Fidelity released, which was at the end of September last year.
"The valuations of the overall market have gone up," he said. "And because the market as a whole has gotten a lot more growth-oriented, it makes Magellan look more (like a) value (fund) than it really is."
The fund still has a modest growth bias, given Stansky's technology weighting, Cooley said. "There's no value bet in the portfolio."
Holdings reduced, profits pocketed?
Kobren noted that Magellan's holdings were reduced to 377 from 422, a move he applauded. "It's more of a stock-picking market. But it's still a very diversified fund."
A desire to cash in on some profits also may account for the decline. "Stansky definitely dipped down and bought some midcaps in the fourth quarter. And it looks like he took some profits in the first quarter," Cooley said, adding that with the recent popularity of small- and midcap stocks, "there was good opportunity to trim some of his holdings."
Bumped for the first time a few weeks ago from its position as the largest mutual by the Vanguard 500 Index Fund, Magellan took a big hit last week in line with the selloff on Wall Street, falling 12.34 percent for the week -- 7.42 percent of it on Friday alone. It closed at $126.49 a share. The fund company said Magellan's assets totaled $109.073 billion at the end of March. 
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