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Fidelity falls behind
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September 27, 2000: 11:23 a.m. ET
Lagging performance slows investor enthusiasm for Fidelity funds
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NEW YORK (CNNfn) - As performance has slipped this year at Fidelity Investments, investors have voted with their feet, sapping sales for the mutual fund giant.
While Fidelity remains far and away the largest retail fund group with $650 billion under management, its $4 billion in inflows year-to-date through July make it just the 10th best selling fund group, according to fund tracker Financial Research Corp.
Worse yet for Boston-based Fidelity, inflows are down a precipitous 77 percent compared to the first seven months of 1999. July alone saw outflows of $2.9 billion. Rival Janus, meanwhile, has attracted $36.4 billion in new cash, a jump of 80 percent over 1999.
 The culprit appears to be anemic performance at Fidelity's largest funds. Its flagship Magellan fund has steered investors to a 0.2 percent loss this year through Sept. 26, according to fund tracker Morningstar, while Contrafund is down 1.54 percent, worse than two-thirds of its peers, and Fidelity fund is off 2.99 percent, worse than 77 percent of similar funds..
Investors have continued to pour into Fidelity growth funds heavily invested in technology stocks, but they have not received much bang for the buck. Aggressive Growth, which lost manager Erin Sullivan earlier this year to a hedge fund, has seen healthy inflows of $6.2 billion but is up just 1.05 percent while OTC, with $2.6 billion in new money, has gained 3.91 percent, worse than three-quarters of its peers.
All told, Fidelity stock and bond funds have outperformed just 51 percent of their peers this year, according to Morningstar data provided to the Wall Street Journal. That's down from 60 percent in 1999 and 67 percent in 1998. 
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Fidelity.com
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