Ford to drop Fidelity Magellan from 401(k)
Company eliminates world's largest actively managed mutual fund from workers' retirement plan to 'simplify options.'
NEW YORK (CNNMoney.com) -- Ford is nixing one of Fidelity Investments' largest and best-known mutual funds from the investment options it offers to employees, the company said Tuesday.
The auto maker sent notices to workers that it would no longer allow employees to invest their retirement funds in Fidelity's Magellan Fund, along with three funds from other companies.
"Periodically we work with third-party consultants to review our offerings and try to reduce redundancy," a Ford spokeswoman told CNNMoney.com. "We're trying to simplify the line-up."
Ford won't be adding any funds to replace the four that were dropped.
The other funds eliminated are Domini Social Investments' Social Equity Fund; Morgan Stanley's (Charts) Institutional Fund Inc. Global Value Equity Portfolio; and Vanguard Group's Explorer Fund (Admiral Class).
Ford will now offer 30 mutual funds managed by 11 companies.
The move comes as Magellan has turned in poor performance in recent years, after becoming the largest mutual fund in the world under Peter Lynch. Lynch retired in 1990, and the fund is now helmed by Harry Lange, who joined in 2005 after running Fidelity's successful Capital Appreciation fund.