Magellan Fund - Assets Under Management

Assets Under Management

Fidelity earns its income, like most mutual funds, from fees charged on its assets under management. From the fund’s inception in 1963 through 1977 Magellan grew to $20 million in AUM. The $20 million fund Peter Lynch inherited grew to $13 billion in AUM during his tenure. During Morris Smith's tenure, AUM grew from $13 billion to $20 billion. During Jeffrey Vinik's it grew to $50 billion. Bob Stansky certainly experienced the most volatility with respect to AUM during his time with Magellan. In July 1996, his first month as manager, more than $3.5 billion was taken out of the fund as investors redeemed their shares and the portfolio experienced setbacks. Stansky quickly moved out of bonds and into stocks to stop the assets from flowing out. On September 30, 1997 Fidelity decided to close the Magellan Fund to new investors. They believed that the size of the fund was beginning to make it difficult to beat the market.

By the end of the century the Fidelity Magellan Fund had well over $100 billion in assets under management. For quite some time it was the single largest mutual fund in the world. In April 2000, Vanguard’s S&P 500 index fund displaced Magellan as the largest mutual fund in the world. By the time Stansky retired in 2005 the assets under management for Magellan were back down to $52.5 billion. Harry Lange took over Magellan and promptly changed the portfolio to reflect his view on the market. Today about 25 per cent of Magellan is invested in companies based outside the US. In May 2006, Magellan made a capital gains distribution to shareholders of $22.11 representing roughly 18% of assets. As of 12/31/08 the total AUM for the Magellan Fund stands at $19 billion. Lange has said that he believes Magellan can handle more assets. After being closed for over a decade, on January 14, 2008, Fidelity announced that the fund would be re-opened to new investors.

On September 13, 2011, Fidelity named Jeffrey S. Feingold, manager of Fidelity Trend Fund, as the next manager of Fidelity Magellan Fund. Harry Lange presided over the largest drop in assets under management, as a percentage, as well as in absolute dollars, of Magellan.