A mystery! Who doesn’t love a good mystery?
Magellan’s journey from icon to afterthought may be the starkest example of the eroding trust in professional stockpickers. Feingold’s record is strong: Under his tenure, which began in September 2011, Magellan has bested the S&P 500 index every full year but 2016. Annualized gains have averaged more than 15 percent, currently putting the fund just a bit ahead of the index. The fund has outdone more than 90 percent of funds with a similar investing style over the past one, three, and five years.
Fidelity Magellan was a $110 billion fund in 1997, so big it had to close itself to new investors. And then a funny thing happened – it saw net client outflows every year for the next 18 years. It’s now a $17.5 billion fund, and that’s after beating the market in recent years.
Here’s a quote from the current manager, who’s done 15.3% a year since taking over in 2011 vs the S&P 500’s 15.1%:
“If we do our job well and generate alpha, hopefully that is what will matter to shareholders.”
Nope. That’s not true at all.
Here’s how it works now, and I’m generalizing so try not to have a conniption…
“I need help.”
Investors heading into retirement look at what they’ve been doing with their money – whether self-directed or working with a wirehouse brokerage firm – and decide it’s time for some professional advice. They are somewhere between the ages of 45 and 65 when this takes place.