Magellan Fund Almost 90% Stocks Again

Fidelity Investments’ flagship Magellan Fund is almost back to normal. The world’s biggest mutual fund had almost 90% of its assets invested in equities as of Oct. 31 and 8.7% of its assets in bonds, according to a report released by Fidelity. Magellan had 9.8% of its assets in bonds as of Sept. 30. When Robert Stansky officially assumed control of the $55.8-billion fund in June from former manager Jeffrey Vinik, the fund had 19.3% of its assets in bonds, mostly U.S. Treasuries. Vinik made a big bet on bonds in a period when stocks were rallying and the U.S. bond market was floundering. The result: Magellan badly lagged other stock funds and the benchmark Standard & Poor’s 500-stock index in the first half of 1996. Its poor performance resulted in a cut in the management fee charged on the fund by more than a third, Fidelity said.