Magellan Fund Raises Stock, Trims Cash

Fidelity Investments’ Magellan Fund raised its stock holdings at the end of February and cut cash and bond holdings, according to the monthly Fidelity Mutual Fund Guide released Wednesday.

The nation’s largest mutual fund company also said it had a negative return of 0.56% for the first three months this year.

The Boston-based investment firm said it raised its stock holdings to 95.5% of assets in February--the most recent month for which figures are available--from 93.5% at the end of January.

At the same time, it cut its holdings in bonds to zero at the end of February from 0.8% a month earlier.

Magellan also lowered its holdings in cash to 4.5% of assets from 5.7%.

The fund said it had a negative return of 0.56% from January through March this year, under-performing the 2.68% gain for the Standard & Poor’s 500 composite index over the same period.

Since he took over Magellan in June, fund manager Robert Stansky has gradually shifted the fund into stocks and out of its massive investment in bonds, which hurt the fund’s returns over the last year, when the stock market recorded strong gains.

Total assets in the massive fund fell to $51.4 billion at the end of March from $53.8 billion at the end of February, Fidelity said.

The company said it trimmed its holdings in technology stocks to 13.8% from 14.6%, cut energy shares to 13.1% from 14.6% and raised its holdings of financial stocks to 10.5% from 9.6%.

Assets in durables slipped to 8.8% from 8.9%, industrial machinery and equipment rose to 7.9% from 7.7%, and health-care shares rose to 7.3% from 6.3%.

Magellan said it added Merck, Exxon and American International Group to its top 10 holdings at the end of February.