SAVVY CONFIDENTIAL / A Briefing for Investors
George Vanderheiden, the dean of Fidelity Investments’ portfolio managers, is stepping down after 29 years at the world’s largest fund company.
His retirement sets into motion a chain-reaction of changes at several of Fidelity’s largest portfolios, which collectively manage well over $100 billion in assets.
Among the funds affected are the two Vanderheiden directly manages--the $25-billion Fidelity Advisor Growth Opportunities and the $7.2-billion Destiny I--as well as Fidelity Puritan, Equity-Income and Equity-Income II.
Growth Opportunities and Destiny I, both large value stock funds, are expected to become slightly more growth-oriented.
Vanderheiden, 54, is considered among the most influential stock pickers of his generation. His Destiny I, for instance, is the second-best performing large value fund over the last 10 years, according to Morningstar Inc. Growth Opportunities ranks fifth.
Yet, his disciplined style has kept him under-weighted in the booming tech sector, which is a major reason both funds have lagged the benchmark S&P; each of the last five years.
“My retirement is completely voluntary, and my decision to leave was my own,” Vanderheiden said. “I’ve had rough spots off and on and this is just another. If I stayed, I’d sail through it. It was time to do something else.”
“Overall, there aren’t too many guys who have beaten the S&P; over the last 20 years, and he made lots of money for investors and mentored so many people at Fidelity,” Eric Kobren, executive editor of the independent Fidelity Insight newsletter, told Bloomberg News.
Morningstar analyst Scott Cooley notes that Vanderheiden had a better long-term record than legendary fund manager Michael Price, and he has posted 10- and 15-year numbers comparable to those of Bill Miller of Legg Mason Value, perhaps today’s biggest star. “And you hear a ton about them,” Cooley said, adding that Vanderheiden was also overshadowed within his own company by Peter Lynch, former manager of Fidelity Magellan.
Replacing Vanderheiden at Growth Opportunities will be Bettina Doulton, current manager of Fidelity Equity-Income II and the equity portion of Fidelity Puritan.
Meanwhile, Karen Firestone, manager of Fidelity Large Cap Stock Fund, will take over Vanderheiden’s other fund, Destiny I. Firestone is considered a more growth-oriented manager than Vanderheiden.
