This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Will Your Fund Manager Be Fired Next?

BOSTON ( TheStreet) -- Fidelity Investments fired Harry Lange as manager of the Fidelity Magellan (FMAGX) fund, once the firm's flagship and an industry bellwether.

Magellan's record since famed investor Peter Lynch oversaw the fund is marked by fund-manager turnover and a big run-off in assets as its performance has lagged its benchmark and that of its peers.

Magellan isn't alone in seeing shrinking assets as skittish investors are jumping in and out of funds this year. Redemptions from long-term mutual funds reached $32.5 billion in August after outflows of about $17.1 billion in July. "August marked the most severe mutual fund outflows since November 2008," Morningstar said.

The industry's actively managed funds, from which fund firms generate most of their revenue, have felt the lingering sting of losses from 2008's stock-market blowup and individual investors' move toward indexed exchange traded funds, said Todd Rosenbluth, a mutual fund industry analyst for Standard & Poor's Capital IQ.

ETFs took in $947 million in August, following July's huge $17.2 billion. U.S. ETFs have realized only a single month of outflows in the trailing 12 months, according to Morningstar.

As for manager turnover, Mark Coffelt, manager of the $40 million Empiric Core Equity Fund (EMCAX), said that "every manager is under the gun. It's been a horrible decade and a very difficult time to invest."

He said it's particularly tough on managers of the biggest funds because sometimes there's too much money and not enough attractive investments. "Look at what Warren Buffett said: 'Size is the anchor of performance.' Even he did better in the market when he didn't have as much capital."

The returns at Magellan have been bitterly disappointing to investors, many of whom expected it to continue to post the annual 29% returns seen under Lynch, who ran Magellan from 1977 through 1990.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs