Fidelity Continued to Lighten Its Tech Load in the Fourth Quarter

As tech stocks folded in the fourth quarter, Fidelity fund managers weren't buying.

That's the upshot from the Boston fund behemoth's latest Mutual Fund Guide, released Wednesday. The guide lists each fund's top holdings and sector weightings through the end of last year. Judging from its data, most Fidelity managers -- generally known for their acumen at picking tech stocks -- let their funds' tech weightings drop either through inaction amid the decline in tech stocks or by selling.

In December, when the tech-laden Nasdaq Composite Index dropped nearly 4.9%, diversified Fidelity funds with a dropping tech weighing outnumbered gainers by a ratio of 4-to-1. Among the funds that lightened their tech load were the $93.1 billion (FMAGX Quote - Cramer on FMAGX - Stock Picks)Fidelity Magellan fund, the nation's largest fund, where tech stocks dropped from 21.5% to 19.5%, and the $40 billion (FGRIX Quote - Cramer on FGRIX - Stock Picks)Fidelity Growth & Income fund, where the tech stake fell from 19.2% to 15.6%.

For comparison, tech stocks comprised 21.9% of the S&P 500, a benchmark for many large-cap funds like these.

Fidelity managers, who may indeed be buying tech stocks today, don't discuss stocks with the media, but this cooling to tech is part of a pattern. The Nasdaq fell more than 30% in the fourth quarter and, given their falling tech weightings, it doesn't look as if many Fidelity fund managers have been buying in the sector. Investors in Fidelity funds might be cheered to have slackening exposure to the battered sector, but for tech fans it's dreary news. Fidelity's reluctance to buy in the sector implies a negative view of its prospects.

Low Fidelity Fido fund managers' tech weightings dropped -- sometimes sharply -- in the fourth quarter.
Five Biggest Fidelity Funds
	Dec. 31	Sept. 30
(FMAGX Quote - Cramer on FMAGX - Stock Picks)Magellan	19.3%	29.2%
(FGRIX Quote - Cramer on FGRIX - Stock Picks)Growth & Income	15.6	24.4
(FDGRX Quote - Cramer on FDGRX - Stock Picks)Growth Company	31.8	41.9
(FBGRX Quote - Cramer on FBGRX - Stock Picks)Blue Chip Growth	31	39.4
(FEQIX Quote - Cramer on FEQIX - Stock Picks)Equity-Income	27.2	28
Five Funds With Notable Drops
	Dec. 31	Sept. 30
(FOCPX Quote - Cramer on FOCPX - Stock Picks)OTC	59.7	78.3
(FDEGX Quote - Cramer on FDEGX - Stock Picks)Aggressive Growth	50.7	55.6
(FLCSX Quote - Cramer on FLCSX - Stock Picks)Large Cap Stock	23.6	34.7
(FFIDX Quote - Cramer on FFIDX - Stock Picks)Fidelity	21.5	28
(FGRTX Quote - Cramer on FGRTX - Stock Picks)Growth & Income II	11.5	18.9
Source: Fidelity.

Market observers obsess over Fidelity's moves, because with more than $600 billion in mutual funds, its fund managers' whims can move stock prices in a hurry. They can send prices south just as quickly if they sour on a sector.

Because the firm discloses only funds' top-10 holdings, it's difficult to discern what tech stocks have fallen from favor with managers. Data-storage titan EMC(EMC Quote - Cramer on EMC - Stock Picks) and server shop Sun Microsystems(SUNW Quote - Cramer on SUNW - Stock Picks) both fell out of Magellan's top-10 holdings during the fourth quarter.

The (FFTYX Quote - Cramer on FFTYX - Stock Picks)Fidelity Fifty fund, where manager John Muresianu has a relatively free hand, still has a 0% tech weighting. He removed his tech positions last spring after having almost 50% of the fund in tech stocks during 1999, his first year at the helm.