Magellan proves biggest is still better than the index.
Fidelity Magellan, the $85 billion Goliath of mutual funds, has squished the indexing Davids once again.
Magellan outgunned the
during the first quarter, returning 7.4% for the three months ended March 31, according to
. The S&P 500, by comparison, appreciated 5% during that time period, as did the
Vanguard Index: 500 fund.
While active fund managers have had a hair-pulling time trying to beat the S&P in recent years, Magellan has bucked that trend lately.
The fund has been on a tear under the management of Bob Stansky, who took over the reins in 1996. After years of lagging the S&P 500 benchmark -- which made many fund watchers pronounce Magellan dead, suffocated by its own weight -- Stansky managed to beat the index in 1998. He did so by paring the fund's holdings to just 334 stocks and pumping up its allocation in technology.
But the simple housecleaning that Stansky did is no small feat. After all, at $85 billion, Magellan's assets equal about 5% of the proposed U.S. budget for next year. Try stuffing that into your 300 favorite names.
At the quarter's close, Ryan Jacob's storied
Internet fund still sat atop the heap of all funds, according to Morningstar, with a 93.1% return. Don't even think about doing the math on an annualized basis -- the Internet stocks are far too volatile for that -- but the fund's first-quarter return is already about half of its total, 196.1% return for all of 1998.
Other first-quarter winners for 1999 were the
funds, which managed to snatch three of the top five spots for all funds during the last three months and five of the top 20. The gains continue Van Wagoner's comeback-kid saga that
Here are the top 20 performers for the first quarter: