Fidelity funds swell by $5.8b
April sales gain is biggest in 10 years
Fidelity Investments pulled in $5.8 billion in April, its biggest monthly sales tally in a decade, as investors rushed to put money into four funds that were closing, according to Financial Research Corp.
Fidelity's sales rose 53 percent from $3.8 billion in March. The four funds, including Fidelity's largest, the $67.5 billion Contrafund, attracted a combined $2.3 billion before they were shut to new investors on April 28, according to a report yesterday by Boston-based Financial Research.
``People wanted to be in these funds before" they closed, said John Bonnanzio, group editor at Fidelity Insights, an independent newsletter in Wellesley.
Boston-based Fidelity shut the fast-selling funds before the surge of cash made it hard for managers to find promising investments and returns suffered. Companies including Vanguard Group and OppenheimerFunds have done the same this year.
Fidelity, the world's largest fund company, has struggled to attract new investments as some returns, including those at onetime flagship Magellan fund, trailed their benchmarks. The company reassigned Abigail Johnson, the daughter of chairman Edward C. Johnson III, as head of investment management last May and hired new managers and research analysts to improve performance.
Fidelity oversaw $1.3 trillion as of Jan. 31.
Fidelity Magellan, now the firm's second-largest fund, gave up $96.3 million in potential fees because the three-year return trailed the Standard & Poor's 500 index, according to its annual report filed yesterday with the Securities and Exchange Commission. The fund's management fees totaled $205 million in the year ended in March, a 24 percent drop from $270 million a year earlier.
April was Fidelity's best sales month since it took in $6.1 billion in January 1996, said Christopher Sporcic, an analyst with Financial Research.
Fidelity finished second in the industry in stock and bond fund sales last month, with seven funds placing among the 20 biggest sellers. Fidelity last ranked as high as second in September 2003.
Fidelity's public relations department didn't immediately return a phone call seeking comment.
Contrafund, managed by Will Danoff, took in $661 million last month and $3 billion this year. The $7.1 billion Fidelity Advisor New Insights, also run by Danoff, added $921 million in April and $2.5 billion so far in 2006.
Investors poured into two other Fidelity funds before they closed. Mid-Cap Stock had $602 million in sales last month and Growth Company $255 million, Financial Research data show.
The four funds still accept money from current investors.
Overall, the industry had $31.5 billion in sales of so-called long-term funds, Financial Research said.
American Funds, a unit of Capital Group Cos., led all companies with $6.7 billion in sales. San Francisco-based Barclays Global Investors, the number one manager of exchange-traded funds, took in $3 billion. Valley Forge, Pa.-based Vanguard Group, the second-biggest US mutual fund manager, collected $2.8 billion.
