Manager Will Danoff has an excellent record identifying underestimated companies. His success has attracted a lot of investor money. By Katy Marquardt, Staff Writer January 4, 2007 Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds. Weighing in at $69 billion, Fidelity Contrafund is the biggest actively managed no-load fund. In charge is Will Danoff, a feisty, opinionated manager who invests wherever he sees fit. Since he took over in 1990, Contrafund has gained 16% annualized, beating Standard & Poor's 500-stock index by an average of four percentage points per year. Compared with rivals that invest in large, rapidly growing companies, the fund ranks in the top 10% of its category over the past 15 years. Despite its name, Contrafund, which closed to new clients last April, does not focus on out-of-favor stocks. Rather, Danoff buys growth stocks that he thinks others are underestimating. Recently, his biggest positions included Apple Computer and Google -- hardly laggards. The fund also has 16% of its assets invested in midsize companies and 24% in foreign stocks, including recent top-ten positions in Mexican wireless-phone company America Movil and Swiss pharmaceutical firm Roche. Danoff, who also runs Fidelity Advisor New Insights, a $7.6 billion load fund that is closed to new investors, is drawn to companies run by visionary executives. In fact, he likes to pay visits and chat on the phone with these executives -- sometimes, he'll have contact with as many as five companies in a day. Not surprisingly, Danoff says the secret to his success is keeping in close contact with the companies he invests in. Considering that the fund holds more than 400 names, that's a big job. Contrafund held about $300 million when Danoff took the helm, $15 billion at the end of 1995, and $40 billion at the end of 2000. Between Contrafund and Advisor New Insights, Danoff currently manages nearly $77 billion. He has a great record, but given Contra's immensity, we suggest that shareholders HOLD their positions but not add to them. FUND FACTS Fidelity Contrafund (FCNTX) Assets: $68.8 billion Manager (year started): Will Danoff (1990) Returns (vs. S&P 500)* One year: 9.4% (13.8%) Three years annualized: 14.4% (10.5%) Five years annualized: 11.7% (5.6%) Ten years annualized: 11.0% (8.4%) Expense ratio: 0.88% Portfolio turnover: 60% Minimum investment: closed Phone: 800-544-8544 Web site: www.fidelity.com *Returns to January 3 Fund Fact sources: Standard & Poor's, Morningstar View updated data for this fund and compare the performance of the 20 biggest no-load stock funds. Go to A Close Look at the 20 Biggest No-Load Stock Funds.