This once-storied fund has been a mediocre performer for years. Can Jeffrey Feingold right the ship? By Nellie S. Huang, Senior Associate Editor September 14, 2011 Who is Jeffrey Feingold? Now that he has assumed the reins of Fidelity Magellan (symbol FMAGX), is it time to again invest in this once-storied fund?SEE ALSO: Our Special Report on How to Be a Better Investor Fidelity announced on September 13 that Feingold was replacing Harry Lange, who had run Magellan since 2005. Lange became the latest in a series of managers who had failed to tame the beast Magellan had become following the spectacular returns it generated under Peter Lynch between 1977 and 1990. Even after Lynch retired, the fund grew briskly in the 1990s, when it became a standard option in 401(k) plans across the country. In early 2000, its assets peaked at $100 billion. Today, thanks to poor performance and investor withdrawals, the fund holds just $17 billion. Before moving to Magellan, Lange had won over fans during his nine-year stint at Fidelity Capital Appreciation (FDCAX). From March 1996 to October 2005, a $10,000 investment in Capital Appreciation grew to $24,000 (for a 9.7% annualized return). But Lange’s performance at Capital Appreciation failed to translate well to Magellan. Over the past five years through September 13, Magellan lagged 96% of all funds that focus on the stocks of large, fast-growing companies. One issue may have been size: Capital Appreciation had about $6 billion in assets when Lange left to take over Magellan, which was then a $51 billion fund. Advertisement Enter Feingold. He joined Fidelity in 1997 as a research analyst and went on to manage several sector funds, including funds specializing in consumer finance, financial services and transportation. Feingold, who’s about 40, currently runs four diversified large-capitalization funds -- Fidelity Advisor Large Cap Growth (FLNAX), Advisor Strategic Growth (FTQAX), Large Cap Growth (FSLGX) and Trend (FTRNX. All told, the funds hold some $1.3 billion in assets. Trend, with $1 billion, is the biggest. Feingold seems to run them all as one fund. They’re shadows of each other -- the top ten holdings in each fund are practically the same. Apple is the top holding (about 7% of assets in each fund), and each fund views its benchmark as the Russell 1000 Growth index. Feingold doesn’t have a long record at any of the funds. His longest stint, almost five years, is at Trend. From February 1, 2007, the day he took over Trend, through September 13 of this year, the fund returned an annualized 1.9%, compared with an annualized loss of 0.8% for the Russell 1000 Growth. Over that period, Standard & Poor’s 500-stock index dropped 2.4% annualized. In truth, neither the Russell nor the S&P index is a perfect benchmark for Trend, which Feingold continues to manage, at least for the time being. Although Feingold on average has kept Trend in large-cap-growth territory, he gooses returns with some small and mid-cap stocks. Among the fund’s holdings, at last report, were Schiff Nutrition International (WNI), with a market value of $277million; iRobot (IRBT, $723 million); and Herbalife (HLF, $6.6 billion). According to Morningstar, Trend has one-fourth of its assets in mid-cap stocks and 10% in small and microcap stocks. Advertisement But as skipper of the much larger Magellan, Feingold may find it difficult to make sizable bets in smaller companies to make an impact. This is a problem that earlier Magellan managers, including Jeff Vinik (1992-1996) and Bob Stansky (1996-2005), faced, and it will likely be Feingold’s biggest challenge. Magellan is 15 times larger than the funds he runs now. Magellan has 240 holdings -- similar to the 230 or so holdings in each of Feingold’s current portfolios -- but each of Magellan’s stocks represents a much larger percentage of a company’s outstanding shares than a holding in Trend does. Contrafund (FCNTX), another large-cap growth fund in the Fidelity stable, is a member of the Kiplinger 25, the list of our favorite no-load mutual funds. In terms of size, Trend has the advantage over the massive Contra, which has $74 billion in assets. Trend, with an annual expense ratio of 0.83%, is also slightly cheaper than Contra, which charges 0.91%. In the end, Contra’s biggest advantage is its manager, Will Danoff, who has delivered terrific returns during his 21-year-long tenure at the fund. We continue to recommend Contra and will watch Feingold carefully over the next year or two to determine whether Magellan warrants our endorsement.