Fidelity Magellan Shows Signs of Life
The onetime colossus is improving, but other choices, such as Fidelity New Millenium, look more appealing.
Fidelity Magellan (FMAGX), once the largest mutual fund in the land, is trying for what seems like the umpteenth time to right the ship. It may have finally found the right skipper in Jeff Feingold, who assumed the managerial reins in September 2011 and guided Magellan to market-beating gains in his first two calendar years at the helm.
So is it time to invest in Magellan, which, with $16 billion in assets, should be far easier to run than it was in 2000, when assets peaked at $110 billion? Our answer: No, mainly because we think other large-company funds are more attractive, starting with Fidelity New Millennium (FMILX), which we recently added to the Kiplinger 25.
Magellan today is far from the fund of yore. From 1977 to 1990, under Peter Lynch, it drew investors like bees to honey with an annualized return of 29.1%. That crushed Standard & Poor’s 500-stock index by a stunning 13.5 percentage points per year, on average. After Lynch retired, the fund performed well for a time, but results sagged dramatically with the arrival of a new century. In the 12 years from 2000 through 2011, Magellan trailed the S&P 500 eight times.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Maybe that’s why Feingold wasted little time putting his stamp on the fund when he took over what was then a $15 billion portfolio. In less than four months, Feingold says, he trimmed the number of stocks Magellan held from roughly 250 to about 225. And he steered the fund from one that held mostly fast-growing firms to one holding a more diversified mix of rapid growers (Google and Priceline, for instance). Plus, Feingold added what he calls quality growers, such as T.J. Maxx, and cheaply priced firms with improving results, such as airlines (American Airlines) and financial stocks (Bank of America). “I’m a diversified growth manager,” says Feingold. “I don’t make big sector bets.”
Given Feingold’s approach, investors shouldn’t bet on Magellan crushing the market. Feingold admits as much: “I want to outpace the S&P 500 by 1.5 to 2 percentage points per year.” In 2012 and 2013, the fund beat the index by 2.0 and 2.9 percentage points. In the first four months of 2014, the fund gained 0.9%, lagging the S&P by 1.7 points.
Feingold, 43, is a longtime Fidelity man. Since he joined the Boston-based behemoth in 1997, he has been a stock analyst, headed the firm’s research department, and managed five sector funds and four diversified funds, including Trend and Large Cap Growth. He’s no slouch: At every fund but one (the exception being Select Financial Services, which he ran from 2001 to 2004), Feingold outpaced the funds’ respective peer groups during his tenure.
Volatility concerns
The newsletter Fidelity Monitor & Insight rates Magellan “OK to Buy,” one notch below an outright “buy” rating. Editor John Bonnanzio says he wants to give Feingold a chance, but adds that he’s “a little uncomfortable” that Magellan has been about 20% more volatile than the S&P 500 over the past three years (a time frame that admittedly includes several months during which Feingold was not in charge).
One plus for Magellan is that it charges just 0.51% a year in fees. That’s among the lowest expense ratios for actively managed stock funds. The bargain price stems mainly from Fidelity’s philosophy (rare among sponsors) of basing some funds’ management fees on performance. Fees aside, we’d like to see another year or two of winning results before we would recommend Magellan.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
Original Medicare vs Medicare Advantage Quiz: Which is Right for You?Quiz Take this quick quiz to discover your "Medicare Personality Type" and learn whether you are a Traditionalist, or a Bundler.
-
Ask the Editor: Capital Gains and Tax PlanningAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on capital gains tax rates and end-of-year tax planning
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
UNH Sparks a 408-Point Surge for the Dow: Stock Market TodayThe best available data right now confirm both a slowing employment market and a December rate cut, a tension reflected at the equity index level.
-
Stocks Bounce Back With Tech-Led Gains: Stock Market TodayEarnings and guidance from tech stocks and an old-school industrial lifted all three main U.S. equity indexes back into positive territory.
-
Dow Slides 427 Points to Open December: Stock Market TodayThe final month of 2025 begins on a negative note after stocks ended November with a startling rally.
-
Stocks Extend Win Streak on Black Friday: Stock Market TodayThe main indexes notched wins in Friday's shortened session, with the blue-chip Dow Jones Industrial Average closing higher on the month.
-
Dow Adds 314 Points to Thanksgiving Rally: Stock Market TodayInvestors, traders and speculators enjoy the best Thanksgiving Week gains for the major stock market indexes in more than a decade.
-
Dow Gains 664 Points as Rate-Cut Hopes Rise: Stock Market TodayMarkets are pricing in higher odds for a December rate cut, fueling a major rally in stocks ahead of the Thanksgiving holiday.
-
Nasdaq Rises 2.7% as Musk Tweets TSLA Higher: Stock Market TodayMarkets follow through on Friday's reversal rally with even bigger moves on Monday.