Advertisement
Kip 25

Fidelity Contrafund: Big Companies, Huge Fund

Manager Will Danoff has an excellent record identifying underestimated companies. His success has attracted a lot of investor money.

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.

Advertisement - Article continues below

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.

Advertisement - Article continues below

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.

Advertisement
Advertisement

Most Popular

Turning 60 in 2020? Expect Lower Social Security Benefits
Coronavirus and Your Money

Turning 60 in 2020? Expect Lower Social Security Benefits

When you file for Social Security, the amount you receive may be lower.
July 30, 2020
These 2 Words Could Send Your Retirement Money to the Wrong Beneficiary
estate planning

These 2 Words Could Send Your Retirement Money to the Wrong Beneficiary

"Per stirpes" vs. "per capita." Making the wrong choice could cause an estate planning disaster.
July 30, 2020
Second Stimulus Check Update: HEALS Act vs. CARES Act
taxes

Second Stimulus Check Update: HEALS Act vs. CARES Act

When compared to first-round payments, the new Republican stimulus check proposal expands and protects payments for some people, but it shuts the door…
July 29, 2020

Recommended

The 7 Best Funds for Beginners
mutual funds

The 7 Best Funds for Beginners

New investors have it better than ever. The best mutual funds and ETFs for beginners feature no minimum investments, dirt-cheap fees and broad market …
July 30, 2020
Metropolitan West Corporate Bond Has a Bright Future
Making Your Money Last

Metropolitan West Corporate Bond Has a Bright Future

This new-ish corporate bond fund is comanaged by familiar faces.
July 23, 2020
Oakmark International Disappoints Us
Kip 25

Oakmark International Disappoints Us

When this fund is good, it shines relative to peers, but when it is bad, it fares far worse.
July 23, 2020
Protect Your Portfolio From Inflation
Financial Planning

Protect Your Portfolio From Inflation

It’s not an immediate threat, but some warning signs say to set up some defenses now.
July 23, 2020