Coping With a Tough Market

Will Danoff is betting on big multinationals to help Fidelity Contrafund get through the bear market.

When we interviewed Will Danoff three years ago, the gregarious manager of Fidelity Contrafund was in the midst of a terrific year. His fund earned 16% in 2005, beating Standard & Poor's 500-stock index by 11 percentage points -- not too shabby for a fund with $60 billion in assets. Contra made money the next two years, trailing the market by four points in 2006 and clocking it by 14 in '07. But Contra, now swollen to $71 billion and closed to new investors, has been unable to escape the bear's claws. Year-to-date to August 11, the fund lost 12%, lagging the market by almost two percentage points. "Clearly, this has not been a good year for shareholders of Contrafund," says Danoff, 48.

His long-term record remains solid. Since Danoff began running Contra in 1990, it has gained an annualized 15%. That tops the S&P 500 by an average of four percentage points per year and the average large-company growth fund by about five points per year.

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Manuel Schiffres
Executive Editor, Kiplinger's Personal Finance