Home Adviser Fund Update Fidelity Magellan Fund Portfolio Manager Retires Published March 7, 2019 Jeffrey Feingold Departs Prominent Fidelity Fund Fidelity Investments has built its reputation on offering investors access to high-quality active managers, and few in its stable have garnered as much media attention as the stock-pickers running its Magellan fund. At the end of February, Jeffrey Feingold, who has had sole oversight of the fund since September 2011, announced his plans to step away from Fidelity. In a Feb. 22 filing with the Securities and Exchange Commission, Fidelity went public with Feingold’s decision to retire at the end of the year. He is planning to pursue his charitable endeavors full-time. The Boston fund giant tapped 20-year Fidelity veteran Sammy Simnegar as co-manager on Magellan until year-end, when he will assume the captain’s seat by himself. Simnegar was also named co-manager of Fidelity’s Independence fund, which he’ll also helm alongside Feingold until taking over at the beginning of 2020. Magellan won’t be Simnegar’s first fund-leadership role. He has managed Fidelity’s Emerging Markets fund since October 2012 and was joined by John Dance as co-manager on Feb. 22. Fidelity expects Dance to take over as the lone manager of Emerging Markets on Oct. 1 “after a thoughtful and deliberate transition,” according to its website. Since its 1963 inception, eight managers have steered Magellan. But it became a darling of the investment world under Peter Lynch, who ran the fund from 1977 to 1990. Lynch averaged a 29% annual return during his tenure, and the fund grew its assets from $18 million to more than $14 billion. The fund was so popular it attracted a flood of new money and became unmanageable; it closed to new investors in 1997. (Learn more about why mutual funds will sometimes turn investors away.) But Lynch’s big shoes proved impossible to fill, as the relative performance chart below demonstrates. As a refresher, relative performance charts show a direct comparison of the change in value of one investment compared to another—a move of 0.10 up or down represents a 10% change in relative value. In the chart below, when the line is rising, Magellan is outperforming the S&P 500 index. When the line is moving down, the index is outperforming. The chart does not give a read on gains or losses—it’s possible for the line to go up when both investments are declining in value, for instance. We use charts like this to get a read on how a fund or manager has performed compared to a benchmark or peer over time. The line’s sharp upward movement during Lynch’s tenure shows his outstanding track record. The downward trending line under Harry Lange’s management shows that Magellan underperformed the S&P 500 while he was running the show. Who’s Managing Magellan Fund? Source: Morningstar At its peak in August 2000, Magellan had $110 billion in assets and was the largest mutual fund in the world. Every year since, investors have taken more money out of it than they’ve added. It reopened to investors in 2008, and currently has $16 billion in assets under management. As index funds have grown in popularity, fewer top active fund managers are becoming household names. But though the financial press and some investors have moved on from active managers, we still firmly believe that doing your research can pay off, either by leading you to great managers, or helping you to avoid the mediocre-to-poor ones. Our analysis has led us to steer clear of Magellan. Feingold’s Magellan Has Narrowly Outperformed Source: Morningstar On the surface, Feingold has had some good results—the fund has gained an average of 15.3% a year since he was appointed, and as you can see in the relative performance chart above, has narrowly outpaced the S&P 500. Unfortunately, the fund’s benchmark also returned 15.3% a year from September 2011 through February 2019, and it did so with lower volatilityA measure of how large the changes in an asset’s price are. The more volatile an asset, the more likely that its price will experience sharp rises and steep drops over time. The more volatile an asset is, the riskier it is to invest in. than Magellan, meaning investors took on greater riskThe probability that an investment will decline in value in the short term, along with the magnitude of that decline. Stocks are often considered riskier than bonds because they have a higher probability of losing money, and they tend to lose more than bonds when they do decline. for a near identical return in the active fund. That’s probably not the risk-return profile most shareholders here were seeking. We’ll be watching to see if Simnegar can improve on the Feingold experience and make it at all resemble the Magellan of old. Getting Started With ESG Investing ESG investing (holding a portfolio of companies that meet certain environmental, social and governance guidelines) has burst into the mainstream over the last decade—what do you need to know about it? Many people find strong appeal in the idea of investing only in companies that are engaged in responsible business practices, that treat their employees and the environment well, or are making the world a better place (or at least not making it worse). If only it was as simple as it sounds. Adviser Investments has devoted substantial research and effort to developing straightforward ESG investing strategies. To help get the message out, we’ve put our thoughts into speech and print with a podcast and a short piece on the subject matter (see below). We welcome you to tune in and read about our philosophy—if you’d like to learn more, please call us at (800) 492-6868 or email us at email@example.com. The Adviser You Can Talk To Podcast: ESG Investing—Doing Well While Doing Good In the latest episode of The Adviser You Can Talk To Podcast, our research team introduces two new ESG investment strategies recently launched by Adviser Investments. Join Deputy Research Director Brian Mackey, EquityThe amount of money that would be returned to shareholders if a company’s assets were sold off and all its debt repaid. Research Analyst Kate Austin and Research Analyst Liz Laprade as they break down the philosophy underpinning ESG investments. Click here to listen to “ESG Investing—Doing Well While Doing Good” now. Subscribe and keep up with every new episode of The Adviser You Can Talk To Podcast! Socially Responsible and ESG Investing the Adviser Investments Way This piece provides a brief introduction to environmental, social and corporate governance investing and spotlights the two ESG strategies we offer our clients. Click here to download your free copy of this report. About Adviser Investments Adviser Investments is a full service wealth management firm, offering investment management, financial and tax planning, managed individual bond portfolios, and 401(k) advisory services. We’ve been helping individuals, trustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process., institutions and foundations since 1994, and have more than 3,500 clients across the country and over $6 billion in assets under management. Our portfolios encompass actively managed funds, ETFsA type of security which allows investors to indirectly invest in an underlying basket of financial instruments (these may include stocks, bonds, commodities or other types of instruments). Shares in an ETF are publicly traded on an exchange, and the price of an ETF’s shares will fluctuate throughout the trading day (traditional mutual funds trade only once a day). For example, one popular ETF tracks the companies in the S&P 500, so buying a share of the ETF gets an investor exposure to all 500 companies in the index., socially responsible investments and tactical asset allocation strategies, with particular expertise in Fidelity and Vanguard mutual funds. We take pride in being The Adviser You Can Talk To. Our minimum account size is $350,000. To see a full list of our awards and recognitions, click here, and for more information, please visit www.adviserinvestments.com or call 800-492-6868. This material is distributed for informational purposes only. The investment ideas and expressions of opinion may contain certain forward-looking statements and should not be viewed as recommendations, personal investment advice or considered an offer to buy or sell specific securities. The views expressed in this update are subject to change at any time. Mutual funds and exchange-traded funds mentioned herein are not necessarily held in client portfolios. Data and statistics contained in this report are obtained from what we believe to be reliable sources; however, their accuracy, completeness or reliability cannot be guaranteed. Our statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio. You may request a free copy of the firm’s Form ADV Part 2A, which describes, among other items, risk factors, strategies, affiliations, services offered and fees charged. Past performance is not an indication of future returns. 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