From The Wall Street Journal -- password needed
Fund investors are reacting to the dip in stock prices by pulling assets, according to the WSJ
. In the week ending last Thursday they pulled an estimated $4 billion out of stock mutual funds, on a net basis, according to TrimTabs.com. According to AMG they pulled $1.1 billion for the week ending Wednesday. This compares to inflows of a net $13.3 billion the prior week. Only Schwab admitted slight outflows to the WSJ
both T. Rowe Price and Alliance Capital go on the record saying flows are fine.
Investors show no fear
From The Los Angeles Times
The fall in the market, one of the worst weeks ever, does not seem to be scaring mutual fund investors.
Some of the nation's largest fund companies -- including Fidelity Investments, American Century Investments, Vanguard Group, T. Rowe Price Associates and Invesco Funds Group -- say they haven't noticed even an increase in the number of calls to their phone centers, let alone redemption activity. It seems as investors have been learning from the past. Last year investors pulled a net $11.6 billion out of stock funds in August 1998, amid a major slide in the global markets prompted by Russia's bond default.
Too little too late
From The New York Post
Bob Stansky, the portfolio manager of Fidelity Investments' Magellan, has been off in his timing. He increased his tech weightings in the last three months, just as many stocks in that sector began to tank.
Stansky later he increased the tech allocation in the $92.2 billion fund to 22% at the end of September, up from 19.7% at the end of July. The poor timing to enter the tech market leaves Magellan shareholders with a year-to-date gain of only 4.2% -- far lower than top-performing funds.
Fidelity's medical fund doesn't deliver
Fidelity Select: Medical Delivery invests in health care delivery companies, however it has not delivered a competitive performance. The fund has had seven managers over the past 10 years and is ranking dead-last among health-care funds over the year-to-date, one-, five- and 10-year periods. Assets have dropped from $250 million in 1994 to just over $50 million today. Industry experts say the problem is the fund's focus on medical delivery names. Other health funds own pharmaceuticals, which have done much better over the past couple of years. Some might say the poor performance has come from a high turnover in managers but Fidelity's 39 Select funds, which charge a 3% load, all have a high turnover because they are a training ground for aspiring portfolio managers.
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