Fidelity's Magellan Fund management fees dropped seven percent for the fiscal year ended March 31 compared to the same period the year before, the fund firm told shareholders in a report released on Thursday. The fund brought in $321.4 million at the fiscal year ended March 31 and $344.4 million at last year's end.

The fund firm awards fund performance and penalizes lackluster results. The fund underperformed compared to its benchmarks and consequently was penalized $49 million.

Magellan's manager, Robert Stansky, acknowledged "I made some mistakes in stock picking and sector selection" and attributed the performance to a "defensive slant" and underweighting of technology and industrials.

The fund has been closed since September 1997. Annual withdrawals range from two percent to four percent of the fund's assets, said spokeswoman Anne Crowley. She added that the company is currently not planning to reopen the fund.

What are the future prospects for Stansky and Magellan? "I'm a bit more optimistic about the overall market than I was when the period started," said Stansky. 

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