Magellan reopens to investors

Fidelity Investments said Monday that it reopened its Magellan fund to new investors for the first time in more than a decade as the Boston-based mutual fund company seeks to capitalize on a turnaround by manager Harry Lange.

Magellan beat 82% of rival funds last year with the $45-billion portfolio posting its highest return in 14 years.

Lange, 55, who replaced Robert Stansky as Magellan’s manager in October 2005, steered a significant chunk of money overseas and into technology stocks in 2007.

The fund rose 18.8% for the year, compared with a 6.4% return for the average U.S. stock fund, according to Morningstar Inc.

Year to date, however, the fund is down 4.6%, compared with a 3.5% decline for the Standard & Poor’s 500 index.

Fidelity is hoping to beef up assets at Magellan, which has been suffering net outflows despite Lange’s performance.

Walter Donovan, president of Fidelity’s equity division, said cash was leaving the fund as investors who are near retirement shifted their holdings. About 85% of the fund’s assets are held in retirement accounts such as 401(k) plans, he said.

Magellan had been Fidelity’s flagship fund in the 1980s and 1990s, but its returns were disappointing in the late 1990s and the early part of this decade. Fidelity closed the fund to new investors in 1997, after critics said it had become unwieldy. The fund’s assets peaked at $110 billion in 2000.

Previous managers have included Peter Lynch from 1977 to 1990, Morris Smith from 1990 to 1992 and Jeffrey Vinik from 1992 to 1996.