Fidelity closes two more funds and shuts three money market funds.
After attracting billions of dollars in cash over the course of a year, Fidelity Investments is closing its biggest stock mutual fund to new investors.
Only existing holders will be able to make new purchases after the close of business on April 28.The company said Friday.
Fidelity said that Danoff has managed both Contrafund and Advisor New Insights.
Russel Kinnel, director of mutual fund research, said it was a good move.We wrote in 1996 that FidelityContrafund has gotten fat.
The editor of Fidelity Investor said closings are usually driven by the manager.Fidelity's biggest stock fund in September was dethroned byContrafund.
"I think that Will Danoff, obviously a gifted stock picker and an excellent manager, understands that over the past 12 months he's been running with, on average, about 9% ofContrafund in cash."That shows that he is having a hard time putting the cash to work.
Danoff might be afraid that if the large-cap growth market takes off, he could trail his benchmark.
Philip Bullen, chief investment officer overseeing the U.S. large-cap core and capital appreciation groups for Fidelity Management & Research Co., said in a statement that Danoff has done an "outstanding" job of managing the funds.
The two funds took in a total of more than $12 billion in net new cash in the 12 months through February 28, Bullen said.
He said assets have continued to grow.Will will have the opportunity to maintain the funds' consistent performance track records if Contrafund and Advisor New Insights are closed at this time.
Money will still come into the funds despite the closings.
Existing shareholders can continue to add to their accounts even though the funds close to new accounts on April 28.
If the funds were established as an option as of April 28, employer-sponsored retirement plans and certain discretionary programs may be able to open additional accounts for investors.
The closing of funds in 401(k)s doesn't result in shutting off of new flows the way it does in other funds because of Fidelity's huge size.