Fidelity’s Weak Performance Causes Drop In Investments

Investors steered some of their new equity mutual fund purchases away from industry giant Fidelity Investments in March, according to Trim Tabs Financial Services Inc., an investment advisory service in Santa Rosa, California.

Fidelity’s stock funds attracted 12.1 percent of all new stock fund investments made in March, the lowest level on a percentage basis since December 1994, when it was 9.5 percent, said Charles Biderman, Trim Tabs’ president.

Fidelity’s share was closer to 20 percent in January and February, according to Biderman, who bases his analysis on sales information provided by the Investment Company Institute.

The nation’s biggest fund group manages more than 19 percent of all domestic-stock fund assets, the Wall Street Journal reported.

The recent slowdown in Fidelity fund purchases may be tied to the recent disappointing performance of some of the firm’s biggest stock funds, Biderman said.

Fidelity’s flagship Magellan Fund suffered the biggest decline in new share purchases in February and March, Biderman said. The $56 billion fund is up 2.2 percent this year, compared with a 5.2 percent gain of the benchmark Standard & Poor’s 500 Index.

A “crisis of confidence” may be building among Magellan’s shareholders, Biderman said.