Fidelity Magellan Fund and three other funds at Fidelity Investments had fewer assets invested in technology companies in April, as money managers remained concerned about the industry's growth prospects.
Magellan, the biggest actively managed US stock fund, had 12 percent of its US$71.9 billion in assets in tech shares in April, down from 13 percent on March 31, according to Fidelity's monthly Mutual Fund Guide. Funds managed by Will Danoff, Jason Weiner and Neal Miller that totaled US$42.8 billion also had less in tech.
As the NASDAQ Stock Market fell 8.5 percent in April, manager Robert Stansky kept Magellan's technology stake below the fund's benchmark, the Standard & Poor's 500 Index, of which tech companies represented 15 percent.
Intel Corp, IBM Corp and Microsoft Corp are among companies whose stocks have dropped this year because they cut sales and profit forecasts.
"Investors began to run for cover and lighten up on their tech holdings," said David Brady, who manages the US$1 billion Stein Roe Young Investor Fund.
Microsoft, Magellan's No. 3 stock as of March 31 and its top technology holding, lost 13 percent in April and has fallen about 17 percent this year. Intel and IBM have dropped more than 30 percent this year.
While the technology shares' decline may have reduced the value of Magellan's stake, Stansky likely wasn't buying either, said John Bonnanzio, editor of Fidelity Insight, a Wellesley Hills, Massachusetts-based newsletter.
"He didn't use the decline in tech stocks as an opportunity to add anywhere, which is telling," Bonnanzio said.
Stansky was cautious about tech in Magellan's annual report.
An exception among Fidelity's funds was Beso Sikharulidze, manager of Fidelity Mid-Cap Stock Fund. His fund's tech exposure increased to 35.2 percent in April from 32.8 percent in March.
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