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Exploring Portfolio Changes in FMAGX

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Fidelity Magellan Fund overview

The Fidelity Magellan Fund (FMAGX) invests primarily in common stocks of US and foreign issuers. It invests in growth stocks, value stocks, or both.

The fund’s manager uses a bottom-up investment approach. This means that he performs fundamental analyses of issuers by looking at factors such as their financial conditions and industry positions. He also looks at macroeconomic factors such as market and economic conditions before selecting stocks for the fund.

General Electric Company (GE), Berkshire Hathaway (BRK.B), Coca-Cola Company (KO), Boston Scientific (BSX), and Bruker (BRKR) were among the fund’s 135 holdings as of March 2016’s end. As of April, the fund was managing assets worth $15.2 billion.

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Portfolio changes in the Fidelity Magellan Fund

For this analysis, we’ll be considering holdings as of March 2016, as that is the latest available sectoral breakdown. The fund’s holdings after March reflect valuation-driven changes to its portfolio, not its actual holdings.

The information technology, financials, consumer discretionary, and healthcare sectors are the core sectors in which the fund invests. Combined, they form ~73% of the fund’s assets. FMAGX isn’t invested in the telecommunications services or utilities sectors.

Over the course of the year leading up to April, the fund’s manager has increased its exposure to both the consumer staples and consumer discretionary sectors. The financials and healthcare sectors have seen falls in their compositions in the fund. FMAGX’s exposure to the materials sector has also fallen sharply. Its exposure to the industrials sector has increased sharply.

One thing that’s quite visible from the fund’s portfolio moves is its high rate of portfolio turnover. The fund’s manager has experimented with several stocks across multiple sectors.

What can the fund’s performance be attributed to? Let’s take a look in the next article.

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