A headline on a Nov. 1 Business article mischaracterized the performance of Fidelity Investments' flagship Magellan Fund. Its assets, not its value, have dropped by more than half since 2000. (Published 11/5/2005)

Fidelity Investments said yesterday that Robert Stansky will retire after nine years of managing its flagship Magellan Fund, whose assets have sunk by more than half to $52.5 billion since 2000.

Stansky will be replaced by Harry Lange, manager of the Fidelity Capital Appreciation Fund, the Boston-based company said in a statement. Stansky's fund, which swelled to $110 billion five years ago, has trailed its peers in recent years, suffering because of its unwieldy size, a bear market and his emphasis on buying shares of large companies, analysts said.

"It's clear that he hasn't been able to deliver the performance they've been looking for," said Christopher Traulsen, a fund analyst at Chicago-based research company Morningstar Inc.

Magellan, once the industry's largest actively managed stock fund, has lost some of its luster. The fund, which has been closed to new investors since 1997, has trailed 81 percent of competitors in the past three years, according to data tracked by Bloomberg.

The $117 billion Growth Fund of America, managed by Gordon Crawford at Capital Group Cos.' American Funds, is the biggest actively managed and best-selling stock fund. Magellan was even overtaken in September by Fidelity Contrafund, a $55.7 billion value-oriented fund, as the company's biggest stock mutual fund.

Fidelity also named Timothy Cohen manager of Fidelity Growth & Income Portfolio, succeeding Steven Kaye. Kaye was considering options within Fidelity, the company said.

Magellan has enjoyed a high-profile line of managers, starting with Fidelity's current chairman, Edward Johnson III, who oversaw the Magellan Fund from 1963 to 1973, and including Peter Lynch from 1977 to 1990 and Jeffrey Vinik from 1992 to 1996.

Lynch's strong returns at Magellan and his evangelizing to the investing public helped popularize mutual funds just as many U.S. employers were establishing 401(k) programs. Magellan grew from $22 million to $12.3 billion under Lynch, now a Fidelity vice chairman.

Stansky, who has an undergraduate degree from Nichols College and a master of business administration from New York University, has been with Fidelity since 1983. He did a stint as a research assistant for Lynch in the mid-1980s and ran Fidelity's Growth Company and Aggressive Growth funds before replacing Vinik.

Under Lynch particularly, the fund was nimble and able to make bets on small companies. Sales soared, making those types of investments less frequent.

Because of its bulk, Stansky steered the fund to large-company shares. Magellan owns about 200 stocks, led by General Electric Co., Microsoft Corp. and Exxon Mobil Corp., which make up about 10 percent of its assets. Stansky acknowledged in a statement the difficulty of running the fund.

"For as long as I have been managing Fidelity Magellan Fund, I have worked very hard to give its shareholders the best possible return," he said. "I battled market headwinds in recent years as small-cap stocks significantly outperformed large-cap stocks, which were my focus in the fund."

In the past five years under Robert Stansky, Fidelity Investment's Magellan Fund has declined from $110 billion to $52.5 billion.