Sign of the times

Dancing with the Fund Manager Stars Gets Canceled

Last week, Fidelity changed managers at Magellan once again. This time, it didn't even make the business page. Sure, Magellan (FMAGX) has gone from being the world's largest fund to the ninth-largest fund at Fidelity. Today it has $17 billion and carries, ironically enough, a "one-star" rating from investment researcher Morningstar Inc.

The bigger point is that virtually no manager's departure today would make headlines. Yes, Pimco's Bill Gross will make news someday when he calls it quits, and a few others will cause a stir or a buzz, but the heyday of the "star manager" appears over. "At exactly the market moment when star managers should matter most, they've vanished quicker than a tax dollar in Washington," said Jim Lowell, editor of the Fidelity Investor newsletter. "While there are many managers whose track records are stellar, the days of building industry behemoths on the backs of one star have dwindled to a flickering flame."

Social mood...and also the fact that most mutual funds are long only and must stay close to fully invested. Only in a raging bull market can these retail mutual funds compete with managers with few or no restrictions on their investments. For a comparison, here's this from Zero Hedge:

Hugh Hendry Fund Soars 40% YTD As China Sinks