Magellan Rotates Out of AOL, Into Telecom

Fidelity Investments’ mammoth Magellan Fund dropped Internet service provider America Online Inc. and media giant Time Warner Inc. from its top 10 holdings at the end of June, the company reported Thursday.

AOL, which Fidelity started selling in the first quarter, also recently disappeared from the top 10 holdings of six other funds in the same family.

Analysts said Fidelity’s moves have probably contributed to AOL’s slide. The shares, which closed Thursday at $121, down $2, are 28% off their peak in early April.

But Magellan manager Robert Stansky has not abandoned technology stocks, pouring money into telecommunications giant AT&T; Corp. and telecom equipment maker Lucent Technologies Inc. Both stocks joined Magellan’s top 10 in the second quarter.

“He’s moved from one part of technology to another,” said Geoff Bobroff, a mutual fund consultant.

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Magellan’s Milestone

Fidelity Magellan climbed above $100 billion in assets Thursday. The world’s largest mutual fund, which has been closed since September 1997, is more than $15 billion larger than the combined assets of all stock funds at the end of 1985, according to the Investment Company Institute, the fund industry’s trade association. But Magellan, whose assets have more than doubled in the last four years, may not be the biggest mutual fund for long. Vanguard Group’s flagship Index 500 fund is growing at a faster clip and has about $93 billion of assets. Magellan’s year-end assets since 1989 and latest, in billions of dollars:

Thursday: $100.1 billion

Sources: Bloomberg News, Fidelity Investments