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Fund Times

Fund Times: Fidelity Closes Two Big Funds

Plus, American Century reshuffles managers, IRS rules on Rydex and PIMCO, more.

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Fidelity Investments today announced the closure of two high-profile funds.  Fidelity Growth Company (FDGRX) and  Fidelity Mid-Cap Stock (FMCSX) will stop accepting new money at the end of business on April 28, 2006. Both funds will still accept assets from existing shareholders. "Both of these funds have seen accelerating investor cash flows in recent months, and we believe that it's in the best interests of shareholders to close them at this time," said Bruce Herring, CIO for Fidelity's growth and mid-cap groups, in a press release.

We're glad to see Fidelity close these funds, particularly Mid-Cap Stock, since strong performance and asset inflows have bloated the funds' total asset base. Growth Company's currently has $30 billion in assets, and though we've been pleased with manager Steve Wymer's performance, we think the fund's size could make it less maneuverable going forward. We've been calling for Mid-Cap Stock to close for some time, and at nearly $12 billion the action now seems overdue. The fund has been one of the largest mid-growth offerings open to new investment, and we've steadily seen its stake in mid-cap names erode from more than 80% in 2001 to less than 60% today.

Lawrence Jones does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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