20 Funds with the Biggest Outflows in 2006
Looking for bargains where others are bailing out.
A little while ago I looked at the hottest-selling funds of 2006. Now I'm going to look at the funds that have suffered the largest net redemptions so far this year, based on our calculations. It's an intriguing list, with a number of surprises. Some look more like buys than sells to me, but I'm a contrarian.
Below are my comments about the funds that are seeing the most money head out the door. For a complete list of the 20 funds with the greatest net redemptions in 2006, see the table near the end.
Fidelity Magellan (FMAGX)
Net Outflows: $6.3 billion
It's easy to see why investors are redeeming their shares in this fund. Its huge asset base and poor stock selection have caused it to beat the index in only two of the past six years. Moreover, Harry Lange's early lead versus the index this year turned quickly into a deficit when the markets pounded tech and Japanese stocks in the second quarter. For the year to date, the fund is up just 0.8%, while the S&P has returned 5%. On the plus side, Lange's tenure here has been too brief to draw any conclusions, and the fund's outflows have the fund down to a more manageable $44 billion. So, I'm more bullish on this fund than I have been in a while, but I still wouldn't buy.
Russel Kinnel has a position in the following securities mentioned above: AWSHX. Find out about Morningstar’s editorial policies.