Market Update
Fidelity is losing one of the best stock-pickers in the business.
The Boston fund giant announced today that Beth Terrana will step down from active management, effective June 1. All told, Terrana managed significantly more than $20 billion at Fidelity Fund FFIDX, Fidelity Destiny II FDETX, and Fidelity Advisor Growth & Income FGIRX.
Although her funds had faltered a bit this year, Terrana's long-term risk-adjusted record is excellent. At Fidelity Fund, where her tenure was the longest, she had kept pace with the S&P 500 index since taking over in August 1993. Moreover, the fund had been less volatile than the index, thanks to Terrana's eschewal of huge bets on sectors or individual stocks.
Terrana said she is not leaving because of any dissatisfaction with Fidelity; rather, after 15 years as a fund manager, she is simply ready for a new challenge. For now, she will continue to work at Fidelity, mentoring the firm's analysts, but her long-term plans remain uncertain. Terrana says they may well take her outside the fund industry.
The timing of Terrana's decision is a bit awkward for Fidelity, as the firm has already lost several high-profile managers this year. Fidelity Advisor Growth Opportunities' FAGOX George Vanderheiden retired in February, Fidelity Aggressive Growth's FDEGX Erin Sullivan departed the same month to join a hedge fund, and in April Fidelity Disciplined Equity's FDEQX Brad Lewis announced plans to leave the firm. Fidelity has also lost a series of technology-fund managers during the past year.
Terrana's departure has predictably set off a series of managerial changes. Nick Thakore will leave Fidelity Trend FTRNX to take over Fidelity Fund, by far the largest of Terrana's charges.
Thakore did a good job at Trend, his only diversified-fund charge, but his tenure there was less than two years, making it difficult to say how he will fare over the long haul. Moreover, Fidelity Fund is considerably larger than his previous charge. However, Terrana says Thakore was her first choice for the job, and points out that she had even less experience when she first became a diversified-fund manager.
Ramin Arani, who has managed several sector funds, will assume control of Trend.
Fidelity Contrafund II's FCONX Adam Hetnarski will take over Destiny II. Though he did a creditable job in a previous stint at Export & Multinational FEXPX, like Thakore, Hetnarski lacks a long track record as a diversified-fund manager. He will remain manager of Contrafund II, which he began running in February.
Fidelity Advisor Balanced's FAIGX John Avery will become manager of Advisor Growth & Income. Avery has used a value-oriented approach at Advisor Balanced, and Fidelity's president, Bob Pozen, says he'll use the same strategy at Advisor Growth & Income. That will be a bit of a change from Terrana's approach, which was tilted more toward growth.