The Fidelity Magellan Fund will reopen to new investors Tuesday. The fund has been closed to new accounts since Sept. 30, 1997; it has $44.8 billion in assets, according to Morningstar.
The fund is being reopened because 85% of its assets are earmarked for retirement, and baby boomers are beginning to retire and tap those dollars. Generating new sales will offset those future redemptions and stabilize the funds cash flows.
In a conference call, Harry W. Lange, manager of the fund since October 2005, said the reopening is likely to attract a lot of younger investors. He noted that the fund is a growth fund and more growth/more risk typically goes with a younger investor profile.
Walter Donovan, president of the equity division at Fidelity, said in the conference call that there is no predetermined point at which Fidelity will close the fund again. Wed consider the market environment and Harrys investment process when we make that decision, he said.