Fidelity Investments suffered three straight months of outflows from its stock and bond funds in late summer and early autumn, according to Financial Research Corp., but the Boston mutual fund giant called the streak "cyclical" and said inflows were robust in November.
Fidelity said it had $1.96 billion of inflows into its long-term (stock and bond) funds last month. Counting money market funds, inflows totaled $3.96 billion, it said. This was a reversal from the results of August through October, which began with $165 million of stock and bond outflows and descended to $1.34 billion of outflows, Financial Research said.
"Mutual fund flows tend to be cyclical," said Vin Loporchio, a Fidelity spokesman. "November was our second-best month for inflows this year for long-term funds, behind February" when Financial Research reported $2.18 billion flowed in.
Fidelity has had $14 billion of mutual fund inflows this year through Nov. 30, Mr. Loporchio said, including money funds.
Data from Financial Research, a Boston company that tracks flows, puts inflows to Fidelity long-term funds this year at $2.02 billion through Oct. 31, compared with Vanguard's $36.92 billion and American Funds' $66.53 billion.
In February 2004, Vanguard succeeded Fidelity as the nation's largest manager of long-term mutual funds, and American Funds ousted Fidelity as second-largest in June. Fidelity still holds the No. 1 spot overall, however, including money market fund assets.
"We have many funds that have performed well and got strong inflows," Mr. Loporchio said, "and our gross sales have been stronger than we thought they would be. But our net sales have been impacted by outflows from investment styles that are out of favor."
Analysts said Fidelity's losing streak was surprising, given the company's size. August and September were the first consecutive months of outflows at Fidelity in three years.
"It is unusual when you consider the size and breadth of the organization and their heavy presence in the retirement plan marketplace," said Geoffrey Bobroff, an East Greenwich, R.I., analyst at Bobroff Consulting.
Fidelity has been in a funk for almost two years and has tried some dramatic personnel moves, analysts said. In May, Stephen Jonas succeeded Abigail Johnson, the daughter of chief executive Edward "Ned" Johnson 3d, as head of Fidelity's core money management unit. Ms. Johnson became president of Fidelity Employer Services Co., the subsidiary responsible for selling retirement and other benefits programs to employers.
"When you see these kind of outflows, it indicates that their performance has slipped some," Mr. Bobroff said. "They may be experiencing outflows from their retirement product, which has always been one of their primary engines for growth."
This month the company changed portfolio managers at seven funds, including its flagship Magellan Fund, where Harry Lange of the Capital Appreciation Fund was named portfolio manager to succeed Robert Stansky, who retired.
