Fidelity Investments plans to unveil a new pitchman tomorrow in television commercials that feature Will Danoff, the unassuming portfolio manager of its behemoth US$103bil Contrafund.
The last time Boston-based Fidelity used a portfolio manager in a television advertising campaign was nearly 20 years ago.
The silver-haired Peter Lynch, however, was long retired from running Fidelity’s Magellan fund when he teamed up with comedian Lily Tomlin in the 1998 ad campaign. Lynch was already a household name as Fidelity’s long-time pitchman. He averaged annual returns of 29% during a 13-year run at Magellan that ended in 1990.
The ads running tomorrow are based on a true story about a letter Danoff received from a family during his early years running Contrafund. The family picked Danoff’s fund to invest money for their son’s college education. Danoff received updates from the family over the years with letters and pictures of their son growing up.
The idea of the ad is that Danoff represents Fidelity’s commitment to investors.
“It’s also about helping people understand taking a long term view,” said Brian Hogan, who oversees Fidelity’s equity and high-income mutual fund assets.
Currently, the short-term view is pretty dismal, with the S&P 500 index down 10.47% over the past three months.
Meanwhile, investors are overwhelmingly plowing their money into passively-run index funds. Star stock pickers have taken a backseat to that phenomenon.
Vanguard Group and its stable of passively managed index funds are top dog in the US mutual fund industry. Since the end of 2007, Vanguard funds have attracted US$1 trillion in net deposits from investors, according to Morningstar Inc. — Reuters
Last year, Vanguard’s passively managed funds attracted $222 bil in net investor deposits. By contrast, net withdrawals from Fidelity’s actively-managed funds totaled $8.3 bil, according to Morningstar.
But over the long term, money placed with Danoff and several other veteran Fidelity fund managers has been a good investment.
A $10,000 investment with Danoff when he took over Contrafund in September 1990 is now worth about $222,000, after fees. An investment in an S&P 500 index fund would have generated $109,596.20, according to Fidelity.
The commercial featuring Danoff and the letter, which he keeps taped to his office door, will run on NBC Nightly News, CBS’ “60 Minutes” and on several other TV and cable channels. — Reuters
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