(Adds details on Contrafund's past Wells Fargo holdings in
By Tim McLaughlin
BOSTON Oct 18 Top Fidelity stock picker Will
Danoff beat the drum for big tech stocks in his latest quarterly
commentary but stayed silent on the unauthorized accounts
scandal surrounding Wells Fargo & Co, one of his top
Danoff has a $2.7 billion bet on the lender in his $108
billion Contrafund portfolio. The Boston-based fund is
the third-largest mutual fund investor in Wells Fargo, behind
two index funds run by Vanguard Group, according to Thomson
Reuters data for the end of August.
Wells Fargo is the only bank in a Contrafund top 10 holdings
list dominated by tech companies. It dragged on Contrafund's
third-quarter performance, falling nearly 6 percent amid
disclosure its branch staff opened as many as 2 million accounts
without customers' knowledge.
Danoff did not mention Wells Fargo in his widely read
commentary released on Tuesday. Before the account scandal
became a crisis for Wells Fargo, Danoff had 2.5 percent of his
fund in the bank's stock, according to Contrafund's August
holdings report, the latest available.
Danoff was not available to comment.
In August 2015, Danoff singled out Wells Fargo and said the
bank "could benefit materially" from a rise in U.S. interest
rates. But since the end of December, he has cut his position in
the company by 22 percent, to 52.65 million shares at the end of
August from 67.45 million shares, Fidelity fund disclosures
Meanwhile, his big sector bet on information technology
companies, including Facebook Inc, Google parent Alphabet
Inc and Amazon.com Inc, paid off in the third
quarter as they were among the top contributors to a
Contrafund, the largest U.S. stock fund run by a single
manager, advanced 5.21 percent in the quarter, compared to the
S&P 500's return of 3.95 percent.
"Exposure to tech increased this quarter and it remained the
fund's largest sector allocation in both absolute and relative
terms," according to the fund's investor commentary. "We
continue to believe many top companies here have the potential
for significant growth."
Danoff has about 37 percent of his portfolio in information
technology companies, compared to a weighting of about 21
percent in the S&P 500 Index.
Contrafund has been underweight in the energy and utility
sectors, avoiding benchmark heavyweights such as Exxon Mobil
Corp, AT&T Inc and Verizon Communications Inc
Danoff has been unenthusiastic about what he describes as
capital-intensive telecom and utility stocks.
(Reporting By Tim McLaughlin; Editing by Chizu Nomiyama, Bill
Trott and Meredith Mazzilli)