(Adds commentary on software in 5th, 6th paragraphs)
By Tim McLaughlin
BOSTON, April 16 Fidelity Investments' $109
billion Contrafund continues to avoid big oil companies, but
added to its position in electric car maker Tesla Motors Inc
in the first quarter as portfolio manager Will Danoff
cut exposure to biotech stocks ahead of the recent sell-off in
Contrafund returned 0.47 percent in the first quarter,
lagging the 1.81 percent advance of the S&P 500 Index.
Amazon.com Inc was the fund's biggest detractor, but
Danoff maintained his overweight position in the stock,
according to his first-quarter commentary released on Wednesday.
Tesla, meanwhile, helped the fund in the first quarter.
"Our long-term fundamental view for Tesla remained positive,
and we added modestly to the fund's position in the stock,"
according to the Contrafund commentary.
Danoff acknowledged that the stock prices of software as
service companies are high, but he remains confident in the
growth outlook for these firms.
"Corporations are rapidly adopting the software-as-a-service
model, where they effectively "rent" the latest software," the
fund said in its commentary. "(It) is cheaper, more-effective,
and easier to manage than the old client-server product."
In contrast, Danoff said he doesn't believe Exxon Mobil
and Chevron have strong growth prospects.
"The energy sector was the fund's largest underweighting at
period end, as we believed strong U.S. shale gas and oil
production could suppress prices and profits," according to the
(Reporting by Tim McLaughlin; Editing by Eric Walsh and Andrew