(Adds comments from Contrafund portfolio manager)
By Tim McLaughlin
BOSTON, April 30 Fidelity Investments'
Contrafund, the largest mutual fund shareholder in
Yahoo Inc, slashed its stake in the Internet company by
28 percent in the first quarter, according to the fund's latest
The $109-billion Contrafund, however, maintained an
'overweight' position in Yahoo at the end of March.
"We trimmed the fund's position, but remained overweighted
relative to the index due to our confidence in management's
ability to stabilize and grow the core business," portfolio
manager Will Danoff said in his commentary letter.
"We viewed the company's 24-percent ownership stake in
China-based Alibaba Group Holding favorably," Danoff added in
his first-quarter commentary to Contrafund shareholders.
Alibaba's IPO is set to be the largest in the United States
since Facebook Inc's 2012 market debut and it is the most
awaited IPO in what's expected to be a record year for U.S. tech
Still, Yahoo hurt Contrafund's first-quarter performance
when its shares fell on weak display-advertising results and a
jump in operating expenses. Yahoo shares have fallen 11 percent
Contrafund owned about 29.7 million Yahoo shares at the end
of March, down from 41.1 million at the end of 2013, the fund's
latest monthly holdings report showed on Wednesday.
Yahoo shares accounted for about 1 percent of Contrafund's
holdings at the end of March, with a stake valued at $1.06
But Yahoo doesn't crack the fund's top 20 holdings. Danoff's
biggest three bets are on Google Inc ($7.8 billion),
Berkshire Hathaway Inc ($4.7 billion) and Wells Fargo &
Co ($3.4 billion).
Contrafund is down 1.64 percent this year, lagging the 1.62
percent advance on the S&P 500 Index.
Danoff told Reuters on April 21 that he was looking beyond
the tech sector to reinvigorate his fund's performance.
Over the past 10 years, Danoff has outperformed 94 percent
of his peers in the large-cap growth fund category, according to
(Reporting by Tim McLaughlin; Editing by Bernadette Baum)