* Fund’s assets down 2/3rds in 2008, Morningstar says
* Cohen has been demoted, analyst says
* New manager seen having a growth-style orientation (Adds analyst comments, byline)
BOSTON, Jan 13 (Reuters) - Fidelity Investments replaced Tim Cohen as manager of the $6.2 billion Growth & Income Portfolio, a stock fund that saw its returns halved last year due to disastrous bets on the financial sector.
James Catudal replaced Cohen as the fund’s manager on Monday, Fidelity said on its website. Cohen, who ran the fund since October 2005, has taken on a new post as a research analyst for companies in the energy sector, Fidelity spokeswoman Sophie Launay said on Tuesday.
“That’s clearly a demotion,” said Christopher Davis, fund analyst at research firm Morningstar. “His tenure at Growth & Income was disastrous by any standard.”
Catudal, who joined Fidelity in 1997 as an equity research analyst, will continue to manage the Advisor Growth & Income Fund, the VIP Growth & Income Portfolio and the Stock Selector Fund, Fidelity said.
“We believe the appointment is in the interests of the shareholders of the fund,” Fidelity’s Launay said. Catudal has an “excellent long-term record as a portfolio manager and his large-cap style of investing aligns well with the growth and income mandate of the fund,” she said.
Fidelity is the world’s largest mutual fund firm, managing about $1.2 trillion in assets as of Nov. 30.
Under Cohen, the Growth & Income Portfolio fell 50.9 percent in 2008 compared with the 37 percent negative return of the Standard & Poor's 500 index .SPX and was ranked the third-worst fund in the "large-cap core" category by research firm Lipper Inc. Lipper is a unit of Thomson Reuters TRI.TOTRIL.L.
The fund had insurer American International Group AIG.N and bank Wachovia Corp, companies that were hammered by the financial crisis, among its top five holdings at end-August.
“He had a tendency to walk into one value-trap after another,” said Davis of Morningstar.
The Growth & Income Portfolio’s assets fell to $6.2 billion by Dec. 31 from $19.2 billion a year ago, according to Morningstar. The fund’s 2008 losses also hurt its longer-term track record, causing it to trail the S&P index over three, five, 10 and even 15 years, according to Lipper data.
Morningstar’s Davis said investors should reexamine the position of the fund in their portfolios because of the change of managers.
“The new manager has more of a growth-oriented style whereas Tim Cohen was more of a value-oriented investor. So the fund may not fit as well in an investor’s portfolio,” he said. (Editing by Leslie Gevirtz)
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