‘One of the All-Time Great Investors’: How Fidelity’s Will Danoff Proved Active Management Can Still Succeed

Key Takeaways

• Fidelity Contrafund manager Will Danoff has announced that he will retire at the end of the year.
• Danoff’s two comanagers, Asher Anolic and Jason Weiner, will take the reins.
• We expect they will continue to run it in a growth strategy.
• Everyday investors can learn from Danoff to keep that curiosity: Keep learning and keep trying to find out what’s really growing.

Ivanna Hampton: An investing legend will retire from one of the world’s biggest and most successful actively managed mutual funds. I spoke with Morningstar Senior Principal of Ratings Russ Kinnel about Fidelity Contrafund FCNTX manager Will Danoff, and here’s what Russ had to say about Danoff and what everyday investors can learn from him.

Fidelity Contrafund’s Will Danoff Annouces Retirement at Year-End

Well, let’s pivot to some big news that came out within active management. Fidelity Contrafund manager Will Danoff has announced that he will retire at the end of the year. Can you talk about how Danoff succeeded against his competition and in different market environments?

Russel Kinnel: Yeah, Danoff is one of the all-time great investors. Just look at not just his long-term record in which he crushed his benchmarks and peers, but also in the short term, year on year, you see he rarely suffered significant underperformance versus peers or benchmark. And he did maybe the best job of anyone of managing that fire hose of information. If you’re at Fidelity, you’ve got input from hundreds of analysts, thousands of company visits, scores of companies coming to visit every day. That’s a ton of information to take in, and Danoff loved all of it. So he loved visiting companies, talking to analysts. He loved finding out: Where’s the real growth? How is technology changing? More recently, he’s done well with names like Meta META and Nvidia NVDA, but he really just thrived in all that, and was able to make—put all that to work in a huge strategy with over a hundred billion in assets. And so I think that’s really remarkable. And he really—even though he was focused on the long term—on a single-year basis, he didn’t want to lose out. So if he felt this is the year for financials or some other value industry, he might go there. He very much was focused on building that long-term record with good year-to-year success, and I think just did a remarkable job of thriving even with a huge asset base.

Danoff’s Departure Leaves a Lasting Legacy and Room for Growth

Hampton: That sounds like a lot of unique qualities. Will there be another active manager like Danoff again?

Kinnel: Probably, at least one somewhat similar. So I think there’s still, as he has shown, there’s still room for active managers to succeed. Will they be as famous? I don’t know, but I think there’s still room for them to succeed. You know, it might be a little different. Obviously, the way you add value with investing changes every day as innovation alters the way things work. But I think there still will be room for the Danoffs of the world, and certainly there will still be some really good investors.

Hampton: So Danoff’s two comanagers will take the reins. Who are they, and what do they bring to the table?

Kinnel: It’s Asher Anolic and Jason Weiner, and they’re experienced managers who’ve worked with Danoff and were kind of clearly the heirs apparent on this fund. And so I expect they will continue to run it in a growth strategy. I think they can try to be true to Danoff’s strategy. Now, they’re human. They may not do as well as Danoff, but we think they’re pretty good, and I think the fund still has potential.

Hampton: They’ll have some big shoes to fill, right?

Kinnel: Absolutely.

Lessons From Longtime Leader of Fidelity Contrafund Manager Will Danoff

Hampton: So what are some lessons everyday investors like me can learn from a legendary stock-picker like Danoff?

Kinnel: I think one of them is simply keep that curiosity. He was always interested, always engaged. He didn’t do well for a few years and then start to tune it out or try and just keep doing what he had done. He was always engaged, always trying to learn new things, always trying to understand management. So I think that’s something we can all take: Keep learning, keep trying to find out what’s really growing, what are the dynamic industries? Because the real innovation doesn’t just affect those particular innovative companies. It’ll affect everything. I think the big trends in AI and some other things, whatever Google and Amazon are doing, they affect companies everywhere. And so you really need to understand those innovations, even if you’re not going to invest in the biggest, most, biggest tech companies out there.

Watch 3 Winners and 3 Losers From Emerging-Market Funds’ Big Rally for the full episode of Investing Insights with Russel Kinnel and Ivanna Hampton.