Fidelity Investments says it will not offer investors in its Magellan Fund, the nation's largest mutual fund, year-end dividend payments due to a calculation error.
The Boston-based company, with offices in Salt Lake City, said its analysts predicted in November that the fund would distribute $4.32 per share from the $30.6 billion fund, which has about 3 million shareholders. The fund paid $2.77 per share - $2.64 in capital gains and 13 cents in income - to investors in May.Last year, Magellan paid distributions totaling $7.25 per share, including $4.33 at year's end.
The dividend revision was not a reflection of the performance of the stock and bond markets, which have languished through much of the year but was caused solely by the calculation error, Fidelity said.
"In the normal recalculation, we uncovered an error which meant no year-end distribution," said Fidelity spokeswoman Jane Jamie-son.
Jamieson said the new estimate will not affect customers or the fund's price because the $4.32 figure was only an estimate. She said the figure represented estimated capital gains and income for the rest of 1994.
Michael Lipper, president of Lipper Analytical Services, which analyzes investment companies, said the error is the largest such miscalculation he knows of, but he added the Magellan Fund is the largest mutual fund in the country.
"Will it unnerve some people? It could," he said.
Lipper said he wasn't entirely sure what happened to the fund, which invests primarily in common stocks and debt securities.
"We're only dealing with a partial deck here . . . It appears this is some form of an accounting snafu rather than a portfolio shifting. It certainly is a large accounting snafu," Lipper said.
Magellan, which was founded in 1963 and went public in 1981, has fallen about 3.8 percent in value so far this year.
By contrast, stocks that comprise the Standard & Poor's 500-stock index, one of the broadest barometers of the stock market, have fallen 2.82 percent so far in 1994.