Fidelity replaces Cohen on Growth & Income Portfolio

BOSTON (Reuters) - Fidelity Investments has replaced Tim Cohen as manager of the Growth & Income Portfolio, a prominent stock fund that lost half its value 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 web site. Cohen, who was running the fund since October 2005, has taken on a new post in the firm as a research analyst for companies in the energy sector, Fidelity spokeswoman Sophie Launay said on Tuesday.

"We believe the appointment is in the interests of the shareholders of the fund," 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.

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.

Fidelity is the world's biggest mutual fund firm, managing about $1.2 trillion in assets as of November 30.

Under Cohen, the $6.2 billion (4.3 billion pound) 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.TO) TRIL.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.

The Growth & Income Portfolio's assets fell to $6.2 billion by December 31 from $10 billion in the third quarter. 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.

(Reporting by Muralikumar Anantharaman, editing by Matthew Lewis)