The fund industry was a very different place when Will Danoff started managing Fidelity Contrafund in September 1990. Vanguard’s S&P 500 index fund (launched in 1976) was one of the few index funds available to retail investors, and active management was the default approach. Investors, media outlets, and financial advisors lavished praise and asset growth on star managers such as Danoff.

Fast forward to 2026, and the entire landscape has changed. Index funds now account for more than half of all fund assets, and successful active managers are few and far between. The tide has overwhelmingly shifted against both active management in general and the star manager system in particular. Rather than entrusting a fund to a single individual who could make or break performance, most firms have shifted to a more team-based and process-based approach.

Amid this wholesale shift in the fund landscape, Danoff is an outlier as a long-tenured active manager who has held onto his winning record over time. Despite a couple of off years, such as 1997, 2016, and 2022, Contrafund beat its benchmark by an annualized 2.75 percentage points over the period from October 1990 through May 2026.

I first covered Contrafund as an analyst for Morningstar back in the early 1990s. I remember visiting his office in Boston and being impressed by his research process and genuine dedication to helping shareholders. Here are some key takeaways on what’s driven the fund’s success over time.

Lesson 1: Lean into your best ideas

Danoff has long believed in betting big when he sees a big opportunity, focusing on best-of-breed companies in growing markets. The fund’s portfolio used to be more diffuse but has grown more concentrated over time. In recent years, Contrafund’s 10 largest holdings have made up as much as 58% of its total assets.

Although the market itself has also become more top-heavy, Contrafund isn’t a closet index fund. As Morningstar’s Robby Greengold has pointed out, the fund has owned many of the same stocks that show up in the S&P 500 (the benchmark identified in its prospectus) and the Russell 1000 Growth (the benchmark for the large-growth Morningstar Category), but in different proportions. Judged against the S&P 500, the fund’s active share (a measure of portfolio overlap) stands at about 50%, indicating that only about half its holdings replicate the index. That’s down from previous levels but still shows clear evidence of active management as opposed to closet indexing.

Lesson 2: Focus on the long term

In a world increasingly focused on quarterly earnings and daily stock-price moves, Danoff tries to maintain a longer-term view. He looks for companies that can generate strong growth in earnings per share over the next five to 10 years. He’s also been willing to hold on to positions through temporary disappointments. For example, he stuck with Facebook (now Meta Platforms) META despite the stock’s 64% decline in 2022 as investors worried about its slowing growth and hefty capital spending.

The fund’s long-term focus partly reflects the realities of its massive asset base, which makes it more challenging to make rapid-fire trades. The annual turnover rate was significantly higher in the early 1990s (reaching 320% in 1990) but has remained below 40% for the past 10 years or so.

Lesson 3: Don’t sell Too early

In interviews with Morningstar and others, Danoff has noted that even if a stock has already doubled or tripled, it’s not necessarily too late. If earnings continue compounding over the next few years, the stock price can still move significantly higher. He points to selling off part of his position in Tesla TSLA in 2017 and 2018 as one of the mistakes he’s learned from.

That lesson aside, many of the fund’s largest positions are in stocks that have been in the portfolio for 10 years or more. Letting the portfolio’s winners ride has paid off with major holdings such as Meta, Nvidia NVDA, Alphabet GOOG, Amazon.com AMZN, and Microsoft MSFT.

Lesson 4: Management matters

Focusing on management quality is another factor behind Contrafund’s success. Danoff prefers founder-led companies because of their strong ownership mentality, focus on creating long-term value, and greater willingness to invest through short-term setbacks. He spends a large portion of his time meeting with management teams, averaging four or five meetings per day. He tries to develop a deep understanding of each company’s strategy, competitive differentiation, and value proposition. He also looks for management teams that are engaged, excited about their business, and focused on providing value to customers.

This meeting-intensive process gives him a broad view of emerging trends across a wide range of industries, as well as an ability to hold management accountable by checking notes from previous meetings to see if the company has followed through and executed on its strategies.

Lesson 5: Be flexible and cast a wide net

Danoff has often referred to his flexible, expansive approach as one key to Contrafund’s success. Despite a huge asset base, the portfolio’s average market cap is slightly lower than the large-growth category average. And while the portfolio typically has a growth slant, Danoff has also held cheaper names such as Berkshire Hathaway BRK.A, which has been a fixture of the portfolio since the end of 2002.

Although Contrafund’s portfolio is concentrated in its top holdings, Danoff often builds small positions and adds to them over time. The portfolio’s “farm team” features hundreds of smaller positions that Danoff can monitor and shore up as their growth trajectories become more compelling. This feeder system can also include privately held companies. For example, the fund held shares in Facebook, Pinterest PINS, and Airbnb ABNB before they went public. Contrafund has also owned a stake in SpaceX SPCX since 2015, which had grown to about 4.7% of assets by April 2026. Owning shares in private companies has helped fuel returns, but it also helps Danoff build out a more complete picture of evolving industry trends.

Lesson 6: Don’t overcomplicate things

Ultimately, Danoff’s success isn’t the product of a particularly complex or esoteric strategy. Earnings growth is at the core of his strategy, but the same could be said for nearly every other growth-oriented stock-picker on the planet. Instead, I’d attribute much of his success to sheer repetition and mastery of his craft—spending day after day reading company reports, meeting with management teams, and trying to understand each company’s strategy, competitive edge, and value proposition. It’s just fundamental analysis done consistently and done well.

It won’t be easy for his designated successors (Asher Anolic and Jason Weiner) to replicate Danoff’s record when he officially steps down at the end of the year. But his enduring success should reassure future generations of active managers that while outperformance may be elusive, it is possible.