$1 Billion Withdrawn From Magellan in May

Investors withdrew more than $1 billion from Fidelity’s Magellan Fund last month, according to a report by a company that monitors the mutual fund giant.

The report, published Wednesday by Alpha Equity Research, said investors were reacting to bad publicity about Magellan, which switched managers in May and has lagged many market indexes this year.

The Magellan Fund’s assets stood at $55 billion at the end of May, down from $56 billion at the beginning of the month. Altogether, Fidelity’s funds gained $2 billion in equity money in May, according to Portsmouth, N.H.-based Alpha Equity.

Fidelity is the country’s largest investment company, controlling about 14% of the mutual fund business. The fund has gained about 2% so far this year, compared with an 8.6% increase in the Standard & Poor’s 500, a popular market index.

Much of its recent under-performance can be attributed to a decision by former Magellan Fund manager Jeffrey Vinik to invest heavily in bonds; 19.2% of the fund’s total assets were in bonds at the end of April. Vinik resigned May 23.