Vinik, Fidelity Still Going Opposite Ways

Jeffrey Vinik and his former employer, Fidelity Investments, may still be going their separate ways--at least when it comes to tech stocks.

Vinik, former manager of Fidelity’s flagship Magellan Fund, rushed back into the market in the quarter ended June 30, raising the stock investments in his hedge fund by $4 billion and loading up on technology shares in particular, according to regulatory filings released Wednesday.

Meanwhile, Fidelity, the biggest U.S. mutual fund company, sold a net $4.6 billion worth of tech stocks in the quarter, continuing a trend that began at the start of the year.

Vinik Asset Management had $4.9 billion in 268 stocks--from all sectors--at the end of June, compared with just $800 million in 62 stocks at the end of March, according to Securities and Exchange Commission reports.

The hedge fund listed assets of $2.8 billion, meaning Vinik borrowed against his holdings to build the nearly $5 billion in positions. He bought shares of Rational Software Corp. and semiconductor equipment makers Applied Materials Inc., Teradyne Inc., KLA-Tencor Corp. and Novellus Systems.

“He went on a buying spree,” said Fred Hult, research analyst at New York-based Carson Group, which tracks SEC filings. About 50% of his portfolio was in high-tech hardware at the end of June.

Vinik is known for active trading, so his fund may look different today than it did at the end of the quarter. Fidelity’s holdings could also have shifted, of course.

Vinik got off to a slow start in 1999, as net assets climbed 1% through April. But since then performance has taken off, and the fund posted gains of about 20% through the end of July.

Boston-based Fidelity, meanwhile, cut its holdings of America Online Inc., Texas Instruments Inc., Oracle Corp. and Intel Corp.

“Fidelity is clearly rotating money out of tech stocks and into other sectors where fund managers see better value,” said Hult.

Fidelity seems to be betting on a strengthening economy, as it used sale proceeds to buy shares of economically sensitive companies such as Alcoa Inc. and DuPont Co.