Vinik Trims U.S. Stock Holdings by $3 Billion

Jeffrey Vinik, former manager of Fidelity Investments’ flagship Magellan Fund, cut his U.S. stock holdings by about $3 billion, or 79%, during the first quarter, regulatory filings show.

Vinik’s fund, the $2.5-billion Vinik Asset Management, had $817 million in 62 U.S. stocks at the end of March, compared with $3.8 billion in more than 150 domestic equities at the end of 1998, according to Securities and Exchange Commission papers. Vinik sold his stakes in Intel Corp., Microsoft Corp. and Compaq Computer Corp., among others.

Paring his holdings didn’t help returns, which totaled 1% in the first four months of the year, investors said. After fees, Vinik’s fund climbed 45% in 1998, and 77% in 1997.

While at Fidelity, Vinik was known for active trading that could change much of the Magellan portfolio each quarter. In late 1995, for example, he started loading up on bonds and by early 1996 he had 19% of the then-$55-billion fund in U.S. Treasuries. The bond market soured and Magellan’s performance plummeted. Vinik resigned in May 1996 to start his own firm.

Vinik loaded up with gambling shares in the first three months of the year. Circus Circus Enterprise Inc. was a top holding, and Mirage Resorts Inc. and Harrah’s Entertainment Inc. were in his portfolio. Top holdings also included American Eagle Outfitters Inc. and Comverse Technology Inc.