20 Pages Posted: 14 Oct 2003
CASE SETTING: 1996, Investment Management, USA
This case examines the issues surrounding Jeff Vinik's departure from Fidelity Magellan in 1996. The case was developed for an MBA course in equity portfolio management, but it has also been used effectively in advanced undergraduate classes in Investments. In the second half of 1995, Jeff Vinik dramatically changed the asset allocation strategy of Fidelity Magellan, then the largest mutual fund in the world. Vinik, anticipating a market downturn, sold most of Magellan's large technology position and moved those assets into bonds and cash. When the anticipated correction did not occur, Magellan significantly underperformed the S&P 500 index. In the aftermath of the asset allocation decision, Vinik left Fidelity.
The case is particularly effective for getting the students to discuss issues in the investment management industry. The case has proved successful at stimulating class discussion, so it is important for the professor to determine beforehand which elements of the case to focus on.
Allocation, Legal Issues
Keywords: Mutual Funds, Institutional Trading, Asset
Suggested Citation: Suggested Citation
Irvine, Paul J., Jeff Vinik at Fidelity Magellan. Terry College of Business Case No.: FINA 03-01; Teaching Note No.: FINA TN 03-01. Available at SSRN: https://ssrn.com/abstract=458080