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If any single entity embodies the runaway success of the mutual fund industry, it is unquestionably the Fidelity Magellan Fund.

With some $56 billion in its coffers, Magellan is twice as big as its nearest competitors - and comparable to a good-size bank.It has been hugely successful at making money for its shareholders, under legendary manager Peter Lynch in the 1980s and under Lynch's successors, including Jeff Vinik, who took over the helm in July 1992 and who has now announced plans to leave.

Magellan is the flagship of the biggest of all fund families, run by Fidelity Investments in Boston, which encompasses more than $375 billion from more than 9 million investors.

As the tallest tree in the forest, Magellan also has sometimes been a lightning rod for criticism and questions that have been raised as the fund industry continues its spectacular growth.

Years ago, when Magellan was much smaller than it is today, analysts began to debate how long the fund could continue to thrive under the weight of its own prosperity.

It has long been considered axiomatic in the fund business that stock funds get progressively more difficult to manage as they grow, losing flexibility and maneuverability.

But until very recently at least, Vinik kept Magellan's investment return ahead of benchmarks such as the Standard & Poor's 500-stock composite index, and the majority of competing stock funds as well.

For both the three-year and five-year periods ended March 31, Fidelity lists Magellan's average annual return at better than 15 percent.

"It still stymies its critics," the Morningstar Mutual Funds research service said in its latest report on Magellan. In 1993, Morningstar named Vinik "manager of the year."

But this year, the story has been less upbeat. Vinik, who had a heavy commitment to technology stocks for much of 1995, moved sharply away from that position last fall, and shifted a big chunk of the Magellan portfolio into bonds and short-term money market investments.

As of the end of March, according to a Fidelity publication, Magellan had just 70.7 percent of its assets in stocks, with 19.2 percent in bonds and 10.1 percent in short-term securities.

This amounted to a bet that the stock market would slow in its advance or possibly even turn downward. But instead, stocks have continued to soar this year, while bonds have struggled.

For the year to date through Wednesday, Magellan showed a return of 4.7 percent - less than half the 10.21 percent gain for the average stock fund reported by the research firm of Lipper Analytical Services Inc.

Meanwhile, Vinik was taking heat on some other fronts as well. News reports in late 1995 suggested that he might have spoken favorably to reporters about a stock that Magellan was actually selling at about the same time.

After looking into the situation, the Securities and Exchange Commission has apparently decided there was nothing in it that warranted any sort of formal regulatory proceedings.

In Fidelity's news release Thursday announcing the changes, Vinik said, "I have always hoped that some day I might have the opportunity to run my own money management firm. Now seems like the right time."

Robert Stansky, who was named by Fidelity to succeed Vinik as Magellan's manager, has long experience dealing with a large amount of money. For the past nine years, he has run the Fidelity Growth Company Fund, whose assets have climbed to $8 billion.

But even for Stansky, the high-profile, high-pressure job of running Magellan will be a big step up.