Jeffrey N. Vinik, the embattled manager of Fidelity's Magellan fund -- with $55 billion in investments the biggest mutual fund in America -- quit after three years today, saying it seems "the right time" to launch his own money management company.

Mutual fund analysts and sources who have spoken with Vinik recently said that his retreat was caused by months of controversy surrounding Magellan's investment performance and his conduct as a fund manager.

They said Vinik -- a protege of Peter Lynch, the man who made Magellan a star performer -- was frustrated that he had not soundly outperformed the stock market recently and that Vinik felt it was increasingly difficult for him to beat the market. Shareholders of the Magellan fund have basically seen few gains in the past eight months, while the broader market as measured by the Standard & Poor's 500-stock index has risen about 20 percent. In addition, they said that Vinik was no longer enjoying the job. Other analysts cited the controversy surrounding Vinik's public comments and personal stock trades.

"I don't believe poor performance caused him to quit," said Jeff Kelley, senior editor of Morningstar Mutual Fund, a publication that tracks mutual funds. "I think it has been more the controversy over his ethics."

Fidelity Investments and others say he left voluntarily, and its chairman, Edward C. Johnson III, said in a statement that he was sorry to see Vinik leave. "I know I speak for Jeff's many colleagues at Fidelity in wishing him the best in the future," Johnson said. Vinik declined to comment.

Eric Kobren, executive editor of Fidelity Insight, a newsletter that tracks Fidelity funds, said, "He jumped on his own volition. . . . I talked to him today -- he sounded great. While he denies the bad press had anything to do with this decision, it had to have taken a toll. He and his family see going out on his own as an opportunity to do what he does best and not be in the limelight."

Indeed, Vinik's position in the mutual fund world put him under an unusual spotlight in the past year -- some of which he brought on himself. While he spoke out last fall in favor of certain technology stocks held by Magellan, he was quietly selling them, according to private Fidelity documents reviewed by The Post. As one of the leading investors in the world, his comments can move the market when other traders act to mimic his moves. Vinik's remarks resulted in several lawsuits against him and Fidelity Investments and in a Securities and Exchange Commission examination of his comments.

Two years ago, the SEC's enforcement division also opened a staff investigation into personal trading by Fidelity fund managers, including Vinik, The Post reported last month. At issue was trading by portfolio managers in stocks their funds may have a stake in.

"I think he's had enough of this and is tired of being investigated," a government official said.

A spokeswoman for Fidelity, which has steadfastly denied the existence of any SEC examination or investigation, said today that the firm has been informed by the SEC that the examination into Vinik's public comments has been concluded and that no action will be taken.

The government official said that the SEC's investigation into personal trading by Vinik and other Fidelity fund managers is also unlikely to lead to further action. The SEC had no comment on either issue.

Vinik's departure is another sign that Fidelity, the largest mutual fund company with $442 billion under management in 238 funds, is undergoing a sea change in its approach to investing, analysts said.

Never before have so many Americans -- 38 million -- placed so much of their savings -- $3 trillion -- in mutual funds. That money has largely been the fuel powering the current bull market in stocks -- and therefore Americans' retirement nest eggs. And no modern investment firm has so dominated the U.S. stock market the way fund giant Fidelity Investments does today.

A new generation of aggressive investment managers controls where all that money gets invested. Vinik was, until today, the most powerful and influential of the new breed on Wall Street.

Noted for its high-turnover trading style, Fidelity has recently made internal changes to centralize and more tightly control its fund managers.

Fidelity officials say they have also established new rules governing personal trading by their portfolio managers, who for years were encouraged to trade for their own accounts, according to former fund managers. Vinik was one of the most active personal traders at Fidelity, trading as much as 500 times a year, according to sources who have reviewed his records.

At his own money management firm, Vinik will find far less public scrutiny -- and potentially a raise. Vinik is estimated by former colleagues to have earned $2.5 million to $5 million a year at Fidelity, whereas a top private investment manager can draw tens of millions a year if successful.

One former Fidelity manager said, "What took him so long?"

Two other Fidelity employees -- Michael S. Gordon, manager of the Retirement Growth fund, and William Copeland, an analyst -- also are leaving to join Vinik. Analysts said that the departures will by no means drain Fidelity's talent pool.

"There is a lot of talent at Fidelity. Their farm team is in place," said Morningstar's Kelley.

One former Fidelity analyst disagreed, saying, "Morale over there is not great. They are losing more good people than they are gaining."

Vinik is to be replaced in June by Robert E. Stansky, who now runs the Growth Company and the Advisor Equity Portfolio funds. Stansky is a longtime portfolio manager at Fidelity whose recent investment performance, according to Morningstar, has beaten both the broad market and Vinik's performance at Magellan.

Vinik will leave Magellan with a record inferior to the fund's two prior managers, Peter Lynch and Morris Smith, according to data from Morningstar Inc. Lynch, who was manager from 1977-90, and Morris, who was at the helm from 1990-92, both substantially beat the market when overseeing Magellan. Vinik has only edged the S&P 500 by 1 percent a year. CAPTION:THE VINIK ERA A look at how Fidelity Magellan performed when compared with the Standard & Poor's 500-stock index and the Dow Jones industrial average during Jeffrey Vinik's tenure as manager. July 1992: Jeffrey N. Vinik is named manager of Fidelity Magellan, the nation's largest single mutual fund. He replaces Morris Smith. January 1994: The Washington Post reports Fidelity is tightening rules on personal trading by fund managers. SEC looks into personal trading at Fidelity and other firms. First half of 1995: Magellan invests heavily in technology stocks. October and November: Vinik is publicly upbeat about Micron Technologies while selling the fund's stake in the stock. December: SEC opens examination of Vinik's public statements. April: Washington Post article examines personal trading by Fidelity managers, noting that 1994 investigation remains open. May: Business Week cover story questions Fidelity's performance. May 22: SEC Chairman Arthur Levitt Jr. tells fund industry to address personal trading issue. Yesterday: Vinik resigns; he is replaced by Robert E. Stansky.