The $37.6 billion Magellan, run by Harry Lange, also dumped Citigroup Inc from the portfolio and cut its holdings of rival commercial bank JPMorgan Chase in June, according to data on Fidelity's website posted on Wednesday.

Privately owned Fidelity is the world's biggest mutual fund company and manages $1.5 trillion in assets. Portfolio changes by its key managers are closely watched.

The fund's holdings of AIG jumped to $865.1 million at the end of June, when it became its sixth-biggest holding, from $475 million at the end of May. Lange appears to have taken advantage of AIG's 27 percent drop in the U.S. insurer's shares last month as it battled concerns on credit losses and saw a management change.

Lange was not immediately available for comment. Fidelity said it does not comment on funds' holdings.

Magellan also trebled its holdings of Goldman to $525 million at the end of June from $176.4 million a month earlier. Goldman shares were down more than 8 percent by mid-June from the end of May, but recovered to close the month down just 0.9 percent.

The fund sold out of its Citigroup holdings in June, which were valued at $328 million at the end of May. Its holdings of JPMorgan fell by two-thirds to $154.4 million at the end of June from $408.5 million a month earlier. JPMorgan shares fell 20 percent in June.

Magellan showed a $138.7 million holding of Lehman Brothers shares as of the end of June. A month ago, it had $217 million of Lehman convertible securities.

The fund's financial sector exposure rose slightly to 10.3 percent of the total portfolio at the end of June from 10.1 percent a month earlier.

(Reporting by Muralikumar Anantharaman, editing by Maureen Bavdek)