New products help Fidelity Investments parent keep pace with rivals

By Ross Kerber (Reuters) - Fidelity Investments parent FMR LLC said its 2018 operating profit rose 18.6 percent to $6.3 billion as new products like no-fee index funds helped the Boston mutual fund firm counter falling markets and keep pace with bigger rivals. While total assets under management fell slightly, according to an annual report sent on Thursday by the closely held company, Fidelity reported record net deposits of $100.8 billion from customers across all its investment products. The inflow figure was striking at a time when other managers known for active funds have struggled to match the rush of money to index funds and other passive products from BlackRock Inc and Vanguard Group.

Reuters February 22, 2019 02:06:07 IST
New products help Fidelity Investments parent keep pace with rivals

New products help Fidelity Investments parent keep pace with rivals

By Ross Kerber

(Reuters) - Fidelity Investments parent FMR LLC said its 2018 operating profit rose 18.6 percent to $6.3 billion as new products like no-fee index funds helped the Boston mutual fund firm counter falling markets and keep pace with bigger rivals.

While total assets under management fell slightly, according to an annual report sent on Thursday by the closely held company, Fidelity reported record net deposits of $100.8 billion from customers across all its investment products.

The inflow figure was striking at a time when other managers known for active funds have struggled to match the rush of money to index funds and other passive products from BlackRock Inc and Vanguard Group.

BlackRock took in $123.6 billion in new deposits in 2018. It has roughly $6 trillion in assets under management -- more than twice Fidelity's size.

In a letter accompanying Thursday's report, Fidelity Chairman and CEO Abigail Johnson wrote that investors want a wider set of products and services.

"We also need to capitalize on new revenue models to counteract the margin erosion that comes from relentless competition in mature markets," she wrote.

Fidelity's asset management arm runs funds like Contrafund and Magellan. Net withdrawals among Fidelity's active stock funds were $53.2 billion in 2018, according to the report, offset by the $40.8 billion added to stock index products. Investors put $38.9 billion into managed accounts.

New money also included the $2.9 billion that investors added to the no-fee index funds Fidelity created last summer, part of a price war that has squeezed smaller asset managers.

Other new products included a sustainable bond index fund, trading and planning tools. Fidelity also operates business units in areas like retirement services and health care benefits.

Collectively the new products helped Fidelity grow its assets and add more households as customers, CEO Johnson wrote. She wrote the operating profit figure was a company record, as was revenue that rose 11.5 percent to $20.4 billion last year.

Total assets under management fell 1 percent to $2.42 trillion, Fidelity said. Net flows to Fidelity's platform, including to products it does not manage, were $309 billion, up 19.6 percent from 2017.

(Reporting by Ross Kerber; Editing by Dan Grebler and Lisa Shumaker)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.