Fidelity Management And Research

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), owned by FMR LLC and headquartered in Boston, Massachusetts, provides financial services. Established in 1946, the company is one of the largest asset managers in the world, with $5.8 trillion in discretionary assets under management, and $15.1 trillion in assets under administration, .

Fidelity operates a brokerage firm, manages mutual funds, provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance. It offers brokerage clearing and back office support and software products for financial services firms. It also offers a donor-advised fund, Fidelity Charitable, for clients seeking to donate securities. It processes 3.5 million daily average trades. It is one of the largest providers of 401(k) plans and manages employee benefit programs for more than 28,800 businesses.

Abigail Johnson, granddaughter of founder Edward C. Johnson II, and her family and their affiliates own a roughly 40% interest in the company. The remainder is owned by current and former executives.

History

The Fidelity Fund incorporated in Massachusetts on May 1, 1930, with Edward C. Johnson II serving as president. The corporate structure changed in 1946 and became known as Fidelity Management & Research (FMR).

In 1969, the company formed Fidelity International Limited (FIL) to serve non-U.S. markets and subsequently spun it off in 1980 into an independent entity owned by its employees.

In 1982, the company began offering 401(k) products. In 1984, it offered computerized stock trading.

In 1991, Fidelity launched the first commercial donor-advised fund.

In 1995, Fidelity became the first mutual fund company to offer a webpage.

In 1997, Robert Pozen was named CEO.

In 2001, Geode Capital Management was established to run and incubate investment strategies for FMR. In 2003, it was spun off as an independent company.

In September 2003, the company launched its first exchange-traded fund, the Fidelity Nasdaq Composite Index Tracking Stock Fund (ONEQ).

In 2007, the company changed its legal structure to a limited liability company; FMR LLC became the owning entity.

In 2010, Fidelity Ventures, its venture capital arm, was shut down, and many of the employees created Volition Capital.

In 2011, Fidelity changed the name of its international division from Fidelity International to Fidelity Worldwide Investment and a new logo was introduced.

In 2012, the company moved its Boston headquarters to 245 Summer Street.

In 2014, Abigail Johnson became president and CEO of Fidelity Investments (FMR) and chairman of Fidelity International (FIL). She reduced dependence on open-ended mutual funds, instead having the company focus on financial advice, brokerage services, and venture capital.

In October 2018, Fidelity launched Fidelity Digital Asset Services, a separate entity dedicated to institutional cryptoasset custody and cryptocurrency trading.

In August 2018, Fidelity introduced mutual funds with no mutual fund fees and expenses.

In May 2019, Fidelity launched cryptocurrency trading to institutional customers.

In September 2019, Fidelity completed the corporate spin-off of Eight Roads Ventures, its venture capital division. It was known as Fidelity Growth Partners until 2015. In 2018, Eight Roads launched a $375 million European fund.

In August 2021, Fidelity announced plans to hire 16,000 employees in 2021, including 9,000 during the second half of the year.

In April 2022, Fidelity announced that it will start offering Bitcoin as an investment option in 401(k) plans to participants whose employers have elected to include it in their plan.

In January 2024, after receiving approval, Fidelity was one of several issuers that launched a spot Bitcoin exchange-traded fund (ETF).

In July 2024, after receiving approval, Fidelity was one of several issuers that launched a spot Ethereum exchange-traded fund.

In April 2025, Fidelity launched no-fee cryptocurrency trading in individual retirement accounts.

Notable mutual funds

Fidelity has three fund divisions: Equity (headquartered in Boston, Massachusetts), High-Income (headquartered in Boston) and Fixed-Income (headquartered in Merrimack, New Hampshire).

Fidelity Contrafund

The company's largest equity mutual fund is Fidelity Contrafund, which has $145 billion in assets, making it the largest non-index fund in the U.S. and the largest fund managed by an individual. William Danoff has managed Contrafund since 1990.

Fidelity Magellan

Fidelity Magellan has $25 billion in assets. Its current manager is Jeffrey Feingold, who also manages the Fidelity Trend Fund. Founded by Ned Johnson in 1963 as the Fidelity International Fund during what Peter Lynch called the "great fund boom", it was renamed the Magellan Fund in 1965. As Lynch recounted, the early sales staff of the Magellan Fund was mostly part-time, traveling employees until the 1973–1974 stock market crash led to a severe decline in interest.

Magellan was managed by Johnson from May 2, 1963, to Dec. 31, 1971, Lynch from May 31, 1977, to May 31, 1990, and Harry W. Lange from 2005 to 2012. Under Lynch's leadership Magellan averaged 29% a year, more than doubling the growth rate of the benchmark S&P 500, and remains the best-performing mutual fund in history over such an extended period.

Devonshire Investors

The company's Devonshire Investors arm is a division that gives the owners of the company the ability to make other investments outside its funds.

Investments include:

* Seaport Center and 2.5 million square feet of office space in Boston.

* COLT Telecom Group

Former investments include:
* MetroRed

* Community Newspaper Company, the largest chain of newspapers in suburban Boston, Massachusetts, sold to the ''Boston Herald'' in 2000 and now owned by GateHouse Media.

* Fidelity paid $1.14 billion for Lanoga, the third-largest U.S. professional materials dealer, and $548 million for Hope Lumber, an Oklahoma-based supplier of trusses and other wood products.

* In 2013, it sold Boston Coach, a limousine and black-car service, founded in 1985 by Ned Johnson after waiting too long for a taxi, to Harrison Global.

* It formed ProBuild in 2006 and sold it to Builders FirstSource in 2015.

Legal issues and controversies

Conflict of interest with employee/owners' personal investments

Owners and employees of the company are able to invest in pre-IPO startup companies via the company's subsidiary, F-Prime Capital Partners. An investigation by ''Reuters'' in 2016 identified multiple cases where F-Prime Capital Partners was able to make investments in shares at a fraction of the price later paid by funds managed by Fidelity Investments. Because of regulations, the funds are not allowed to make the same early venture capital investments as F-Prime Capital Partners. However, the funds allegedly made large investments in companies after they go public in which shares are already owned by Fidelity employees via F-Prime Capital Partners. An example included William Danoff's personal purchase of shares of Alibaba Group for 7 cents each; many shares were later purchased by the fund he manages. While the practice is not illegal, it poses a corporate conflict of interest. The same Reuters investigation documents six cases (out of 10) where Fidelity Investments became one of the largest investors of F-Prime Capital companies after the start-up companies became publicly traded. Legal and academic experts said that major investments by Fidelity mutual funds - with their market-moving buying power - could be seen as propping up the values of the investments made by F-Prime Capital, to the benefit of Fidelity insiders.

Document retention fines

In February 2007, the NASD, a division of the Financial Industry Regulatory Authority, fined four FMR-affiliated broker-dealers $3.75 million for alleged registration, supervision and e-mail retention violations. The broker-dealers settled without admitting or denying the charges.

In 2004, Fidelity Brokerage paid $2 million to settle charges by the U.S. Securities and Exchange Commission that employees altered and destroyed documents in 21 of its 88 branch offices between January 2001 and July 2002. Fidelity has internal inspections every year to make sure it is complying with federal regulations. Management was accused of pressuring branch employees to have perfect inspections and gave notice of the inspections and that at least 62 employees destroyed or altered potentially improper documents maintained at branch offices including new account applications, letters of authorization and variable annuity forms.

Misrepresentations

In May 2007, NASD fined two Fidelity broker-dealers $400,000 for preparing and distributing misleading sales literature promoting Fidelity's Destiny I and II Systematic Investment Plans, which were sold primarily to U.S. military personnel. As part of the settlement, the FMR affiliates were required to notify Destiny Plan holders who want to increase their investments in existing Destiny Plans that additional shares of the underlying fund can be purchased outside the Destiny Plans without paying the additional sales charges.

Employee stealing

In 2025, the company was fined $600,000 by the Financial Industry Regulatory Authority for lax supervision after an employee stole $750,000 from the accounts of 37 international clients over an eight year period from 2012 to 2020.

Accepting gifts from brokerages

In December 2006, the company was fined $42 million after some employees accepted gifts from salespeople of Jefferies Group in violation of the company's policies. The firm was fined an additional $3.75 million in February 2007 and $8 million in 2008. Gifts included private chartered flights, tickets to the 2004 Super Bowl, Wimbledon Championships and the US Open tennis tournament; tickets to Justin Timberlake, U2, and Christina Aguilera concerts; and high-end wines such as 1993 Château Pétrus.

Marketing

Paul McCartney marketing campaign

Fidelity has experimented with marketing techniques directed to the baby boomer demographic, releasing ''Never Stop Doing What You Love'', a compilation of songs by Paul McCartney. McCartney became the firm's spokesman in 2005 in a campaign entitled "This Is Paul". On the day of the disc's release, company employees were treated to a special recorded message by Paul himself informing them that "Fidelity and ehave a lot in common" and urging them to "never stop doing what you love".

See also

* List of US mutual funds by assets under management
* Mutual funds:
** Fidelity Contrafund
** Fidelity Magellan
* Fidelity International
* Mutual fund fees and expenses
* Wealth Lab
* Asset management in Singapore
* '' Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning'', a 2016 Supreme Court case involving naked short selling claims against National Financial, a subsidiary of Fidelity, Merrill Lynch, and others.

References

External links

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1946 establishments in Massachusetts
Companies based in Boston
American companies established in 1946
Financial services companies established in 1946
Financial services companies of the United States
Privately held companies of the United States
Investment management companies of the United States
Multinational companies headquartered in the United States
Mutual funds of the United States
Online brokerages
Online financial services companies of the United States
Privately held companies based in Massachusetts
Fidelity International
Asset management companies