Fidelity shrugs off equity outflows with improved profits

Fidelity Investments has reported profits of £3.8bn in 2017, even as investors pulled £34bn out of its equity funds.

The investment group said operating income had jumped 54 per cent from 2016 in a year which saw global stock markets reach record highs.
Fidelity said improved performance from its fund managers had helped boost results after a “challenging” 2016.
On aggregate, Fidelity’s mutual funds beat 78 per cent of their industry peers in the year with all major divisions beating their benchmarks on an asset-weighted basis – but even that couldn’t stop investors pulling money out of its actively managed funds.
Despite that, the group’s assets grew by 15 per cent to almost £1.8trn in the year as investors poured money into low-cost tracker funds.
Chief executive Abigail Johnson said it showed investors were “looking for exposure to different types of investment vehicle”.
Fidelity’s asset management arm president Charles Morrison says: “After a challenging 2016, this outperformance – as well as the three-and five-year outperformance for equity and other categories – highlighted how investors can be rewarded by taking a long-term view when investing in actively managed strategies.”
Fidelity, which is based in Boston, is privately owned by the Johnson family who founded the firm in 1946.



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