Fidelity Investments' Aum: Performance And Strategy Analysis

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. It is one of the largest asset managers in the world, with $5.8 trillion in assets under management (AUM) and $15 trillion in assets under administration (AUA) as of September 30, 2024. The company has a diverse range of businesses and offers a wide range of financial products and services to its customers. Fidelity's AUM includes discretionary assets such as mutual funds and exchange-traded funds (ETFs), which totalled $5.3 trillion as of the second quarter of 2024. The company has a strong focus on research and innovation, with a global network of nearly 400 research professionals.

Fidelity's total assets under administration

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. It is one of the largest asset managers in the world, with $5.8 trillion in assets under management (AUM) and $15 trillion in assets under administration (AUA) as of September 30, 2024.

Fidelity Investments operates a major brokerage firm and has investor centers in over 140 locations across the U.S. The company has over 52 million individual customers, nine million clearing and custody accounts, and more than 215 investor centers in the U.S. It also has a presence in Canada and Europe.

Fidelity's Asset Management division is dedicated to delivering the best customer experience in the financial services industry. The division offers a range of client solutions, from traditional mutual funds and ETFs to managed accounts and institutional mandates. As of September 30, 2024, Fidelity reported total discretionary assets of $4.4 trillion.

Fidelity's first quarter 2024 assets under administration demonstrate the company's significant presence and scope in the financial services industry.

Discretionary assets

Discretionary investment management is a form of investment management where buy and sell decisions are made by a portfolio manager or investment counsellor for the client's account. The term "discretionary" indicates that the investment decisions are made at the portfolio manager's discretion. This means that the client must have complete trust in the capabilities of their investment manager. Discretionary investment management is tailored to high-net-worth individuals and institutional investors, such as pension funds, as these accounts have higher minimum investment requirements, often starting at $250,000.

Fidelity Investments, an American multinational financial services corporation, offers discretionary investment management through its Fidelity Wealth Services. As of September 30, 2023, Fidelity had $4.4 trillion in discretionary assets under management. The company provides a range of investment products and services, including mutual funds, exchange-traded funds (ETFs), bonds, and separately managed accounts (SMAs).

Fidelity's asset management division combines extensive research capabilities and a collaborative approach to offer investment choices across asset classes to meet the diverse needs of its clients. With its global presence and diverse businesses, Fidelity gains insights into the entire market and has the stability and scale to make long-term decisions. The company's goal is to make financial expertise accessible, helping individuals, businesses, and institutions achieve their financial goals.

Mutual funds

Fidelity Investments, formerly known as Fidelity Management & Research (FMR), is an American multinational financial services corporation based in Boston, Massachusetts. Established in 1946, the company is one of the largest asset managers in the world, with $5.8 trillion in assets under management (AUM) and $15 trillion in assets under administration (AUA) as of September 2024.

Fidelity's total AUA increased by $2 trillion from the second quarter of 2023 to the first quarter of 2024. Of these assets, $5.3 trillion was for 'discretionary assets', including mutual funds and exchange-traded funds (ETFs).

Fidelity Investments operates a major brokerage firm and offers a wide range of mutual funds covering all asset classes, from domestic equity to specialized sectors. The company's largest equity mutual fund is the Fidelity Contrafund, with $107.4 billion in assets, making it the largest non-indexed fund in the U.S. and the largest fund managed by an individual. The fund has been managed by William Danoff since 1990.

Fidelity also offers a line of zero-expense-ratio mutual funds for individual investors, with the ZERO Total Market Index Fund and ZERO International Index Fund each growing to over $1 billion in assets. These zero-expense funds provide market exposure to more than two-thirds of industry index assets.

In addition to its mutual funds, Fidelity provides fund distribution and investment advice, retirement services, index funds, wealth management, securities execution and clearance, asset custody, and life insurance. The company has a global presence with investor centers in over 140 locations across the U.S. and offices in several countries, including Canada, Germany, Belgium, Italy, France, Spain, Switzerland, Ireland, and the UK.

Exchange-traded funds

ETFs are considered a more affordable and potentially tax-efficient way to access a broad range of asset classes. They combine the trading versatility of individual securities with the diversified qualities of mutual funds to meet a variety of investment needs. ETFs typically have lower operating expense ratios (OERs) than actively managed mutual funds.

Fidelity Investments, one of the largest asset managers in the world, offers a wide range of investment options, including mutual funds, exchange-traded funds (ETFs), bonds, collective investment trusts (CITs), and more. As of September 2024, Fidelity had $5.8 trillion in assets under management (AUM) and $15 trillion in assets under administration (AUA).

Fidelity launched its first ETF in 2003, called the Fidelity Nasdaq Composite Index Tracking Stock Fund (ONEQ). In March 2021, the company filed for introducing a Bitcoin ETF with the SEC, which was approved and launched on January 11, 2024. In June 2023, Fidelity also applied to launch a Spot Ethereum ETF.

Fidelity's asset management division offers investment options across various asset classes, including mutual funds, ETFs, bonds, CITs, managed accounts, and separately managed accounts (SMAs). The company has a global presence with operations in 11 countries and serves customers through 216 Investor Centers in the US and 14 regional sites worldwide.

Investment-grade bond assets

Investment-grade bonds are corporate and government debt that bond rating agencies judge as very likely to be paid back, with interest. They are considered lower-risk investments and are more likely to be repaid, making them a good fit for conservative portfolios seeking diversification or income.

The major credit rating agencies—Fitch, Moody’s and Standard & Poor’s—evaluate bonds and assign investment-grade bonds ratings of BBB- (Standard & Poor’s and Fitch) or Baa3 (Moody’s) or better. These ratings indicate that the bonds are lower risk.

Fidelity Investments, one of the largest asset managers in the world, offers a range of investment-grade bond assets through its Fixed-Income division, headquartered in Merrimack, New Hampshire. Fidelity's asset management division combines extensive research capabilities and a collaborative approach to offer investors a wide range of investment options across asset classes.

Advantages

• Less risky than stocks: Bonds generally don’t experience the same volatility or price fluctuations as stocks, so the value of investment-grade bonds is more likely to remain constant on a day-to-day basis.
• Income generation: Investment-grade bonds produce a regular, reliable income stream, making them attractive to income investors and retirees. While certain stocks offer dividends, these payments aren’t guaranteed like bond interest payments.
• Higher yields than other fixed-income alternatives: Investment-grade bonds tend to have higher yields than treasuries or municipal bonds. The longer-term average yield for investment-grade corporate bonds is 2%, compared to 1.3% for municipal bonds.

Disadvantages

• Lower returns than stocks: Historically, bond yields have been lower than stock returns. Investing too much in bonds can make it more difficult to meet retirement or other investment goals.
• Less liquidity: Directly investing in bonds may result in a lack of flexibility as bonds typically need to be held until their maturity date. Selling on the secondary market may also result in a loss.
• Less transparency: Most corporate bonds are traded over-the-counter (OTC), resulting in less transparent pricing. This increases the risk of overpaying and is why financial advisors recommend most investors stick to bond funds rather than individual bonds.
• Potentially high buy-ins required: Most bonds are issued in $1,000 increments, requiring large capital for those looking to invest in individual bonds.

In summary, investment-grade bond assets provide reliable cash flows with lower levels of risk, making them suitable for conservative investors, income investors, and retirees seeking to balance their portfolios.

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