Mutual funds and stock brokerage

Fidelity is a privately held company founded and controlled by the Johnson Family. Fidelity Management & Research Company, the investment management division of Fidelity Investments, acts as the investment adviser to Fidelity's family of mutual funds. FMR Company has three fund divisions: Equity (Boston), High-Income (Boston) and Fixed-Income (Merrimack, N.H.). Actual day-to-day management of these funds is subcontracted by that company to one or more of its subsidiaries. The company's subsidiaries serve as distributors and transfer agents to the entire Fidelity fund family

Fidelity Investments serves more than 21 million investors through individual and institutional accounts, with more than 300 different funds. Revenues in 2005 were $11.1 billion, up 10 percent compared to 2004. Assets under management rose nine percent to $1.2 trillion at the end of 2005.

The company's two largest mutual funds are Contrafund and Magellan, both with more than $50 billion in assets. The Magellan Fund was for many years the largest in the United States. It was run by Ned Johnson (May 2, 1963 to Dec. 31, 1971) and Peter Lynch (May 31, 1977 to May 31, 1990). Its current manager is Harry Lange, who previously managed the Fidelity Capital Appreciation Fund. The current manager of Contrafund is Will Danoff.

Fidelity Investments also operates a major online discount brokerage and has investor centers in about 100 cities throughout the US and Canada, as well in Europe and Asia.

Benefits outsourcing

In addition to its mutual fund and brokerage businesses, Fidelity also has a strong presence in the HR and benefits outsourcing business. Fidelity Employer Services Company is the largest provider of 401(k) retirement plan services in the country. Other services provided include pension administration, health & welfare administration, as well as payroll and other HR record-keeping services.

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Other businesses

Fidelity Investments also owns many unrelated businesses, including a charter motor coach service, a luxury hotel, and a temporary employment agency. It formerly owned a large chain of suburban-Boston newspapers, since sold to the publisher of the Boston Herald.

Ownership and operations

The founding Johnson family controls most of Fidelity. Edward "Ned" C. Johnson 3rd is chairman of the group. His daughter, Abigail Johnson, was once the largest single shareholder with about 25%, but in October 2005, it was reported that she had sold a "significant" portion of her shares to family trusts, and that there are doubts as to whether she is still in line to succeed her father. [2]

The Fidelity mutual funds are organized as Massachusetts business trusts tied to the lifetime of the Johnsons. Some of Fidelity's best known fund managers also own a share in the company, most notably Peter Lynch.

Revenue in 2003 were US$9.2 billion, followed by US$10.5 billion in 2004. As of 2003 Fidelity had 29,424 employees.

Fidelity's corporate headquarters are located in Boston, Massachusetts, with the largest U.S. operations located in Massachusetts, New Hampshire, Rhode Island, North Carolina, Westlake/Dallas Texas, Ohio, Kentucky, and Utah. Fidelity's international offices include its UK Headquarters, located in Hildenborough, Kent, as well as offices in Toronto, Montreal, Calgary and Vancouver, Canada. Fidelity in 2006 is in the process of opening a large site in Jacksonville, Florida, to serve as a customer service center similar in size to its New Hampshire site.

Innovative marketing

Fidelity has experimented with innovative marketing techniques directed to the aging baby boomers, recently releasing Never Stop Doing What You Love, a not-for-resale compilation of songs by Paul McCartney, created for Fidelity's employees and clients. The ex-Beatle became the the firm's new 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 [he] have a lot in common" and urging them to "never stop doing what you love". ^[1]

Competitors

Fidelity's largest competitors include T. Rowe Price, The Charles Schwab Corporation, Merrill Lynch and The Vanguard Group.

See also

• List of mutual-fund families

References

1. ^ Jenn Abelson, Brand on the run: Struggling Fidelity turns to ex-Beatle to lure boomers." Boston Globe, September 8, 2005, [1], accessed on August 16, 2006.

• "Fidelity profits soar 23 percent". (Feb. 25, 2005). Boston Business Journal.
• "Profit at Fidelity rockets 20% in 2005". (Mar. 3, 2006). Boston Globe.

External links

• Corporate website
• Corporate retirement website
• Fidelity Investor website
• Fidelity Funds Profile
• Yahoo! - FMR Corporation Company Profile at Yahoo!
• Fidelity Hires Hedge Fund Pro, October 24, 2005