In a rare public appearance, Abigail Johnson, chief of mutual funds at Fidelity Investments, took aim last night at hedge funds and new regulations aimed at her industry, while urging investors to stay in the market for the long term.
Johnson, the daughter of Fidelity chairman Edward C. ”Ned” Johnson III and the 19th wealthiest American, said investors would be making a mistake to abandon mutual funds now despite what she called ”the dramatic bursting of the stock market bubble.”
She argued that the average investor who holds funds in a retirement plan at work would have lost more in stocks during the bear market than in funds. One in five US stocks lost 60% of their value last year, she said, while only a relatively small number of mutual funds fell that sharply.
Johnson said mutual funds are likely to remain the main vehicle American workers use to build nest eggs, despite the rise in popularity of unregulated hedge funds and separate accounts for the wealthy.
”I believe mutual funds can compete very successfully with hedge funds and separate accounts,” Johnson said before a conference of the Society of American Business Editors and Writers in Cambridge.