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November 21, 2016 at 01:12 PM
Abigail Johnson is taking full control of Fidelity Investments as the money management giant faces intense competition for assets and clients from rivals including Vanguard Group and BlackRock Inc.
Johnson, 54, will succeed her father, Edward “Ned” Johnson, as chairman of the family-run firm in early December, the Boston-based company said Monday. She has been chief executive officer since 2014 and will maintain that role. Edward, 86, is retiring and will become chairman emeritus.
Under Abigail, Fidelity — the manager of $2.1 trillion in assets — has been seeking to increase client deposits after losing market share to low-cost index providers such as Vanguard, the biggest mutual fund company. In 2010, Fidelity lost its crown as the largest U.S. mutual fund company by assets. It’s also contending with a trend that’s roiling the industry: customers shunning actively managed funds for low-cost passive investments such as index funds.
In the first 10 months of the year, active equity funds experienced $287.7 billion in net outflows as passive funds reeled in $123.1 billion, according to Morningstar Inc. At Fidelity, the pattern has been much the same. The company had net redemptions of $43.3 billion in active funds while it added $28.8 billion to its passive products.
