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Fidelity Plans to Merge 3 Funds, as Assets Hit $3.5T

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Fidelity Investments’ discretionary assets reached $3.5 trillion in the third quarter ended Sept. 30, up 17% from last year. Its assets under administration jumped 13% to $8.8 trillion.

Meanwhile, the asset manager says it’s filed documents with regulators to close three funds to new investors as part of its plans to merge the $4 billion Fidelity Independence Fund with the nearly $20 billion Fidelity Magellan Fund, the Fidelity Export and Multinational Fund with its Fidelity Fund (focused on large-cap growth holdings), and the Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund with its Fidelity Emerging Markets Fund, as first reported by CityWire.

The fund giant expects to make further regulatory filings for the proposed mergers in December.

If all proceeds as usual, the mergers could take effect as early as the second quarter following approval by the shareholders of the smaller funds to be merged. In all cases, their successors  have better performance and lower fees.

Trading by Fidelity investors more than doubled from the year-ago quarter, growing 97% to hit 2.2 million daily average trades (or DATs) in Q3, it said Monday. Meanwhile, new RIA client accounts rose 164% from a year ago, and managed account assets surpassed $500 billion, according to the firm.

In comparison, rival broker Charles Schwab had assets — including those recently acquired from TD Ameritrade — of nearly $5.9 trillion as of Oct. 31 after ending Q3 with $4.4 trillion in assets, up 17% from a year ago (before it added assets through the acquisition).

That put Schwab behind, but getting closer to, the $7.8 trillion that BlackRock said it had as of Sept. 30 and Vanguard’s $6.3 trillion as of Oct. 31. State Street had $3.1 trillion in assets under management as of Sept. 30.

(State Street’s total assets under custody and/or administration was $36.6 trillion, just behind that of BNY Mellon at $38.6 trillion.)

Hiring Spree Continues

Fidelity, which is privately owned, hired more than 5,000 associates in 2020, through Q3, “to stay ahead of unprecedented customer growth and engagement,” it said Monday. That was up 38% from a year ago and was up from more than 2,000 in Q2.

The new staff includes all U.S. full-time roles from financial advisors and licensed representatives to customer service representatives and technology positions, according to the company.

Fidelity expects to “add 4,000+ new client-facing positions in the next six months,” it said.

“Customers across all of our businesses have been contacting Fidelity in record numbers in 2020 to help them navigate their own situations amidst market uncertainty and economic volatility,” according to Abby Johnson, Fidelity CEO and chairman. That is “driving us to expand our hiring now and into 2021,” she said in a statement.