Thursday, April 19, 2007

Unease at Fidelity? - WSJ

One thing which sort of quietly astonished me, several months ago, when I last looked, was the paucity of Fidelity funds coming up at Morningstar when I screened for "Fidelity" and "5 stars". After counting out the plethoras of share classes and marketing variations, there just were not as many as I would have expected. They do have some! But given the presence Fidelity has in the industry, and the huge number of funds Fidelity operates -- I refuse to count my way through all those share classes, etc. -- and the immense amounts of money they manage, where were the standout funds? Where are the category killers? When you review Morningstar's "Analyst Picks", at this date you see eleven Fidelity funds, six of which are bond funds. What does that say?

Fidelity obviously has the resources, commitment, decent people, and the brainpower to be a performance leader -- and they are indeed committed to active management, even though they have some good indexed funds and ETFs. But if they cannot make active fund management work, and I mean really work, for the investors, then can it work for any firm with mega-gazillions under management? And if it cannot work, then is active management, at least with monster mutual funds, a false premise, or even as one financial advisor has rather unkindly labeled it, "a hoax"? That is, not at all just speaking of Fidelity, but for any firm with such massive funds to invest?

Now just for the record, I am not the one who referred to active management as a "hoax". That's chutzpah, to put it politely!

"For the third time in two years, Fidelity Investments announced a major shift at the top of its core money-management unit, signaling what analysts see as continuing unease with the mutual-fund giant's investment and asset-gathering performance."

Fidelity Again Shifts Course In Fund Unit - - $subscription only



At 12:53 PM, Blogger Richard Jennings said...

You can get free access to these morningstar articles from

I saw this on TV and thought it was a excellent tip!


Post a Comment

Links to this post:

Create a Link

<< Home