FMR LLC Profile
Fidelity was founded in 1946 by Edward C. Johnson II, whose business strategy was to take risks and buy stocks with growth potential. He believed that mutual funds should rely on an individual’s decisions and put Gerry Tsai in charge of the Fidelity Capital Fund in 1957, who came to manage over $1 billion by the time he left in 1965. Edward’s son Edward C. Johnson III (Ned) joined the company in 1957 and was prepared to become the next president. By the time Ned took over in 1972, The Trend Fund, which Ned had managed, the Magellan Fund, which would become the largest mutual fund in the world, and the DMR Investment Management Service Inc. had been established. In 1974 the Fidelity Daily Income Trust was established, a successful and revolutionary money market fund that was the first to offer check writing. To cut costs, Ned vertically integrated the company and switched to direct sales. Investing in talents and building an infrastructure to prepare Fidelity for further growth. Fidelity became the first major financial institution to offer discount brokerage service, enjoying a period of high growth in the 1980s with assets increasing from $3 billion to $13 billion. As the company grew and added more and more products and services such as The Tax-Exempt Money Market Trust (the first tax-free money market fund) and Ultra Service Account, the company create several subsidiaries who all had presidents that reported directly to Fidelity. Fidelity, especially the Magellan Fund which kept very little liquid capital, was hit hard by the stock market crash in 1987. Ned cut a third of the personnel and focused on expanding the company’s international presence. Fidelity would recover and experience a period of large growth, with assets totally $258 million by 1993 with a client base of over 16 million. Fidelity kept its strategy on promoting trailblazing individuals and based its growth on constant innovation and research, creating technologies such as wireless trading platforms in the 1990s. By the turn of the millennia, Fidelity had surpassed $1 trillion in assets under management, continuing to launch new innovative services. Some of its most notable mutual funds include the Blue Chip Value, Value Discovery and Mid/Large Cap Stock Funds, and some of its most notable ETFs include the iShares MSCI Japan, MSCI EAFE Small-Cap ETF, and Core MSCI EAFE. In 2014, Abigail Johnson became the new CEO of Fidelity.