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Well that reads like something put together between Fidelity's legal and marketing departments. Fidelity does a good job with index funds, but this is not a helpful press release.
I was hoping for something better organized, since I got a ton of emails last night about lots of Fidelity funds opening, yet they weren't up on the Fidelity website. This is not the "scorecard" I was looking for. The bottom line is that Fidelity has added a few index funds (notably Total Int'l, i.e. all world ex-US), and is now more amenable to selling through third party platforms.
Marketing: Instead of saying what Fidelity is doing, and then talking about the company (which seems to be the usual way of making financial announcements), it starts by saying how big and storied Fidelity is in the index fund space (really?). Then after describing the index fund changes, it goes on to say, but wait, Fidelity is really an active fund company that's doing so much better than its benchmarks. Say what?
Legal: Technically everything written is legally correct, because it walks a very narrow path. Fidelity is indeed the second largest index mutual fund manager. Let's deconstruct that.
If we include ETFs, which seem to be the preferred channel for index funds but are not legally mutual funds, then Fidelity falls behind such names as Blackrock and SSgA (SPDRs).
Manage - if one thinks of management as the day-to-day running of the fund, Fidelity doesn't manage its index funds (or at least many of them, I haven't checked them all). HABDX is legally managed by Harbor but really run by Pimco, and BLYPX is managed by American Beacon but really run by Bridgeway. Likewise Fidelity index funds are legally managed by FMR but really run by Geode (formerly a Fidelity subsidiary, but now independent).
The manager matters even for index funds, especially when sampling is used.
Comments
I was hoping for something better organized, since I got a ton of emails last night about lots of Fidelity funds opening, yet they weren't up on the Fidelity website. This is not the "scorecard" I was looking for. The bottom line is that Fidelity has added a few index funds (notably Total Int'l, i.e. all world ex-US), and is now more amenable to selling through third party platforms.
Marketing: Instead of saying what Fidelity is doing, and then talking about the company (which seems to be the usual way of making financial announcements), it starts by saying how big and storied Fidelity is in the index fund space (really?). Then after describing the index fund changes, it goes on to say, but wait, Fidelity is really an active fund company that's doing so much better than its benchmarks. Say what?
Legal: Technically everything written is legally correct, because it walks a very narrow path. Fidelity is indeed the second largest index mutual fund manager. Let's deconstruct that.
If we include ETFs, which seem to be the preferred channel for index funds but are not legally mutual funds, then Fidelity falls behind such names as Blackrock and SSgA (SPDRs).
Manage - if one thinks of management as the day-to-day running of the fund, Fidelity doesn't manage its index funds (or at least many of them, I haven't checked them all). HABDX is legally managed by Harbor but really run by Pimco, and BLYPX is managed by American Beacon but really run by Bridgeway. Likewise Fidelity index funds are legally managed by FMR but really run by Geode (formerly a Fidelity subsidiary, but now independent).
The manager matters even for index funds, especially when sampling is used.