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Edward "Ned" Johnson III Passed Away at 91

yogibearbullyogibearbull
edited March 2022 in Other Investing
"....."He was a visionary, an innovator, and a philanthropist who had tremendous curiosity about the world around him and who lived his life to the fullest each and every day," the Johnson family said in a statement. "To the end, he never lost his enthusiasm, his sense of humor, or his energetic spirit.".....Johnson served as chairman and CEO of Fidelity Investments, the company his father started, for over 40 years, and transformed the Boston-area mutual fund manager into the second-largest investment management company in the US and one of the most successful diversified financial services firms in the world.....The firm, now led by his daughter Abigail Johnson....."
https://www.cnn.com/2022/03/24/investing/edward-ned-johnson-iii-fidelity-death/index.html
More https://en.wikipedia.org/wiki/Edward_Johnson_III

Comments

  • catch22catch22
    Yes. Saw this, too, last evening.

    Fidelity shaped the retail investor world into a better place for we here, to participate.

    I recall how Fidelity began to impact the very large "traditional" full retail brokerage/mutual fund houses (Merrill-Lynch, etc.) in the 1980's. Discount brokerage, much lower loads on mutual funds and the FAST system using a touch-tone phone for trades, at a time when other electronic means for trading did not exist for the small investor. Hourly trading of their "select" funds, if one chose; via the touch-tone phone system.

    AND, look at the low cost and ease of placing an investment today.

    Accounts still in place from the late 1970's for our house.
  • yogibearbullyogibearbull
    edited March 2022
    He tried his hand in lots of things, and for a while, there were some strange things under Fido umbrella.

    Many may not realize (or remember) that he also ran Fido Trend FTRNX and Magellan FMAGX (when it was still private) and had great records. But that may be least of his many accomplishments.
  • Sven
    Thanks to Ned Johnson Fidelity and Schwab were the early pioneers in discount brokerages that benefit many small investors. Prior to them, full service brokerages were the only option. How time have change. Fidelity was my first brokerage and they also happen to be my 401(k) administrator.
  • msf
    He had the best record of Magellan (FMAGX) managers, both in absolute and relative terms, with an annualized return of 30.6% vs. 7.9% for the S&P 500.
    https://greensboro.com/magellans-best-manager-the-envelope-please/article_287cfc10-6b68-5515-a321-c7caacfbf802.html

    OTOH, it seems like a bit of a stretch to say, as CNN does, that "In 1974, he broke the mold by selling mutual funds directly to individual investors instead of through traditional brokers."

    Almost from day one, some mutual funds were sold direct:
    By the 1940s, the wholesale distribution system [selling through brokers] had become the norm, and it continued to be so through the 1960s. Yet this was not the only sales model employed by mutual funds. Two of the largest fund complexes in the 1950s and1960s, — Hamilton Management Corporation and Investors DiversifiedServices,Inc. — employed their own salespeople. These individuals only sold their respective firm’s funds, and they were the only sales representatives who did. A minority of funds distributed their shares directly to the public without a sales force of any kind.
    https://www.ebhsoc.org/journal/index.php/ebhs/article/view/208/191

    Nor was Fidelity at the vanguard (pun intended) of offering no-load funds. Unlike families like Scudder (the original no-load fund), T. Rowe Price, Dodge & Cox, Mairs & Power, Mutual Series and others, it did not offer no-load funds in the sixties. It wasn't until the early 2000s that Fidelity dropped its "low" (2-%3%) loads on its most lucrative funds, like Magellan and Contra (FCNTX).

    https://www.jstor.org/stable/4469596?seq=4
    https://www.orlandosentinel.com/news/os-xpm-1995-06-11-9506080389-story.html
    https://www.thinkadvisor.com/2003/06/24/fidelity-drops-sales-charge-on-magellan-fund/

    If one is going to give Ned Johnson credit for selling direct, then he also gets credit for charging loads that went entirely to Fidelity. He was brilliant at growing not just the company but its profits.

    A brief note on the Wikipedia entry - It says that Ned Johnson managed Fidelity from 1963 to 1977, seemingly to have forgotten Dick Habermann (1972-1977).
    http://personal.fidelity.com/myfidelity/InsideFidelity/NewsCenter/quickFacts/Magellan.html
  • carew388carew388
    ISTR that FPURX and FBALX were sold without a sales charge in the 1980's ?
  • catch22catch22
    @carew388 Happen to have a real paper booklet nearby for Fido. A few trinkets.

    1987

    FPURX = no load (1946 inception).
    FBALX = 2% load (1986 inception).

    1993: FPURX now has a 2% load, FBALX, no load

    Sidenote: 1979, all fund loads removed; 1981, loads reinstated on some equity funds.

  • carew388carew388
    +1
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