Interview with Fidelity's Abigail Johnson

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SlowMovingInvestor
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Interview with Fidelity's Abigail Johnson

Post by SlowMovingInvestor » Sat Nov 17, 2018 6:07 pm

This week's Barrons has an interview with Abby Johnson and another Fido exec. Nothing really new, but generally interesting:

https://www.bloomberg.com/news/features ... ndex-funds

bondsr4me
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Re: Interview with Fidelity's Abigail Johnson

Post by bondsr4me » Sat Nov 17, 2018 7:28 pm

Thanks for the link....enjoyed the article.

Have a great weekend BH’ers,

Don

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Re: Interview with Fidelity's Abigail Johnson

Post by Grt2bOutdoors » Sat Nov 17, 2018 7:59 pm

SlowMovingInvestor wrote:
Sat Nov 17, 2018 6:07 pm
This week's Barrons has an interview with Abby Johnson and another Fido exec. Nothing really new, but generally interesting:

https://www.bloomberg.com/news/features ... ndex-funds
That’s Bloomberg, not Barrons.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

workerbeeengineer
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Re: Interview with Fidelity's Abigail Johnson

Post by workerbeeengineer » Sat Nov 17, 2018 8:03 pm

I recall Barron’s either interviewed Abby Johnson or just ran an article on her about 4-6 weeks ago. Must be Bloomberg’s turn this month?

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arcticpineapplecorp.
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Re: Interview with Fidelity's Abigail Johnson

Post by arcticpineapplecorp. » Sat Nov 17, 2018 8:43 pm

The interview was also with Kathleen Murphy, who leads the personal investing unit responsible for the new funds. (Abbreviations below to BM are Bloomberg Markets, KM is Kathleen Murphy and AJ is Abigail Johnson).
BM: If you’re going to develop a relationship with someone, what do you hope to sell them or to offer them that they’ll eventually pay for?

AJ: I’d like to think that people will continue to pay for active management. That’s the core value proposition that we’ve been known for forever. If you look in the brokerage world, we charge very low commissions, but we give the best execution.
I found this the most interesting quote because of two reasons:

1. even though they're pushing index funds (and free ones at that, with no minimums) and they promote themselves as the #2 biggest index provider in the article, they still believe in active management as their "core value proposition", when we all know that active must by definition underperform over time relative to indexing, by at least the additional costs incurred.

2. They've tipped their hand by admitting they want people in actively managed funds. No surprise, for the same reason that when Willie Sutton was asked why he robbed banks, he quipped, "That's where the money is."

So to those who have switched for the Zero Funds, be careful. They will likely want you to incorporate active into the mix as well. It is their core value proposition after all, so why wouldn't you want to benefit from that?

In fairness, I will say there have been papers and emails, etc. from Vanguard promoting their actively managed funds as well, in combination with an index portfolio. I believe Charles Schwab used to refer to this as "core and explore". However, Fidelity's survival does depend on promoting actively managed funds because otherwise they can't make money. Whereas Vanguard only has to operate "at cost". Any extra gets returned to the customer in the form of lower fees.

I appreciate their honesty about being late to the index game and learning from their mistakes. I find it interesting that they don't really know why something they sold was branded the way it was:
One of the things that’s fun, that I really like about our business, is that we’re not just in that asset management box. We’re doing a bunch of other things, too. So much market share has shifted to index funds, and we were late to that game. I like to think that we’ve caught up now.

BM: The name change to Fidelity Index Funds in 2016 helped, getting rid of the Spartan brand used since the 1990s.

KM: That was a bit of a self-inflicted wound.

BM: Was the original thinking that they didn’t want the new funds to be confused with Fidelity?

AJ: I don’t really know. I think the idea was that somebody thought it was like this New England Yankee thing and that people would say, “Spartan, it’s spare.” I’m speculating a little here, but I’ve got some insight. I think there was a little bit [of thinking] that it would be more Vanguard-esque to have that really explicit commitment to being bare-bones.
This next one was much too softball for me. It should have been challenged more. They should have been asked to give examples like how their active funds beat their index funds (have they?):
BM: Fidelity was late to the index-fund game, but it’s come on strong. Do you think there’s any challenge to saying, “We’re somebody who will sell you both active and passive funds”?

AJ: Over the last however-many decades, we’ve learned a lot about what it takes to be really good in active management.
This was an interesting article. Other subjects were about acquisitions like e-money, diversifying into foreign markets (like U.K.), increasing workplace diversity, divorce/survivorship issues for women, bitcoin, millenials, open office concept, etc. Thanks for sharing it.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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dogagility
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Re: Interview with Fidelity's Abigail Johnson

Post by dogagility » Sun Nov 18, 2018 5:55 am

Thanks for sharing the link. :sharebeer
I've enjoyed DIY investing and banking through Fidelity and now see why this is the case: it starts with having good people leaders and these two women seem to be that in spades.
Taking "risk" since 1995.

grok87
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Re: Interview with Fidelity's Abigail Johnson

Post by grok87 » Sun Nov 18, 2018 7:02 am

wrote: AJ: I’d like to think that people will continue to pay for active management. That’s the core value proposition that we’ve been known for forever. If you look in the brokerage world, we charge very low commissions, but we give the best execution.
any evidence this is true?
Keep calm and Boglehead on. KCBO.

afan
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Re: Interview with Fidelity's Abigail Johnson

Post by afan » Sun Nov 18, 2018 7:24 am

A very clear admission that asset management was the major money maker. You cannot get rich offering competitively priced index funds. Hence the focus on active funds and signing people up to let Fidey run their portfolios.

As long as you buy the cheap index funds and decline the other offerings you can do just fine at Fidelity. I have never been to a Fidelity brnach and cannot imagine why I ever would. Operating those branches is something the asset management clients pay for. I hope they find it worth the costs.
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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Re: Interview with Fidelity's Abigail Johnson

Post by mptfan » Sun Nov 18, 2018 8:16 am

arcticpineapplecorp. wrote:
Sat Nov 17, 2018 8:43 pm
1. even though they're pushing index funds (and free ones at that, with no minimums) and they promote themselves as the #2 biggest index provider in the article, they still believe in active management as their "core value proposition", when we all know that active must by definition underperform over time relative to indexing, by at least the additional costs incurred.
It is not true to say that actively managed funds must by definition underperform over time relative to indexing by at least the additional cost incurred. That statement assumes that actively managed funds cost more than similar index funds, and while that may be true in most cases, it is not true in all cases, therefore it is not true "by definition." To give one example, Vanguard's Intermediate Term Investment Grade Bond Fund (VFIDX) is an actively managed intermediate bond fund and the admiral shares have an ER of only .10%, while these index bond funds have higher expenses... T. Rowe Price U.S. Bond Enhanced Index Fund PBDIX, Expense Ratio .30%, ishares U.S. Aggregate Bond Index Fund Investor A Shares BMOAX .36% and TIAA CREF Bond Index Fund Retail Class TBILX .44%.

The point is that some actively managed funds are cheaper than some comparable index funds, and one should not assume that all index funds have a lower ER than comparable actively managed funds "by definition" simply because they are index funds.
Last edited by mptfan on Sun Nov 18, 2018 3:17 pm, edited 4 times in total.

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Re: Interview with Fidelity's Abigail Johnson

Post by mervinj7 » Sun Nov 18, 2018 8:46 am

mptfan wrote:
Sun Nov 18, 2018 8:16 am
That statement assumes that actively managed funds cost more than similar index funds, and while that may be true in most cases, it is not true in all cases, therefore it is not true "by definition." To give one example, Vanguard's Intermediate Term Investment Grade Bond Fund (VFIDX) is an actively managed intermediate bond fund and the admiral shares have an ER of only .10%, while the Fidelity Total Bond Fund is an index intermediate bond fund with an ER of .45%, more than 4 times that of the Vanguard actively managed fund.
What's the ticker symbol for the Fidelity index fund you mentioned? I couldn't find any bond index funds in the fund screener with a fee greater than 0.1% and that's for a so called sustainable fund.

https://www.fidelity.com/fund-screener/ ... t=TBND_all

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whodidntante
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Re: Interview with Fidelity's Abigail Johnson

Post by whodidntante » Sun Nov 18, 2018 9:53 am

mervinj7 wrote:
Sun Nov 18, 2018 8:46 am
mptfan wrote:
Sun Nov 18, 2018 8:16 am
That statement assumes that actively managed funds cost more than similar index funds, and while that may be true in most cases, it is not true in all cases, therefore it is not true "by definition." To give one example, Vanguard's Intermediate Term Investment Grade Bond Fund (VFIDX) is an actively managed intermediate bond fund and the admiral shares have an ER of only .10%, while the Fidelity Total Bond Fund is an index intermediate bond fund with an ER of .45%, more than 4 times that of the Vanguard actively managed fund.
What's the ticker symbol for the Fidelity index fund you mentioned? I couldn't find any bond index funds in the fund screener with a fee greater than 0.1% and that's for a so called sustainable fund.

https://www.fidelity.com/fund-screener/ ... t=TBND_all
The poster was mistaken. It's an actively managed fund.

UpperNwGuy
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Re: Interview with Fidelity's Abigail Johnson

Post by UpperNwGuy » Sun Nov 18, 2018 10:03 am

Fidelity's Total Bond Fund is actively managed. US Bond Index Fund is the one most Bogleheads use at Fidelity. The names confuse folk.

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arcticpineapplecorp.
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Re: Interview with Fidelity's Abigail Johnson

Post by arcticpineapplecorp. » Sun Nov 18, 2018 11:14 am

mptfan wrote:
Sun Nov 18, 2018 8:16 am
arcticpineapplecorp. wrote:
Sat Nov 17, 2018 8:43 pm
1. even though they're pushing index funds (and free ones at that, with no minimums) and they promote themselves as the #2 biggest index provider in the article, they still believe in active management as their "core value proposition", when we all know that active must by definition underperform over time relative to indexing, by at least the additional costs incurred.
It is not true to say that actively managed funds must by definition underperform over time relative to indexing by at least the additional cost incurred. That statement assumes that actively managed funds cost more than similar index funds, and while that may be true in most cases, it is not true in all cases, therefore it is not true "by definition." To give one example, Vanguard's Intermediate Term Investment Grade Bond Fund (VFIDX) is an actively managed intermediate bond fund and the admiral shares have an ER of only .10%, while the Fidelity Total Bond Fund (FTBFX) is an index intermediate bond fund with an ER of .45%, more than 4 times that of the Vanguard actively managed fund.

The point is that some actively managed funds are cheaper than some comparable index funds, and one should not assume that all index funds have a lower ER than comparable actively managed funds "by definition" simply because they are index funds. Focusing on the difference between actively managed and indexed funds misses the mark from a business standpoint... Fidelity can (and does) offer index funds that have higher costs than comparable Vanguard index and actively managed funds as defined by their expense ratios, and they can make a nice profit by charging more for their funds no matter whether they are actively managed or indexed.
ok, so now that others have pointed out you are mistaken about the fund you chose (thinking it index when it is active, thereby making my point for me), can you find any actual examples where an actively managed fund is less expensive than it's targeted index corollary? If so, I'd be interested to see that.

My point was that all participants are "the market". This includes all actively managed funds and index funds. Everybody makes up the entire thing. The entire thing earns an average return over time. If by definition we can't all be above average (except in lake woebegon), then by definition most are going to be average...before costs. Therefore the average actively managed fund will do about average over time. But because the costs, by definition must be more for an active fund because it's more expensive by definition to actively manage rather than passively manage, then the net return must by definition be lower for the average actively managed fund when compared with an index fund...because of the cost differential.

The other way of looking at it is that an active fund manager has to do better than average, to compensate for the extra cost. How likely is that if we agree that over time the average active fund manager is not going to do better than average, they're going to do average instead? What's the outcome? Lower returns than a low cost index fund.

I'll await some examples where you can show an active fund is cheaper than a similar index fund.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

SlowMovingInvestor
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Re: Interview with Fidelity's Abigail Johnson

Post by SlowMovingInvestor » Sun Nov 18, 2018 11:27 am

It would have been interesting to hear whom Ms. Johnson considers to be Fidelity's greatest competitor.

Vanguard, Schwab, TDAM are obvious, but the likes of Betterment, YouInvest etc. may also be competitors.

She mentions their partnership with Blackrock, but in some ways Blackrock is a competitor for Fidelity too.

PS: And yes, the article was in Bloomberg, not Barrons (as I mistakenly posted) :oops: .

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Re: Interview with Fidelity's Abigail Johnson

Post by mptfan » Sun Nov 18, 2018 11:42 am

arcticpineapplecorp. wrote:
Sun Nov 18, 2018 11:14 am
I'll await some examples where you can show an active fund is cheaper than a similar index fund.
I was mistaken about that particular Fidelity fund being an index fund, but my point remains, and here are several index funds that are more expensive than a comparable actively managed fund...

T. Rowe Price U.S. Bond Enhanced Index Fund PBDIX, Expense Ratio .30%
ishares U.S. Aggregate Bond Index Fund Investor A Shares BMOAX .36%
TIAA CREF Bond Index Fund Retail Class TBILX .44%

Compared to an active fund...

Vanguard Intermediate Investment Grade Fund Investor Shares VFICX .20%, and Admiral Shares VFIDX .10%
Last edited by mptfan on Sun Nov 18, 2018 11:58 am, edited 3 times in total.

RickBoglehead
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Re: Interview with Fidelity's Abigail Johnson

Post by RickBoglehead » Sun Nov 18, 2018 11:54 am

Fidelity is a for-profit company, with Abby and her father as the dominant shareholders. The combined networth of the Johnson family is nearly $30 billion. Of course she wants people to use actively managed funds and pay for advice. She's in this to make money.

Vanguard on the other hand is non-profit and owned by the shareholders. All fees are invested into the funds.

I started investing in mutual funds in 1987 when I joined Fidelity. Over the years, more and more of my funds made their way to Vanguard. Today Vanguard holds close to everything, Fidelity only a tiny amount of 401K money that will remain until that employment ends, then they'll have nothing.

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Re: Interview with Fidelity's Abigail Johnson

Post by arcticpineapplecorp. » Sun Nov 18, 2018 12:40 pm

mptfan wrote:
Sun Nov 18, 2018 11:42 am
arcticpineapplecorp. wrote:
Sun Nov 18, 2018 11:14 am
I'll await some examples where you can show an active fund is cheaper than a similar index fund.
I was mistaken about that particular Fidelity fund being an index fund, but my point remains, and here are several index funds that are more expensive than a comparable actively managed fund...

T. Rowe Price U.S. Bond Enhanced Index Fund PBDIX, Expense Ratio .30%
ishares U.S. Aggregate Bond Index Fund Investor A Shares BMOAX .36%
TIAA CREF Bond Index Fund Retail Class TBILX .44%

Compared to an active fund...

Vanguard Intermediate Investment Grade Fund Investor Shares VFICX .20%, and Admiral Shares VFIDX .10%
I'm not saying an index fund is always cheaper. State Farm's S&P500 index fund charges 0.64% expense ratio and a 5% front load :oops:
source: https://www.google.com/search?q=state+f ... fox-b-1-ab

But low cost tends to win. And overwhelmingly that tends to be index funds because they're cheaper to run. Guess not always, but mostly. It's also the case that bond index funds aren't passively managed, they're actively managed because of the turnover necessary with bond funds (source: https://investor.vanguard.com/mutual-fu ... olio/vbmfx). This has been discussed before at bogleheads. And in the case of the cheaper actively managed bond fund with Vanguard, it does win not only in cost but in performance (bmoax only went back to 2012 but still underperformed so I used pbdix which goes back to 2010, can only do 3 comparisons at a time with portfolio visualizer. but not matter, vg's lowest cost fund outperformed):

https://www.portfoliovisualizer.com/bac ... ion3_3=100

Since bond funds, even bond index funds are actively managed technically, we can continue this exercise with stock funds (index vs active) which could
My point is only that low cost tends to win. Index funds, by and large tend to be cheaper than actively managed funds. Ergo, index funds generally do better than actively managed funds. You not only guarantee yourself less expense with index funds, you eliminate manager risk which is the risk of underperfomance caused by the poor performance of the fund manager. This is probably even more true of stock funds than bond funds.

Also the examples you gave aren't exactly apples to apples (at least with the first fund). If you look at morningstar bdix is in the middle of the style map box (medium interest rate risk and medium quality) whereas the other two, bmoax and tbilx are in the high quality, medium interest rate risk, along with tbilx.
"Invest we must." -- Jack Bogle | “The purpose of investing is not to simply optimise returns and make yourself rich. The purpose is not to die poor.” -- William Bernstein

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Random Musings
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Re: Interview with Fidelity's Abigail Johnson

Post by Random Musings » Sun Nov 18, 2018 1:19 pm

Magellan sure made a boatload of money for that family. As I recall, that fund had the great early track record with
Peter Lynch, but I believe those early returns were benchmarked against the S&P 500 even though it was more small cap and mid cap during that time. Once it became "known", nothing more than a higher ER closet index fund. Look at last 10 yrs performance compared to the benchmark, just a closet index fund. Last fifteen years , an underperformer.

This also makes a point that actives can not always be easily benchmarked as style drift can occur over time, one would have to shift the benchmarks along with the fund. That is a rather daunting task.

I have no problem with people using Fidelity as their platform or using their index funds (I can't remember how well they track compared to Vanguards). But Fidelity is really in it for the active funds with those juicy ERs. That is why their family weath towers above what Jack Bogle had received.

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

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Re: Interview with Fidelity's Abigail Johnson

Post by mervinj7 » Sun Nov 18, 2018 2:30 pm

mptfan wrote:
Sun Nov 18, 2018 11:42 am
arcticpineapplecorp. wrote:
Sun Nov 18, 2018 11:14 am
I'll await some examples where you can show an active fund is cheaper than a similar index fund.
I was mistaken about that particular Fidelity fund being an index fund, but my point remains, and here are several index funds that are more expensive than a comparable actively managed fund...

T. Rowe Price U.S. Bond Enhanced Index Fund PBDIX, Expense Ratio .30%
ishares U.S. Aggregate Bond Index Fund Investor A Shares BMOAX .36%
TIAA CREF Bond Index Fund Retail Class TBILX .44%

Compared to an active fund...

Vanguard Intermediate Investment Grade Fund Investor Shares VFICX .20%, and Admiral Shares VFIDX .10%
Can you go ahead and correct your post? It's misleading to claim that Fidelity index funds have higher ERs than Vanguard active funds. In fact, they often have lower ERs than the corresponding index funds from almost all other companies.

mptfan
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Re: Interview with Fidelity's Abigail Johnson

Post by mptfan » Sun Nov 18, 2018 3:12 pm

arcticpineapplecorp. wrote:
Sun Nov 18, 2018 12:40 pm
But low cost tends to win.
I agree. The issue I had was with this statement:

"...we all know that active must by definition underperform over time relative to indexing..."

SlowMovingInvestor
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Re: Interview with Fidelity's Abigail Johnson

Post by SlowMovingInvestor » Sun Nov 18, 2018 7:47 pm

Quick comment: I've generally had an excellent experience with Fidelity -- marvelous customer service. They do ask me if I'm interested in financial advice every 6-12 months, but back off immediately when I say no.

If someone asked me where they should open a new account, I would be inclined to say Fidelity is preferrable to Vanguard simply because their service and IT is better, and no one is forcing you to buy their active funds.

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Re: Interview with Fidelity's Abigail Johnson

Post by Nate79 » Sun Nov 18, 2018 7:52 pm

Vanguard has also publically stated that they were going to increase marketing for their PAS service as a revenue driver to support their operations.

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Re: Interview with Fidelity's Abigail Johnson

Post by rgs92 » Sun Nov 18, 2018 8:32 pm

What struck me is that in this very long conversation, Abigail Johnson said precious little to defend the value of actively managed funds, which is what Fidelity stands for in large part.

Sometimes what is not said is more important than what is. The silence is deafening.

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Re: Interview with Fidelity's Abigail Johnson

Post by alec » Sun Nov 18, 2018 9:46 pm

It was a marketing piece, pure and simple... Yawn...
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair

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Re: Interview with Fidelity's Abigail Johnson

Post by fennewaldaj » Sun Nov 18, 2018 11:42 pm

rgs92 wrote:
Sun Nov 18, 2018 8:32 pm
What struck me is that in this very long conversation, Abigail Johnson said precious little to defend the value of actively managed funds, which is what Fidelity stands for in large part.

Sometimes what is not said is more important than what is. The silence is deafening.
Yeah its kinda hard to argue for them at the fees fidelity charges. Their fees are reasonable for active but still a fairly high hurdle to overcome. If they could get there ERs down to vanguard level they may have a credible argument for active at least in some areas. I don't know if 0.25 fees could support there active analyst infrastructure or not. Al the moment they are still better off charging more and having a slow string of net outflows.

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Re: Interview with Fidelity's Abigail Johnson

Post by sc9182 » Mon Nov 19, 2018 7:19 am

RickBoglehead wrote:
Sun Nov 18, 2018 11:54 am
Fidelity is a for-profit company, with Abby and her father as the dominant shareholders. The combined networth of the Johnson family is nearly $30 billion. Of course she wants people to use actively managed funds and pay for advice. She's in this to make money.

Vanguard on the other hand is non-profit and owned by the shareholders. All fees are invested into the funds.
All fees minus costs may be returned, doesn’t necessarily mean everybody cost structure is most optimal.

We heard of too many Wallstreet Co.s and Traders going rogue or making big mis-steps. Thus causing many a firms incurring big losses or worse yet bankrupt circa 2008-2009. No guarantee that your above claim alone fix such losses or problems within a given company.

Now - how about keeping an open mind, and invest with good brokerage but low cost VG/Fid funds/ETFs?

As documented by Earl of Brokerage bonuses thread: Try getting $2500 - $5000 transfer bonus or (retention bonus year after year!). Forget low cost, there are better deals out there., such as letting your portfolio pay for you!

You might be happy that you are saving what is equivalent of pittance (which in itself not true, because Fidelity beat just everyone including VG out of their own game with Fidelity lower than low cost funds!)

How about dipping into Fid’s Marketing funds (or Johnson family’s pockets) by getting those transfer and retention bonuses annually! How about making some extra money, use it to pay off your car or help towards paying off that pesky mortgage or property taxes! (sorry folks: money begets mo-money!)

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Re: Interview with Fidelity's Abigail Johnson

Post by grok87 » Wed Nov 21, 2018 3:50 pm

fennewaldaj wrote:
Sun Nov 18, 2018 11:42 pm
rgs92 wrote:
Sun Nov 18, 2018 8:32 pm
What struck me is that in this very long conversation, Abigail Johnson said precious little to defend the value of actively managed funds, which is what Fidelity stands for in large part.

Sometimes what is not said is more important than what is. The silence is deafening.
Yeah its kinda hard to argue for them at the fees fidelity charges. Their fees are reasonable for active but still a fairly high hurdle to overcome. If they could get there ERs down to vanguard level they may have a credible argument for active at least in some areas. I don't know if 0.25 fees could support there active analyst infrastructure or not. Al the moment they are still better off charging more and having a slow string of net outflows.
When you say “their fees are reasonable for active” do you mean compared to their competitors or in terms of the value they deliver if any.
Keep calm and Boglehead on. KCBO.

SlowMovingInvestor
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Re: Interview with Fidelity's Abigail Johnson

Post by SlowMovingInvestor » Wed Nov 21, 2018 4:33 pm

rgs92 wrote:
Sun Nov 18, 2018 8:32 pm
What struck me is that in this very long conversation, Abigail Johnson said precious little to defend the value of actively managed funds, which is what Fidelity stands for in large part.

Sometimes what is not said is more important than what is. The silence is deafening.
I don't think she was specifically asked about that -- I suspect she could have come up with some anodyne reply about 'value propositions'.

One thing I wish the interviewer has asked her about was potential conflicts of interest between Fidelity's public funds, and some of the other pools of capital it runs -- some for high net worth individuals, some for execs etc.

If shares of a particularly sought after IPO is alloted to Fido, who gets them ? Fidelity's public funds (the ones that can invest in IPOs) ? Their 'valuable' brokerage or private wealth customers ? Totally private pools of capital that Fidelity manages ?

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Re: Interview with Fidelity's Abigail Johnson

Post by fennewaldaj » Wed Nov 21, 2018 10:27 pm

grok87 wrote:
Wed Nov 21, 2018 3:50 pm
fennewaldaj wrote:
Sun Nov 18, 2018 11:42 pm
rgs92 wrote:
Sun Nov 18, 2018 8:32 pm
What struck me is that in this very long conversation, Abigail Johnson said precious little to defend the value of actively managed funds, which is what Fidelity stands for in large part.

Sometimes what is not said is more important than what is. The silence is deafening.
Yeah its kinda hard to argue for them at the fees fidelity charges. Their fees are reasonable for active but still a fairly high hurdle to overcome. If they could get there ERs down to vanguard level they may have a credible argument for active at least in some areas. I don't know if 0.25 fees could support there active analyst infrastructure or not. Al the moment they are still better off charging more and having a slow string of net outflows.
When you say “their fees are reasonable for active” do you mean compared to their competitors or in terms of the value they deliver if any.
I meant compared to their competitors.

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