60 SECOND BRIEFING
By JIA LYNN YANG

(FORTUNE Magazine) – How to Interpret Recent News Out of Fidelity

In the past two months the mutual fund giant has lost a high-profile executive and gotten a negative report from Moody's. What gives?

1 Is Fidelity in any financial trouble? Hardly. With $1.4 trillion in assets under management, the privately held firm is a fee-generating machine. In the lucrative 401(k) market, its 24% share makes it the No. 1 player. In its February report, Moody's reaffirmed its excellent Aa3 rating on the money manager's debt—although it did change its outlook to "negative."

2 So what is Moody's concerned about? The ratings agency cited "competitive threats to the company's leading share of the mutual fund market" and its narrowing advantage as competition heats up for trillions in baby-boomers' rollover assets. According to Morningstar, Fidelity's market share in equity funds fell from 18.1% in 1995 to 12.5% in 2006.

3 What about the executive who just left? In January the executive director of Fido's money-management unit, Stephen Jonas, announced his exit after just 20 months. But Jim Lowell of newsletter Fidelity Investor describes it as a routine change. The bigger issue is what happens when chairman Ned Johnson (above) steps down. "That," Lowell says, "will impact investors."

4 What does Fidelity say? A spokeswoman says Fido is confident about its ability to grow and attract boomers, citing the "breadth of our reach"—from the firm's dominant position in the 401(k) business to its nationwide network of 114 storefront offices.

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.