Fidelity Billionaire Johnson Taps ETFs as Profits for Funds Fade

When Abigail Johnson began her apprenticeship at Fidelity Investments 25 years ago, the Boston-based firm founded by her grandfather was the nation’s biggest mutual-fund company and star manager Peter Lynch was enjoying a performance streak at the Magellan Fund -- a 29 percent average return over 13 years -- that ranks among the best in the industry’s history.

A year ago, Johnson, now 51, was named president of a very different Fidelity. Under her father, Edward C. Johnson III, known as Ned, Fidelity has surrendered its leadership and much of its iconic status as a money manager, Bloomberg Markets magazine will report in its November issue. Fees for investing client money in its own funds now produce less than half of Fidelity’s revenue, and rivals BlackRock Inc., Pacific Investment Management Co. and Vanguard Group Inc. have shot past Fidelity in assets managed in the course of the past five years.