Fidelity's Income Rises 54% Even as Active Outflows Persist

  • Redemptions in active products reached $47 billion in 2017
  • Yet the firm’s mutual funds beat more than 75% of peers

Fidelity Investments said operating income surged 54 percent last year even as investors pulled money from its actively-managed stock mutual funds.  

The mutual fund giant earned $5.3 billion, up from $3.4 billion in 2016, according to the company’s annual report released Tuesday. But its active funds continued to suffer outflows of $47 billion last year.

While that was an improvement from 2016, when the company saw active outflows of $58 billion, it demonstrates that Fidelity and its peers continue to face pressure in this arena, even if that pressure has abated somewhat. By contrast, Fidelity said its own index products gathered $23.1 billion in deposits.

The outflows came despite stronger performance by the firm’s stock and bond pickers. Fidelity said its mutual funds beat more than 75 percent of their peers over one, three and five years.

In 2017, active U.S. stock funds suffered redemptions of about $190 billion, according to data from Morningstar Inc. Funds that mimic indexes attracted $468 billion.

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