Abigail Johnson once resisted bulking up in exchange-traded funds because of the potential costs of committing to the lower-margin products. But a sea change in the money management industry is forcing the chief executive of Fidelity Investments to alter that strategy. Fidelity launched six new ETFs in 2016, increasing its lineup of ETFs by 40%, while the firm slashed fees to undercut competitors on price. That push came in a year when clients pulled more money from Fidelity’s traditional mutual funds than in any since 2011,...
Fund management company Fidelity launched six new exchange-traded funds (ETFs) last year in order to capitalise on the unprecedented flow of money to cheaper, index-based products. Where the company once resisted bulking up in ETFs, it now risks losing customers if it fails to offer this service, head of Fidelity's asset management business, Charles Morrison said. The firm has been forced into a position where its investors are being asked to pay more for their investments and is having to make decisions about which products they want to invest in.