A Trillion Reasons Fidelity Wants to Offer Investors Everything

You don’t earn a trillion dollars in inflows by thinking small.

In its annual investment report published on Tuesday, Fidelity announced that its assets under management increased by a titanic $1 trillion in 2024, bringing its total AUM to $5.9 trillion. Meanwhile, its total assets under administration — which includes both what it holds in investment funds plus assets in other accounts it manages — increased 20% to $15.9 trillion. It’s the result of a decade-long push to offer investors just about every type of investment vehicle imaginable. And the prize for their efforts? Just some $32.7 billion in revenue and $10 billion in annual profit, both company records.

High Fidelity

Fidelity — a privately-held firm controlled by the Johnson family and led by longtime CEO Abigail Johnson — only reports what’s going on under its massive hood once a year. And as it turns out, 2024 proved just as fruitful for Fidelity as it did for many of its publicly-traded rivals (BlackRock, for instance, similarly scored record inflows and profits last year); AUM increased 20%, revenue 16% and operating income 21%.

The banner year was achieved by being a money manager, a brokerage firm (daily average trades last year hit 3.5 million, a 35% year-over-year increase), a 401(k) pension administrator, and meeting investors wherever they want to be, including with alternative asset classes that previously didn’t even exist:

• In its report, Fidelity highlighted that in the past year, it had launched two of the industry’s first crypto-focused exchange-traded funds, tracking bitcoin and ethereum, respectively. The firm says it now operates over 70 ETFs, comprising $108.5 billion in AUM, up two-fold from 2023.
• The company also highlighted its wealth management unit’s push to offer investors fractional shares last year. Additionally, Fidelity launched and held a successful close of the Fidelity Venture Capital Fund I LP, its “first private equity fund dedicated to venture capital.” 

Passing of the Vanguard: None of Fidelity’s 70 ETF products, however, can claim to be the world’s largest. In fact, as of Tuesday, that title now belongs to the The Vanguard S&P 500 ETF, which surpassed State Street’s popular S&P 500 tracker SPY after pulling in some $23 billion to start the new year, according to Bloomberg data. The toppling of SPY is due in part to Vanguard’s aggressive push to slash fees to attract retail investors.