Fidelity Holds Secret Weapon to Take On Robinhood and Vanguard

Fidelity Holds Secret Weapon to Take On Robinhood and Vanguard


Blocks from Fidelity’s headquarters, a team of quants toil in relative anonymity. They’re also a key weapon in the investment firm’s fight to take on all rivals, from Vanguard Group to Robinhood Markets Inc.

Geode Capital Management Inc. was spun out of the Boston-based firm nearly two decades ago. At the time, Fidelity Investments Inc. was content to be undercut by rivals in the low-cost index business and didn’t want to overshadow its powerful and famous stock pickers.

Today, Geode is the key plank in the firm’s effort to lower the costs of investing across all of its businesses. It has helped Fidelity gain back ground lost to passive-investing giants Vanguard and BlackRock Inc. It has also drawn new clients to the firm in the era of no-commission trades. The investments Geode manages helped Fidelity lift assets under administration—or what investors held in brokerage and retirement accounts and in its funds—to $8.8 trillion in September from $8.32 trillion at the end of 2019..

Geode now manages some $720 billion, up from less than $100 billion a decade ago and more than household names such as Blackstone Group Inc., Eaton Vance Corp. and Putnam Investments.

“It’s one of the best-kept secrets in asset management,” said Ben Johnson, director of global exchange-traded fund research at Morningstar.



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