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Money Management

Fidelity sees record revenue, operating income despite dip in AUM

Fidelity Investments reported $6.69 trillion in assets under administration as of Dec. 31, of which $2.42 trillion were assets under management, the company said in its annual report Thursday.

The company's AUA dropped 1.5% from Dec. 31, 2017, while its AUM dipped 1% in the same period.

Fidelity's revenue totaled $20.4 billion for the year, an increase of 11.5% vs. 2017. Fidelity's operating income was $6.3 billion, an increase of 18.6% from 2017. Both revenue and operating income were company records.

The annual report did not provide any quarterly comparisons.

Fidelity's total discretionary and non-discretionary net inflows for the year were $309 billion, which was 19.6% higher than 2017's total net inflows. This includes $100.8 billion in discretionary net inflows — which consists of Fidelity-managed mutual funds, other managed products and managed accounts — and $208.2 billion in non-discretionary net inflows. Discretionary net inflows totaled $24.1 billion in 2017.

Fidelity's mutual funds outperformed 66%, 72% and 76% of their industry peers for the trailing one-, three- and five-year periods, respectively, ended Dec. 31, the report said. This compares with 78%, 77% and 76% for the same periods in 2017.

In a letter to shareholders, Fidelity President and CEO Abigail P. Johnson said that although "Fidelity's operating and financial performance in 2018 was one of the best in (its) history … there are significant competitive challenges in Fidelity's path." Looking forward, Ms. Johnson wrote that she hopes the company can expand and deepen its relationships with its customers, and "capitalize on new revenue models to counteract the margin erosion that comes from relentless competition in mature markets."