The Boston-based investments giant saw AuM hit by the market selloff but net inflows rose last year and revenue, profit figures rose.

Fidelity Investments, the US asset management giant, logged a rise in profits and revenues for its third year in the row but could not withstand the asset effect of the stock market selloff last year.

The firm said that operating income rose by 19 per cent year-on-year to $6.3 billion in 2018. Revenue jumped by 12 per cent to $20.4 billion. A market rout at the end of 2018 helped push assets under management down by 1 per cent, to $2.42 trillion. 

Asset and wealth managers have been squeezed by stock market declines in 2018, and the industry continues to be squeezed by the structural shift by investors moving towards fee-based advice and low-cost “passive”, aka index-tracking, products. In such an environment firms have to provide a blend of active and passive products as market cycles change. 

“Fidelity’s diverse group of businesses and broad set of investment solutions helped to offset the negative effects that the stock market’s decline would have otherwise had on the company’s asset levels,” Abigail Johnson, Fidelity’s chairman and chief executive, was quoted as saying in a letter to shareholders.

Fidelity, which is owned by the Johnson family, added $309 billion in new client money during the year, nearly 20 per cent more than the firm’s 2017 inflows, the firm said in a statement emailed to this publication.

There was a record annual net flow of $100.8 billion for discretionary products. This includes all Fidelity investment products, both direct managed products and managed accounts - a 318 per cent increase year over year, up from $24.1 billion in 2017 and $9.3 billion in 2016. The Personal Investing business reported net asset flows of $105.0 billion, up 18 per cent year over year.