Fidelity Investments

WASHINGTON -- It isn't surprising that the Salvation Army and the YMCA top the Philanthropy 400 -- the list of charities that raised the most money last year. What is surprising, controversial and troubling to some in the nonprofit world is the newcomer to the No. 3 slot.Right after those two big brand-name charities, and right before the venerable American Cancer Society, comes the Fidelity Investments Charitable Gift Fund.Fidelity Investments is the world's largest mutual fund company. On this list, its charitable offspring is a giraffe grazing among the cows.

Charity begins with foundations close to homeThe Sun's recent report on charitable giving by Americans noted the rapid rise in donations to gift funds run by for-profit mutual fund companies ("Fidelity Investments vaults to top of charities, " Nov. 4)).While the $572 million Americans donated to charity last year through Fidelity Investments is significant, it pales in comparison to the more than $2.8 billion they donated through local non-profit community foundations in 1998.Despite the hefty marketing budgets of mutual fund companies, community foundations have an advantage Fidelity Investments can't match: Local management that understands community needs and can counsel donors about how their contributions can achieve maximum impact.

THE MUTUAL fund industry has helped millions of Americans to save for their golden years. Then it can find itself left out when workers change jobs.One of every two people who change jobs spend some or all of the money they've salted away for retirement, according to a recent survey by the Employee Benefit Research Institute, a Washington-based public policy think tank.It doesn't matter if it's $800 or $80,000. The hard-earned wad goes to buy a house, take a vacation or pay off bills.While lump-sum distributions are often small, they add up to an estimated $150 billion each year.

BOSTON -- Fidelity Investments is spending more than $100 million this year to improve the technology used by its institutional retirement group."In the 401(k) business alone this year, we'll spend over $100 million and this type of investment takes place year after year after year," said Robert Reynolds, who oversees the Fidelity business.Competition in the 401(k) market is fierce. Fidelity holds the No. 1 position, with more than $130 billion in assets, or about twice as much as the nearest competitor.

BOSTON -- Fidelity Investments is expanding its defined contribution business overseas, initially to Canada, the United Kingdom and Hong Kong.The Boston-based money management firm is looking abroad because "the market opportunities in these countries are very similar to where the U.S. was eight to 10 years ago in the growth of defined contribution plans," said Robert Reynolds, president of Fidelity Investments Institutional Retirement Group.Assets in 401(k) plans in the U.S. have rocketed to $675 billion at the end of 1995 from $105 billion 10 years ago, according to Access Research Inc.Fidelity is the largest provider of 401(k)

Fidelity names fund directorFidelity Investments, whose bond mutual funds were stung last year by rising interest rates and risky investments, named managing director Fred Henning yesterday as director of its fixed-income and money market funds.Mr. Henning's predecessor, Thomas Steffanci, resigned in January to become a principal with Alpha Select Investments Inc. in Portsmouth, N.H., after a year in which 18 of Fidelity's 20 taxable bond funds suffered losses.

When you watch cable television news programs, you are probably used to being pitched fast-food hamburgers, cars, beer and other consumer staples. But mutual funds?Within the past few years, the fund industry has indeed taken its pitch to television, but its reaction to the medium has been mixed.The big companies are in the game, and "a lot of the smaller complexes are testing the waters now," said John A. Jelilian, vice president of Competitrack, a firm in New York that tracks advertising spending by funds, brokerage firms and other financial services companies.

LONDON -- After 15 years of building its fund business in the United Kingdom, Fidelity Investments is advancing on the European continent.The Boston-based mutual fund giant opened its second front in Europe this fall, complementing its 2-year-old German business with a French office on Paris' famed Champs Elysees."

Computer program venture setCapital Cities-ABC Inc. will form a venture with Electronic Arts Inc. to produce computer programs for children, the first time a large TV network has aligned itself with a major software company.The venture, which has been rumored for several weeks, will develop games and educational software based on ABC-TV children's programs but may later be expanded, sources said yesterday.Representatives of the companies declined to comment before a news conference at Capital Cities-ABC's corporate headquarters today.

NEW YORK -- A billion here, a billion there, and pretty soon even Fidelity Investments is talking about real money -- money that it will not distribute to investors in its giant Magellan Fund.The Boston mutual fund company announced late yesterday that Magellan, the country's largest mutual fund, will not make a year-end distribution of taxable income to its three million shareholders because of an accounting error.Just last month, the company had told investors who asked that they should expect to get about $4.32 a share, one cent less than they received last December.

Get the conversation going Here are questions from financial planners and Fidelity Investments to help launch a discussion about retirement issues between you and your mate. Answer questions separately. Then compare notes. 1. What's a good day in retirement look like to you? 2. Among retired friends and relatives, whose lifestyle would you like to emulate? How did they do it? 3. What in your mind is keeping you from achieving the retirement of your dreams? 4. Will you or your spouse work part time in retirement?

A big debate in the mutual fund industry has left investors somewhere between "new and improved" and "if it ain't broke, don't fix it." Intuitively, shareholders want the former - every improvement is seen as good news - and fund companies want the latter. Alas, when it comes to the debate over whether mutual fund boards should have chairmen and a super majority of directors who are independent of company management, it appears that fund interests are going to win. In 2004, the Securities and Exchange Commission adopted a rule requiring all funds to appoint an independent chairman and to make three-quarters of the board of directors independent.

Daniel Smith and his wife recently received notices from Fidelity Investments with "Important Notice" stamped on the outside. Both Smiths, who live in Norwood, Mass., have Fidelity's Freedom funds in retirement plans, and the letter was about their holdings. The Freedom funds are "life-cycle funds," issues that age and become more conservative along with the investor. They invest entirely in other Fidelity funds and are designed as a one-size-fits-all default choice, the kind of fund an investor is supposed to be able to put money into and forget about.

For years, the best news an investor could get about a mutual fund was that expenses were being cut. As a result, investors who see fee cuts today assume the reduction is always good news. Increasingly, however, expense cuts are becoming a fund company's way of apologizing for its mistakes, of trying to make up for times when performance may have fallen short of expectations. Fund reform is forcing companies and directors to be more circumspect about expenses, knowing that the public is more aware than ever that some funds have been generating big revenues for management without ever generating superior gains for investors.

If the rest of the world were like the mutual fund business, Santa Claus could replace his elves with coal miners. Fifteen months of scandals have shown that plenty of bad boys and girls in the fund world deserve coal in their Christmas stockings this year, and that's why it's time for the second installment in my Annual Lump of Coal Awards. It takes more than dreadful performance or a whiff of scandal to earn a spot in my ninth annual awards. Lumps of Coal recognize managers, executives, firms and industry watchdogs for attitude, performance, action or behavior that is offensive, duplicitous, disingenuous, reprehensible or just plain stupid.

Fidelity Investments, the world's largest mutual fund company, said that federal regulators are investigating whether its employees took improper gifts in exchange for directing business to brokers at outside firms. Fidelity uses outside brokers to execute securities trades. The Boston company, which oversees about $1 trillion for clients, is cooperating with investigations by the Securities and Exchange Commission and the NASD, Fidelity spokeswoman Anne Crowley said yesterday. Fidelity also is conducting its own review, she said.

NEW YORK - Fidelity Investments and other fund management companies may not reap much of a windfall from President Bush's plan to establish private Social Security accounts, according to a Securities Industry Association report yesterday. Restrictions on investment options and administrative costs may limit revenue for the firms to $39 billion over 75 years - about 1 percent of the $3.3 trillion total revenue forecast for the financial sector in that period, according to the report by the Washington-based lobbyist for the securities industry.

BOSTON - Fidelity Investments Inc. is trying to get the New York Stock Exchange to use an electronic trading system rather than one in which most transactions go through a floor trader. The biggest U.S. mutual fund company wants the NYSE to make its trading system more competitive, spokeswoman Anne Crowley said yesterday. Fidelity has said that electronic systems such as those offered by the Nasdaq stock market are more efficient and help reduce costs by limiting the role of traders on the floor.

Basic retirement planning sites SEC's Financial Facts Tool Kit:www.sec.gov/investor/pubs/toolkit.htm The American Savings Education Council's Tools and Resources section: www.asec.org/toolshm.htm The National Endowment for Financial Education: www.nefe.org/pages/multimedia.html MSNBC: www.msnbc.comSophisticated planning tools T. Rowe Price (Choose Retirement/IRAs): www.troweprice.com T. Rowe Price's Retirement Income Calculator: www3.troweprice.com/ric/RIC/ Fidelity Investments (Choose Retirement and Planning)

BOSTON - Fidelity Investments yesterday named Abigail P. Johnson, the daughter of Chief Executive Officer Edward C. Johnson III, president of its money management arm, succeeding Robert C. Pozen. Johnson, 39, whose grandfather founded what is now the largest U.S. mutual fund company, will become president of Fidelity Management & Research Co. on June 15. She has been an executive in FMR's equity division since 1997. The appointment puts the younger Johnson in line to lead Boston-based Fidelity at a time when mutual fund sales are slowing due to lower stock prices.