Your Survival Guy

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Do You Know Fidelity’s Best Kept Secret Weapon?

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When you think about low cost index funds, do you think of Fidelity Investments? You should. Located blocks from Fidelity’s headquarters is Fidelity run Geode where “a team of quants toil in relative anonymity,” writes Justin Baer for the WSJ. “They’re also a key weapon in the investment firm’s fight to take on all rivals, from Vanguard Group to Robinhood Markets Inc.”

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

Baer continues:

Index investors like Geode are charged with keeping pace with those benchmarks. The task grows more challenging when stock prices are moving rapidly and the pace of client money moving in and out of funds quickens.

Vincent Gubitosi ran Geode for 13 years before retiring as president and chief investment officer in December. He reckons the benchmark S&P 500 covered more ground in 2020, as measured by the distance between the low and the high points, than it had in any year since Geode’s founding.

“What impacts us as index managers is how big the daily move is, and what the flows are like,” Mr. Gubitosi said. “There was no time to come up for air.”

Action Line: What I’ve known for years is Fidelity Investments’ laser like focus in offering its clients the absolute best in technology. To me this article is less about indexing and more about being aligned with the best in the business. Sign up here for my monthly letter.

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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West (RIP JB) and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com To sign up for my free monthly Survive & Thrive letter, click here.

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