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