Making the Mutual Fund a
Johnson and Fidelity
1946, Boston lawyer Edward Johnson II established Fidelity Management and Research
Company as the investment advisor to Fidelity Fund, which he took over in 1943.
Johnson's future ideas would change the nature of the investment industry. By
applying the professional money management, securities research, and broad diversification
that wealthy people had always relied on for preserving their money, to a low-cost
investment vehicle, he made it possible for ordinary Americans to participate.
son, Edward "Ned" Johnson III, instituted a number of innovative strategies in
the midst of the 1970s recession, including selling funds directly to the public
through direct response advertising and a toll-free telephone line. In 1979 Fidelity
started a discount brokerage business-the only mutual fund company to do so.
Johnson is best known for introducing check writing on a money market fund. Most
investment companies worried about customers taking their money out of funds,
but Johnson allowed investors to write checks against their money market fund.
The strategy worked, and investors rushed to get their money into Fidelity's first
money market fund-Fidelity Daily Income Trust. Boston vaulted into the status
of #3 city in the world for asset management.
Today, Fidelity, owned by
employees and members of the Johnson family, is the world's largest mutual fund
company, and is headquartered in Boston's Financial District near the Old State