Friday, March 7th
Fidelity announced today that Nancy D. Prior was appointed the president of their Fixed Income division, which includes the Money Market and Bond divisions, and vice chairman of Pyramis Global Advisors.
My thought: Most boring, least attractive asset class still among most profitable for Fidelity: Money market funds, that is. And they may become the most crucial inflation-fighting vehicle in a retirement investor's portfolio in the coming decade.
My quick take: Fidelity’s return to promoting from within signals their conviction in their strengths and sends a solid message to internal culture, shareholders and institutional clients.
Fidelity has struggled to broadcast its bond message in the past. Weak marketing and strong performance are a problematic mix. I expect Nancy has that on her hit list.
Nancy’s proven ability to navigate the shallow shoals of shorter duration bonds and money market funds, from performance, to product development to regulatory wrangling, makes her the ideal candidate for what could be the most important type of income investments over the next decade or more. According to Charlie Morrison, the newly named President of Fidelity’s Asset Management group, she was already a front-runner in terms of him thinking of whom his successor would be if he ever left his previous role as president of Fidelity’s Fixed Income group.
When you take an elevator inside a Fidelity corporate office building the slogan on the inside is “It’s in our DNA.” I still think it should be changed to “It’s in our NAV,” meaning not just their pursuit of excellence but the ways in which they consistently demonstrate achieving it. Money markets have always been the heart of Fidelity’s fund soul. In the late 70’s early 80’s when Japan Inc. was supposed to take over U.S. initiative and geopolitics had run off the oil patch rails, hyperinflation decimated stock and bond portfolios while money markets returned 18%-plus percent.
With income in the cross hairs of a rising rate environment for years, if not decades, to come, and with older investors looking for safe places to hold some of their savings, money markets will likely rise from their current zero-yield ashes to provide yield lift and safety. So, it’s a crucial, big book of existing and potential new business for Fidelity, as is the overall fixed income lineup and product development going on therein.
Nancy is the right person to lead the division to greatness and through the inevitable rough market and regulatory patches.
Click here to read the press release: Download Fidelity Appoints President of Fixed Income NR FINAL 3-7-14