S&P raises Fidelity to stable outlook

BOSTON – Fidelity Investments’ corporate parent had its outlook raised to “stable” from “negative” by Standard & Poor’s, which cited improved performance of stock funds managed by the world’s largest mutual-fund company, Bloomberg News reported last week.
Standard & Poor’s kept FMR LLC’s counterparty credit rating at A+/A-1, the New York-based ratings company said in a statement.
Fidelity, which manages $1.5 trillion, said in its annual report that its funds beat 74 percent of their peers on an asset-weighted basis in 2009, compared with 56 percent during the prior year. Stock funds managed by the Boston-based firm beat 66 percent of their rivals last year, compared with 36 percent in 2008.
“If the company can build on its recent investment performance and restore the luster of its domestic equity mutual funds, so as to provide a lift to core profitability and cash flow metrics, we could raise the ratings,” according to the Standard & Poor’s report.
Operating income, which excludes interest and taxes, climbed to $2.52 billion in 2009, from $2.39 billion a year earlier, Fidelity said in its annual report on Feb. 25. Revenue fell 11 percent to $11.5 billion. •