Portfolio

In spite of the market downturn, the trading services that Fidelity Investments provides for intermediaries is doing a brisk business, the company announced Thursday.Daily average commissionable trade, new breakaway brokers joining the platform, equity order flow, prime brokerage and adviser-sold 401(k) plans are all doing well. Combined, the divisions serving these markets had $1.1 trillion in assets under administration by the end of last year.Daily commissionable trades rose 18% in 2008 and averaged 259,000 and 314,000 in September and October. Fidelity also sold 702 new Fidelity Advisor 401(k) plans in 2008, up 36%. Money market assets rose 44% to a record $137 billion, and 102 breakaway brokers selected Fidelity as custodian.Assets in Fidelity’s prime brokerage services also rose, by 127%, aided by a 57% increase in new clients. “Despite arguably one of the most volatile business environments in recent memory, we repeatedly demonstrated our ability to help intermediary clients navigate challenging financial markets,” said Michael K. Clark, president of Fidelity Institutional Products Group. “Our ability in 2008 to achieve record trading volumes, equity order flow and institutional money market flows, among others, was a direct result of the trust our diverse base of clients placed in the strength and reputation of Fidelity,” Clark added.Even in this challenging market environment, Fidelity plans to continue to invest in these businesses’ technology, trading tools and services in 2009.“We are in an unprecedented business environment that is rapidly transforming the financial services industry, and those firms which do not have all the pieces to serve these converging markets and new financial business models will be at a competitive disadvantage,” Clark said.

Global hedge funds assets declined more than 30% in 2008 to $1.8 trillion, according to a report issued by publisher HedgeFund Intelligence. The sharpest declines occurred in the second half of last year.

Nearly 30% of long-term care costs are paid for out-of-pocket, according to research by Avalere Health, far higher than the 10% widely estimated previously. One of the reasons for the discrepancy, according to the public policy and research firm, is that Avalere has included assisted living costs.

Independent financial advisers are somewhat optimistic about the economy, with 44% saying they believe the recession will end this year, and another 41% pointing to next year, Charles Schwab found in a survey of 1,200 advisers.

Equity mutual funds suffered redemptions in 2008, only the third time in their history that they have had outflows. Actively managed funds lost $221.08 billion, while index funds took in $17.6 billion.

Will Danoff, manager of the Fidelity Contrafund, admits he was too bullish on technology and retail stocks, but says he was right to pass on low-priced financial services stocks.

Between a mixture of its conservative, low-cost fund offerings that appeal to investors in this time of market stress, and a performance-based compensation plan, Vanguard has been able to retain enough assets and keep costs down to avoid mass layoffs.

Gamco has elected founder Mario Gabelli’s daughter, Elisa M. Wilson, to the board. She is a shareholder of Gamco’s privately held parent company, GGCP, and, along with her siblings, owner of the real estate partnership that leases office space to the firm. She is also president and a trustee of the charitable trust, Gabelli Foundation. Gabelli’s brother, John D. Gabelli, is also on the board.

Allstate has decided to cancel its seven ClearTarget Retirement Funds after only 10 months, saying that it has decided to exit the target-date mutual fund business due to lackluster sales.

To mitigate against any future financial catastrophes, the Investment Company Institute on Tuesday called for two new regulators that would focus on systemic risk and the capital markets, bridging the functions of the Securities and Exchange Commission and the Commodity Futures Trading Commission.