Fidelity, Franklin, Legg Suffer Largest Redemptions in 2008

Fidelity Investments, Franklin Resources and Legg Mason were hit with the biggest redemptions in 2008, losing $40 billion, $21.5 billion and $21 billion, respectively. Collectively, the three companies were hit with 43% of the $194 billion in total withdrawal requests during the year.

Throughout the year, U.S. and international stock funds lost $189.2 billion in assets due to withdrawals, and diversified funds tumbled from $29.7 billion in withdrawals. But bond funds look in a net $20.7 billion, and alternative funds, $4.1 billion.

And the picture doesn’t appear to be that much brighter for 2009. “We expect flows into retail equity products to remain challenging into 2009,” said Robert Lee, an analyst with Keefe, Bruyette & Woods. While the outlook for equity funds isn’t bright, Lee said, fixed income funds might continue to attract assets, however.

With fewer assets on hand, fund company fees have declined, and the industry has already shed 4,800 jobs, Bloomberg reports.