Fidelity Investments has tapped its president Abigail Johnson to be CEO of the nation's second-largest mutual fund manager.

Johnson, who is a granddaughter of Fidelity founder Edward "Ned" Johnson, was appointed president of the Boston-based company two years ago and will retain this role while serving in the top executive post. She replaces her 84-year old father Edward C. Johnson III, who held the CEO position since 1977 and will continue with Fidelity serving as chairman of the board.

"Along with our senior team, we will work together to strengthen Fidelity's industry leadership and to innovate in ways that enhance the experience we provide to our customers," said Johnson's father in a Columbus Day memo distributed to company employees announcing the leadership change. "In my role as Fidelity's chairman and CEO, I have always said that our best days are ahead of us, largely due to the commitment and contributions from all our associates."

Johnson, who first joined Fidelity full-time in 1988, has held previous roles overseeing the firm's retail, workplace and institutional businesses. She also served as president of Fidelity's asset management division. In addition, Johnson has been chairman of Fidelity Worldwide Investment, which provides asset management services to investors outside the U.S. and Canada.

The 52-year-old Johnson is now the highest-ranking woman in the industry, leading a company with $4.9 trillion in assets under administration and roughly $2 trillion in assets under management. Johnson is worth $9 billion, according to the Bloomberg Billionaires Index, and owns roughly half of her family's shares in Fidelity's holding company, which represents a 49% stake.

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