(Bloomberg) -- Fidelity Investments, the second-largest U.S. mutual fund company, reported a 29% increase in operating income in 2014, as growth in its retirement business and cost cutting helped offset withdrawals from its actively managed offerings.

Earnings, excluding costs such as interest and taxes, increased to $3.4 billion from $2.6 billion in 2013, the Boston-based closely held firm said in its annual report to shareholders. Revenue rose 9% to $14.9 billion.

Fidelity, led by Chief Executive Officer Abigail Johnson after her father Ned Johnson handed the reins over to her, has been seeking to increase client deposits into active funds after losing market share to low-cost index providers such as Vanguard Group, the biggest mutual fund company.

The firm reported $6 billion in withdrawals from its offerings including mutual funds, managed accounts and other investment products. Equity products suffered of $16 billion in redemptions.

“While not where we want to be, we continue to make solid progress in this area,” Fidelity wrote in the report. Redemptions from funds run by stock pickers rose from $8 billion in 2013 as “investors continued to favor passive vehicles over actively managed funds.”

Fidelity’s assets under management climbed 4% to $2.03 trillion in 2014, a period during which the Standard & Poor’s 500 Index rose 11%. The firm’s assets under administration, which includes money that it oversees as record-keeper for retirement plans and financial advisers, rose 10% in the year to $5.06 trillion.

Fidelity, the biggest retirement-services provider in the U.S., ended the year with $1.46 trillion in retirement assets under administration, drawing $42 billion in its defined- contribution platforms.

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