Privately held Fidelity Investments 2009 annual report indicated a 5% increase in operating profit to $2.51 billion, up from $2.39 billion in 2008, excluding interest expenses and taxes.

Fidelity CEO and Chairman Edward “Ned” Johnson III issued a letter to shareholders attributing the growth to distribution operations and performance. Fidelity’s mutual funds outperformed 74% of their peers, the company said, up from 56% the year before.

In addition, total assets under management were $1.5 trillion at the end of 2009, up 21% from the previous year, and assets under administration were $3.2 trillion, a 20% increase.

Last year, Fidelity’s revenue fell nearly 11% to $11.48 billion, even as it cut its workforce from 46,000 to 37,000.