Flows to Fidelity Investments’ equity and bond funds are sorely lagging those of competitors Vanguard and American Funds, the San Francisco Chronicle reports.

Through August, Fidelity funds took in a net of $3.3 billion, while Vanguard reaped $23 billion and American Funds, $46 billion, data from Financial Research Corp. shows.

“Definitely, market share in the equity fund arena continues to be a challenge for Fidelity,” noted John Bonnanzio, editor of Fidelity Insight.

But Fidelity spokesman Vin Loporchio contests the FRC data, noting that it doesn’t include sales of Fidelity Advisors funds, which are sold through intermediaries, and money market funds. Including the Fidelity Advisors and money market fund sales data, Fidelity netted $46.4 billion, on par with American Funds and surpassing Vanguard, according to the company.

As to why Fidelity’s sales might not be as strong as in years past, industry insiders point to weak performance by some of the company’s best-known, largest funds combined with fund closures and competition from high-yielding money market funds and exchange-traded funds.

In addition, the company has shifted its emphasis from asset management to 401(k) administration.

“Fidelity has made a choice,” noted fund consultant Geoffrey Bobroff. “They are more interested in controlling the relationship and less where the assets are invested. That’s a departure from 10 years ago.” Whether this new strategy will work for Fidelity, Bobroff added, “Only time will tell.”

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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