Making the Mutual Fund a
Household Word
Ned Johnson and Fidelity


In 1946, Boston lawyer Edward Johnson II established Fidelity Management and Research Company as the investment advisor to Fidelity Fund, which he took over in 1943. Johnson's future ideas would change the nature of the investment industry. By applying the professional money management, securities research, and broad diversification that wealthy people had always relied on for preserving their money, to a low-cost investment vehicle, he made it possible for ordinary Americans to participate.

His son, Edward "Ned" Johnson III, instituted a number of innovative strategies in the midst of the 1970s recession, including selling funds directly to the public through direct response advertising and a toll-free telephone line. In 1979 Fidelity started a discount brokerage business-the only mutual fund company to do so.

Ned Johnson is best known for introducing check writing on a money market fund. Most investment companies worried about customers taking their money out of funds, but Johnson allowed investors to write checks against their money market fund. The strategy worked, and investors rushed to get their money into Fidelity's first money market fund-Fidelity Daily Income Trust. Boston vaulted into the status of #3 city in the world for asset management.

Today, Fidelity, owned by employees and members of the Johnson family, is the world's largest mutual fund company, and is headquartered in Boston's Financial District near the Old State House.