Friday morning's Fund Track repeats a similar mantra heard elsewhere about Fidelity being "the largest mutual fund company" in the world, but misses the points of its own numbers. The Journal tries to draw links between chief operating officer Bob Reynolds' announced departure and alleged lagging mutual fund performance and sales at the Boston Behemoth.

The paper cites Financial Research Corp. numbers on Fidelity's fund performance, saying "only" 58 percent of its stock funds beat their peers last year, and only 59 percent are so far this year. Even if this is a problem (it's not the problem WSJ thinks it is), it shouldn't be related to yesterday's shifts, because Reynolds is not now, and has not been, a money manager--he's an operations guy, focusing on building Fidelity's technology and services businesses.

Fund performance, while it might affect him, just isn't his department. As for the supposed performance problem, having 58 percent of your funds beat their peers (even assuming they're all equal-sized, and of course they're not, with the ones that are doing better presumably snagging more of the new assets now) means Fidelity's solidly above average. Given that they are the biggest mutual fund manager in the world, that's quite an achievement.

But what about lagging distribution? While FRC also says that Fidelity's fund were outsold last year by American Funds, Vanguard and Barclays, the comparison here doesn't have much relevance to Reynolds, either.

American Funds and Fidelity sell through totally different channels (brokers and primarily retirement plans, respectively), and even Vanguard and Barclays beat out Fidelity in net inflows, they'll still lag it by miles in terms of profits, because they're index managers. The fees on Fidelity's funds, mostly actively managed stock funds, probably average double those of the fees Vanguard and Barclays reap.

The column does shed a little more light on the expanded role of Fidelity brokerage president Ellyn McColgan, citing the near-doubling in employees managed by her. According to the Journal, 10,000 of Fido's 42,000 employees had fallen under McColgan before the change, whereas 19,000 will fall under her now.

As for the predictions preceding this succession drama, Fidelity Investor newsletter James Lowell tells the Journal that Reynolds' unsuccessful bid last year to become NFL commission signaled that Reynolds knew he wasn't chairman and CEO Ned Johnson's heir apparent any more.

Industry insiders interviewed by The MFWire were instead completely surprised by Reynolds' retirement announcement, and the rumors floating around the industry regarding Reynolds' NFL bid were totally different. Sources told The MFWire that Reynolds was actually trying to force Johnson to make a succession decision one way or the other. They reasoned that Reynolds didn't want to spend his peak management years staying in the number two spot without knowing if he could become number one, and he wanted Johnson to choose. 

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