Geode Capital Management

Geode Capital Management, LLC
IndustryInvestment management
Founded2001; 23 years ago (2001)
Headquarters
100 Summer Street, Boston, Massachusetts
,
U.S.
Key people
David Lane (President and chief executive officer)
ProductsIndex funds
Quantitative funds
AUM$1.483 trillion (September 2024)
Number of employees
161 (2024)
Websitewww.geodecapital.com
Footnotes / references
[1]

Geode Capital Management, LLC (Geode) is an American investment management firm based in Boston, Massachusetts.

History

Geode was originally set up by Fidelity Investments in 2001 to run systematic long/short equity strategies and to incubate new strategies.[2] Fidelity initially committed $229 million to Geode Capital, which was computer-driven as an investor, with Fidelity executive Jacque Perold installed as the head of the firm. Perold was later succeeded in 2007 by Vince Gubitosi, who in 2021 was succeeded by Bob Minicus.[3]

In 2003, Geode was spun off as an independent company.[2] A possible reason was to avoid the potential conflict of Geode shorting stocks held by Fidelity's mutual funds.[4] Although separate from Fidelity, it remained located near Fidelity's headquarters on Summer Street in Boston. It continued to manage Fidelity's passive funds as a sub-adviser, according to the Financial Times in England.[5] That year, in 2003, Fidelity Investments hired Geode Capital Management to subadvise on three Spartan equity index funds.[6]

In 2020, it had almost $720 billion assets under management with around 140 employees.[7][8] In February 2021, the firm was profiled in the Wall Street Journal, with the paper calling it Fidelity's "Secret weapon".[7][8] During the same month, the firm shut down its hedge fund business following losses due to derivatives.[9]

At the start of 2022, Geode surpassed $1 trillion in assets under management due to the popularity of index funds.[5]

Operations

Geode primarily acts as manager (in sub-advisory role) to registered funds (most notably Index Funds) sponsored by Fidelity Investments and to affiliates National Financial Services and Fidelity Brokerage Services. Through the Fidelity Automated Managed Platform (AMP), Geode provides digital advice and discretionary investment services.

In addition, Geode also manages assets for both institutional and retail investors. This includes corporations, investment companies, pension funds, sovereign wealth funds, state and municipal government entities and charitable organizations. It also counts U.S. residents who are and aren't high-net-worth individuals as clients.

Owners and staff

The firm is owned by its employees and board of directors. Most of the staff are quants, which are engineers trained in mathematics or computer science.[3][7][8] In 2023, Lionel T. Harris served as chairman of the board. Bob Minicus is president and CEO. The board overall included ten members.[10]

Investment strategies

Geode invests in public equity and alternative investment markets, primarily focusing on the growth and value stocks of small to large cap companies.

Geode states it uses a systemic and risk-managed approach to investing that is team-based, seeking capture systematic sources of return by "emphasizing a repeatable, risk-managed and collaborative investment process."[11] In pursuit of both alpha generation and beta exposure, the firm's strategies include equity indexes, options, quantitative active equity, commodities, and multi-asset classes.[12]

Investment funds

Funds Vintage Year Capital ($m)
Fidelity U.S. Value ETF (FCUV)[13] 2020 $550.8
Fidelity U.S. Momentum ETF (FCMO)[14] 2020 $256.3
Fidelity Canadian Momentum ETF (FCCM)[15] 2020 $117.2
Fidelity All-American Equity ETF (FCAM)[16] 2024 $43.6

See also

References

  1. ^ "Form ADV" (PDF). SEC. Archived (PDF) from the original on November 24, 2022. Retrieved November 24, 2022.
  2. ^ a b "Fidelity Splits Off Geode Capital as Separate Manager (Update1)". February 9, 2006. Archived from the original on February 9, 2006.
  3. ^ a b Editorial Staff. "The story of Geode—Fidelity's low-profile indexing jewel". Retirement Income Journal. Archived from the original on January 27, 2023. Retrieved January 20, 2023.
  4. ^ Hechinger, John (August 5, 2003). "Fidelity Spins Off Geode Unit; Could Allay Fears of Conflict". Wall Street Journal. Archived from the original on March 6, 2023. Retrieved February 19, 2021.
  5. ^ a b Wigglesworth, Robin (February 9, 2022). "Fidelity's index fund business Geode hits $1tn in assets". Financial Times. Archived from the original on March 9, 2022. Retrieved March 9, 2022.
  6. ^ "Fidelity Investments hired Geode Capital Management to subadvise three..." Pensions & Investments. December 14, 2006. Archived from the original on January 19, 2023. Retrieved January 20, 2023.
  7. ^ a b c Baer, Justin (February 10, 2021). "Fidelity Holds Secret Weapon to Take On Robinhood and Vanguard". Wall Street Journal. Archived from the original on March 6, 2023. Retrieved February 19, 2021.
  8. ^ a b c "Fidelity Holds Secret Weapon to Take On Robinhood and Vanguard". news.futunn.com. Archived from the original on April 13, 2024. Retrieved February 19, 2021.
  9. ^ Baer, Justin; Lim, Dawn (February 28, 2021). "Geode, Fidelity's Index-Fund Manager, Closes Hedge-Fund Business After Derivatives Bets Implode". Wall Street Journal. Archived from the original on February 28, 2021. Retrieved February 28, 2021.
  10. ^ "Board of Directors". Geode Capital. Archived from the original on March 23, 2023. Retrieved January 20, 2023.
  11. ^ "Systematic and Risk-Managed | Geode Capital". www.geodecapital.com. November 9, 2015. Archived from the original on March 2, 2021. Retrieved February 20, 2021.
  12. ^ "Systematic Investing | Geode Capital". www.geodecapital.com. November 9, 2015. Archived from the original on March 2, 2021. Retrieved February 20, 2021.
  13. ^ "Fidelity U.S. Value ETF". www.fidelity.ca. Retrieved December 18, 2024.
  14. ^ "Fidelity U.S. Momentum ETF". www.fidelity.ca. Retrieved December 18, 2024.
  15. ^ "Fidelity Canadian Momentum ETF". www.fidelity.ca. Retrieved December 18, 2024.
  16. ^ "Fidelity All-American Equity ETF". www.fidelity.ca. Retrieved December 18, 2024.