Why has the average assets under management for Fidelity Investments's target date funds decreased by 8% year-over-year?

Introduction

The 8% year-over-year decrease in average assets under management for Fidelity Investments's target date funds is a concerning trend that requires thorough investigation. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause, considering both immediate and long-term implications for the product and business.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a specific event or change that triggered this decline. Has there been any significant product or marketing changes in the past year?

Why it matters: Identifying recent changes can help pinpoint potential causes. Expected answer: Information about recent product updates or marketing shifts. Impact on approach: If changes occurred, we'd focus on their impact; if not, we'd look at broader market factors.

• Considering the competitive landscape, I'm curious about our performance relative to other firms. How does this 8% decrease compare to industry benchmarks or direct competitors?

Why it matters: Understanding if this is an industry-wide trend or specific to Fidelity helps narrow our focus. Expected answer: Comparative data on competitor performance. Impact on approach: If industry-wide, we'd examine macroeconomic factors; if Fidelity-specific, we'd focus on internal issues.

• Given the nature of target date funds, I'm wondering about the demographic breakdown. Has there been any significant shift in the age distribution of our investors over the past year?

Why it matters: Changes in investor demographics could explain shifts in fund performance. Expected answer: Data on investor age distribution changes. Impact on approach: Significant demographic shifts would lead us to examine our product-market fit and marketing strategies.

• Considering potential technical issues, I'm curious about our fund performance tracking. Have there been any changes to how we calculate or report average assets under management?

Why it matters: Ensures we're comparing apples to apples in our year-over-year analysis. Expected answer: Information on any changes in calculation or reporting methods. Impact on approach: If changes occurred, we'd need to recalculate using consistent methods before proceeding with further analysis.