Fidelity's Game Plan

The fund company has diversified into new businesses, but it is not abandoning its stock-picking culture.

- Nellie S. Huang

Every April, the investment team at Fidelity holds an internal stock-picking contest. On the appointed day, after the market closes, the team gathers on the 14th floor of the firm’s SummerStreet offices in Boston, and 40-odd portfolio managers each pitch one stock (some via pre-recorded videos or teleconference from Hong Kong, London or Tokyo) to some 120 research analysts—a departure from the usual protocol. Each manager gets just 60 seconds to present, and then the analysts, traders and fund managers vote on the best pitch. “It gets fiercely competitive,” says Brian Hogan, head of the stock and high-yield-debt divisions at Fidelity and emcee of the annual event.

The stakes aren’t high, although there’s some gentle heckling from peers. The most persuasive pitch wins dinner for four on the company’s dime. So does the best-performing stock after one year. But there is a penalty for losing. The pickers of the four worst performing stocks over the 12-month stretch must each donate $500 to the winner’s favorite charity. That keeps the picks within the realm of the reasonable. “In these contests, if there’s no risk, the managers will go for the highfliers,” says Tim Cohen, who leads the firm’s global research team.