Long-time Fidelity Investments Chairman Edward C. Johnson to retire: Reuters

Long-time Fidelity Investments Chairman Edward C. Johnson III will retire next month and will be succeeded by his daughter, Abigail Johnson, the company said on Monday.

During his nearly 40-year run as chairman of Boston-based Fidelity, Johnson turned the family-controlled company into a mutual fund powerhouse. But over the past decade Fidelity’s advantage has slipped as investors have poured billions of dollars into passive investment strategies, namely index funds run by archrival Vanguard Group.

The move was not unexpected, as Johnson is 86 years old and Abigail Johnson has been running the U.S. mutual fund giant on a day-to-day basis as chief executive officer. She will add the chairman’s title and her father will keep regular office hours as chairman emeritus, Fidelity spokesman Vincent Loporchio said. The elder Johnson’s retirement is not related to health reasons, Loporchio said.

John Bonnanzio, editor of Fidelity Monitor & Insight, an independent newsletter for Fidelity investors, said Abigail Johnson’s new title was no surprise.

“At this point, with the clear transition that has taken place over a decade, was it ever in doubt? The only shocker here would have been for something other than this to happen. Effectively, it’s been hers to run for a while now,” Bonanzio said.