Fidelity's annual report revealed mutual funds assets down 23 per cent to $1.11 trillion at 31 December 2008. The fall was caused by market declines, as net inflows were $55.6 billion, a 26 per cent fall from 2007.

Bond funds saw $2 billion of net inflows and stood at $117.7 billion in total assets at year-end, while money-market funds saw $87.9 billion in net inflows. Fidelity's money-market funds had assets of $483.1 billion as of 31 December.

ButFidelity saw $34.2 billion in net outflows from its stock funds, with total assets falling to $502.6 billion. Only 36 per cent of Fidelity's stock funds outperformed their peers, down from 72 per cent in 2007.

"Fixed income performed well, while results from our equity portfolios were disappointing," saidMike Wilens, head of asset management.

Fidelity's overall operating income for last year was $2.4 billion, an 18 per cent fall on 2007. Operating revenues were $12.9 billion, a 4 per cent drop. The firm announced late last year that it would cut 3,000 from its 44,000 staff.