A fan assembly includes a shrouded fan rotor having fan blades extending from a hub and rotatable about a central axis. A fan shroud extends circumferentially around the fan rotor and secured to the fan blades. The shroud includes a first axially extending annular portion secured to the fan blades, a second axially extending annular portion radially outwardly spaced from the first axially extending annular portion, and a third portion connecting the first and second axially extending annular portions. A casing is located circumferentially around the fan shroud defining a radial clearance between the casing and the fan shroud, and includes casing wedges extending from a radially inboard surface of the casing toward the shroud and defining a radial wedge gap between a first wedge surface and the shroud and an axial wedge gap between a second wedge surface and an upstream end of the fan shroud.