Fidelity launches low-cost funds

Secial-offer-signFidelity Worldwide Investment is to launch low-cost versions of its multi-asset funds, which will use index funds to implement asset allocation decisions.


As active managers have come under pressure to justify their fees several groups have either launched low cost funds or are planning to do so.

Fidelity’s new range will be managed by Trevor Greetham, the asset allocation director. Greetham will use the same active asset allocation as the existing multi-asset funds, which include the Multi-Asset Defensive, Multi-Asset Strategic and Multi-Asset Growth funds.

His funds are managed solutions based on three different risk profiles. Greetham can invest in cash and bonds when aiming to preserve value; or he can invest in property shares, equities and commodities when aiming for growth.

Fidelity has determined a long-term strategic asset allocation for each fund. These strategic allocations are shared between the new multi-asset allocator funds and the existing funds in the range.

Greetham will use an investment clock and other quantitative models to actively tilt the asset allocation away from the strategic benchmark, depending on economic conditions and investment opportunities.

“Today’s volatile markets highlight only too well how important it is to maintain a diversified portfolio,” says Greetham. “Multi-asset funds are particularly appropriate at a time of short, violent economic cycles such as this as different assets in the mix tend to do best at different times.”

Share classes will include a 1% annual management charge with a trail commission of 0.5% or a 0.5% charge.

Fidelity follows Schroders Investment Management and JP Morgan Asset Management, which have also recently launched low-cost funds.

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