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Fidelity caps TER of new multi fund

Fidelity is to set up a multi-manager distribution fund in early September to be co-managed by Richard Skelt and Simon Mungall.

It will aim to deliver an income equivalent to at least 125 per cent of the yield of the FTSE Allshare index before charges and will be in the Investment Management Association’s cautious managed sector.

The fund will typically hold between 10 and 15 funds and is expected to launch with an asset allocation of 40 per cent predominantly UK equities, 40 per cent fixed interest and 20 per cent property. The total expense ratio of the portfolio will be capped at 2 per cent, in line with Fidelity’s existing suite of four multi-manager funds.

The fund is expected to be initially made available through the major fund platforms,including FundsNetwork, by the end of September.

Skelt, head of Fidelity’s strategies group, and Mungall, fixed-interest analyst and portfolio manager at the fund company, will be backed by a team of analysts.

Chelsea Financial Services managing director Darius McDermott says: “Traditionally, multi-manager products are expensive and most have uncapped charges. Fidelity seems to have done a good job of capping its TER at 2 per cent. This is another multi-asset multimanager product which will look to outperform the market through asset diversification.”

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