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Fidelity to merge two multi-manager funds

Fidelity Worldwide Investments is to merge the £3m Fidelity MultiManager Balanced Portfolio and £106m Fidelity MultiManager Income Portfolio funds.

The asset manager decided to merge the Balanced Portfolio into the Income Portfolio due to its smaller size and higher total expense ratio of 2.17 per cent, compared to the Income Portfolio’s 2.1 per cent.

The combined fund will be renamed the MultiManager Balanced Portfolio to reflect the change.

It will be managed by current Balanced Portfolio and Income Portfolio manager Eugene Philalithis, with Ayesha Akbar who co-manages the Balanced fund.

The merged fund will see its benchmark changed to that followed by Trevor Greetham’s Fidelity MultiAsset Strategic fund. The composite benchmark will be composed of a 50 per cent exposure to growth assets – such as equities, commodities and property – and 50 per cent to strong value assets, including bonds and cash. The manager will make asset allocation decisions in relation to the benchmark.

The merger is subject to shareholder and regulator approval.

The Fidelity MultiManager Balanced Portfolio is currently second quartile in the Investment Management Association Mixed Investments 40-85% shares sector over three years having returned 18.1 per cent compared to the sector average of 18.2 per cent. The Fidelity MultiManager Income Portfolio is second quartile in the IMA Mixed Investments 20-60% shares sector over three years having returned 19.1 per cent compared to the sector average of 16.3 per cent.

Chelsea Financial Services managing director Darius McDermott says: “There are too many funds in the industry at the moment so sensible mergers are always welcome.”

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