View more on these topics

Fidelity’s flagship steers new course

After undergoing a period of significant underperformance, Fidelity head of IFA channel Peter Hicks believes that the firm’s flagship UK range has seen the light at the end of the tunnel.

Hicks has made no secret of the underperformance of the UK fund range, particularly in 2006 but he believes a number of amendments to the range have changed the outlook.

He says: “We knew that the returns from the UK range were unacceptable for a house like Fidelity but, without tempting fate, we feel we have made all the changes and that returns have started to bear fruit.”

Notable names have come and gone from the firm in the past 12 months.

Anthony Bolton passed on the management of his UK special situation fund to Sanjeev Shah at the turn of the year, having done the same thing with Jorma Korhonen on the global version 12 months before.

Other changes to the range have seen UK aggressive manager Mark Hodges and UK growth manager Carlos Moreno replaced by Aruna Karunathilake and Tom Ewing respectively.

Hicks says: “Some say our range has been floundering but I would say it is rejuvenated, with early indicators that the tide has turned with regards to performance.”

Both UK aggressive and UK growth have been top quartile in one, three and six-month periods since Karunathilake and Ewing took on the funds.

The most recent change saw John Stavis go on a six-month sabbatical from July 1, with management of the income plus fund passing to Michael Clark, while UK growth and income and the UK equity portion of moneybuilder balanced passed to Matt Siddle.

Having once been touted as a potential replacement for Anthony Bolton on UK special situations, Stavis endured a torrid time on his funds, with income plus bottom quartile over one and three years in the IMA equity income sector.

Hargreaves Lansdown head of research Mark Dampier says that it is too soon to judge Fidelity’s new UK team.

He says: “I suppose it is a credit to them because if something does not work you have to change it and they have done that. The problem they face is that apart from Anthony Bolton, the UK team has been underperforming for a number of years now.”

Dampier says he was impressed with the appointments of both Karunathilake and Ewing. “We met them and it seemed that a lot of things they were saying made sense, which has not always been the case. Performance has been good for six months but it is important to realise that it is only six months and with the UK there are so many choices so you need to stand out for long periods.”

Kohn Cougar managing director Roddy Kohn believes that Fidelity has to make many more strides before it completes any great recovery in the UK. He says: “My view is that not only have they lost a number of talented people, their communication to the IFA market has been poor. It is that mixture that has left the door open for the coach and horses to drive all the way through.

“Winning a reputation is easy, maintaining one is much more difficult and once you have lost it it is difficult to get it back. Confidence is a big issue for IFAs when it comes to dealing with a firm, and advisers are becoming more discerning as they look to raise professional standards with the likes of the RDR and TCF in play.”

One thing that Fidelity does have in its favour is that a number of its peers are also struggling with their UK ranges. New Star has openly admitted a need to improve and has taken steps to bring that about, while none of Invesco Perpetual’s six funds in the UK all-companies have achieved top quartile performance in the past three years.

Bestinvest investment analyst Marcel Porcheron says: “The group has also made changes on the analyst side as well as with fund managers. The problem is that apart from Sanjeev Shah, who performed well in Europe prior to taking on UK special sits, none of the new names have a strong track record which we can identify with. But early indicators for performance have been encouraging.”

Fidelity has been known for its decision to promote from within rather than attract managers as the likes of New Star has done in the past. Could now be the time to make exceptions to the rule in order to add some much needed experience to the list of managers?

Hicks says: “We have hired from outside with the likes of Sam Morse coming in from M&G but the case is that we set up an acad-emy for top-class analysts two years ago and these guys are now ready to run mandates and we have faith in them. It is not, nor has it ever been, a cultural decision at Fidelity.”

Dampier says that bringing in new managers does not always work. He says: “I think they have tried to bring in new names. However, bringing in a manager can often be disruptive. Look at New Star where that is the culture and there are names there that it has not worked for.

“Fidelity is almost a career place to work and is very process-driven. People either fit in or they don’t so the recruitment of a big name manager on big pay can be even more riskier than promoting from within.”


Not what the doctor ordered

May’s mortgage approvals figures from the Bank of England were absolutely dire. The figures from the BBA the previous week were bad enough, a 20 per cent fall on the previous month and a 56 per cent fall on May last year, but the figures for total mortgage lending, including the building societies and specialist lenders, are even worse, with a 28 per cent fall on April and a 64 per cent fall on May last year.

Russian resolution

At times like this, we believe investors need to stand back from the market noise and focus on the long-term growth prospects of the regions in which they invest and, on this basis, Russia scores exceptionally highly.

The CII launches podcasts on TCF

The CII has launched a series of podcasts on treating customers fairly aiming to offer a simple guide to the regulation for advisers and insurers.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm