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Friends aims for Fidelity sits switches

Advisers have criticised Friends Provident’s UK special situations fund which has been launched as an alt- ernative to Fidelity’s special sits split.

The new life and pension fund aims to replicate the geographical exposure of Fidelity’s original fund and is made up of three extern- ally managed funds – Merrill Lynch UK special situations fund, M&G recovery fund and Artemis global growth fund.

The Merrill Lynch and M&G funds will each make up 42.5 per cent of the port- folio with Artemis making up the remaining 15 per cent.

Hargreaves Lansdown head of research Mark Dampier says he thinks it is a strange move for the life office and asks why advisers and execution-only brokers would pay to use the fund when they could just do it themselves.

He says “This looks to me like marketing spin on the back of Fidelity. I cannot get thrilled about it. If they had done something like Norwich Union and Schroders, which was an innovative solution, then I would have applauded it. It just loses me.”

The fund is initially only available to Fidelity customers wanting to switch out of its special sits fund. The switching service is free. Annual charges are fixed at 0.75 per cent.

The fund will be made available to other investors in the final quarter of this year. It is in the UK All Compan- ies sector with at least 80 per cent invested in UK company shares and the rest invested overseas.

Chelsea Financial Services bond and VCT manager Matthew Woodbridge says: “It is a slightly odd move. It looks to be a watered-down fund of funds and is unchartered territory really. I do not know who would buy it when they could just do it themselves.”

Friends Provident man- ager of the fund strategy and selection group Marc Haynes says: “We do not take margin on the fund product on the pension side.

“We are adding value by doing all the hard work for them with monthly rebalancing and we have negotiated it so that there are no additional costs of bolting the funds together.”


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