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Fidelity cash fund may be renamed

Fidelity says it may look at renaming its retail cash fund following last week’s FSA industry warning that the wording could mislead investors.

The group says that it has already renamed its institutional money market funds to use the word liquidity instead of cash, which the regulator says implies investors’ capital is not at risk.

Fidelity’s £324m cash fund, managed by Tim Foster, is one of the largest retail money market funds.

A Fidelity spokeswoman says: “For our retail money market funds, we are open to internal discussions as necessary depending on industry trends.”

The FSA warned in a newsletter last week that ’cash’ may be misleading as the funds can slip into negative yields because their annual management charges erode capital, especially when interest rates are low.

It also raised concerns that there is a lack of criteria over the types of asset the funds are permitted to invest in.

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  1. How jolly decent of Fidelity saying that they may rename their cash funds,I don’t think.What sort of operation are these companies running that they have to wait for a note from the FSA in order for them to act.I would wager Fidelity is not the only one having the affront to act after the horse has bolted.

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