Fidelity Cuts Investment Trust Fees

Charges have been cut on Anthony Bolton's volatile Fidelity China Special Situations closed-end fund, as well as Fidelity Japanese Values trust

Emma Wall 19 March, 2014 | 11:45AM
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Investors in Fidelity China Special Situations (FCSS) will have fees cut from April 1 this year. The board of the trust, run by star manager Anthony Bolton, has announced annual management charges will be cut from 1.2% to 1%.

Earlier this year the board cut the performance fee on the trust – and they have furthered this move by announcing the performance fee cap will be reduced from 1.5% in any given year to 1%. 

The annual fee on Fidelity Japanese Values (FJV) has also been cut retrospectively from 1% to 0.85%, from January 1 2014.

Morningstar closed-end fund analyst Jackie Beard said the reduction in fees at two Fidelity-managed investment trusts was good news for those trusts' shareholders.

“In particular the amendments to the performance fee structure for FCSS are good to see - the ability to carry forward outperformance over and above the fee cap has been scrapped, but the commitment to make good any underperformance remains,” she said. “That's much more shareholder-friendly than was the case previously.”

Bolton announced his retirement from China Special Situations in June last year, following three years of turbulent returns, marred by poor performance that forced the fund to buy back 350,000 shares in September 2011.

Before moving to Hong Kong to set up the China trust in 2010 Bolton had secured an unrivalled reputation as a UK fund manager. His Fidelity Special Situations fund had turned an investment of £1,000 into £148,200 during his 27-year tenure.

Bolton’s replacement Dale Nicholls has been at Fidelity since 1996, and running Asian equity portfolios since 2003. Nicholls will take over the running of the fund in April this year.

“Nicholls—like Bolton—isn’t afraid to take a contrarian stance and differ from peers. He also likes to hunt among the smaller companies as he believes there are many opportunities to be found here, given the lack of broader analyst coverage,” said Beard.

“Until now, he has been running Asian mandates, including some dedicated to small-caps, rather than a single country fund, but there is an element of overlap of Chinese names between his current mandates and Bolton’s fund. That said, we expect some turnover when he takes the reins, as he looks to make the fund his own.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Fidelity China Special Ord242.50 GBX-0.21Rating
Fidelity Japan Trust Ord175.50 GBX0.00Rating

About Author

Emma Wall  is former Senior International Editor for Morningstar

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