Skip to main content

Fidelity Special Values spurns ‘fulcrum’ as it cuts charges

10 July 2018

Fidelity Special Values becomes second investment trust in Fidelity stable to reject its variable 'fulcrum' fee as its cuts the amount it pays fund management group.

Fidelity Special Values (FSV) has become the second investment trust in the Fidelity stable to reject the variable 'fulcrum' fee launched by the fund management group last year.

While Fidelity Japan (FJV), Fidelity Asian Values (FAS) and Fidelity China Special Situations (FCSS) have all switched to the new method, which varies the annual charge paid to Fidelity by plus or minus 0.2% depending on whether its returns beat a performance benchmark, Fidelity Special Values has followed Fidelity European Values (FEV) in espousing a simpler tiered charge.

From September shareholders in the £742 million portfolio run by star stock picker Alex Wright will no longer pay the current fixed annual fee of 0.875% to Fidelity. Instead the rate will fall to .85% of net assets up to £700 million and 0.75% above that, a move Numis Securities estimates will lower its overall fee from 0.96% to 0.86%. 

Fidelity has also agreed to slash its annual administration fee for non-portfolio management services to £100,000 from £600,000 a year.

Chairman Andy Irvine said he was pleased to offer this ‘useful saving for shareholders.’

Fidelity launched the ‘fulcrum fee’ last October, applying it to all its actively run open-ended investment companies and starting discussions with the boards of its investment trusts.

Like Special Values, the European Values board earlier this year opted to tier its fees to the fund manager, negotiating a reduction in the 0.8% annual management fee to 0.75% for assets over £400 million. This lowered its overall charge to 0.79% from April.

The most significant change has occurred at Fidelity China Special Situations which in its annual results last month announced it was adopting the fulcrum and scrapping its previous policy of charging a performance fee of up to 1% on top of a base 1% annual charge.

Instead its base fee has fallen to 0.9% but can vary between 0.7% and 1.1% depending on whether and by how much fund manager Dale Nicholls beats the Chinese stock market.

Wright is a Citywire A-rated fund manager for the performance of his open-ended funds, including Fidelity UK Smaller Companies.

Investment company news brought to you by Citywire Financial Publishers Limited.


View the latest investment company announcements or search the 12 month archive.

View announcements

Saving for children

Discover saving for children with investment companies.

Find out more