Fidelity gives details on new performance-related fee

Fidelity International has announced it will reduce its annual management fee on its new Variable Management Fee share class by 0.10% and also that its variable annual management charge will be moving between -0.2% to +0.2% depending on performance.

The announcement comes after the company announced in October that it would get rid of its traditional flat fee model and would replace it by a variable management fee for its active equity funds.

The Variable Management Fee – to be launched on 1 March 2018 – will apply initially to 10 active equity funds from its pooled fund range (OEICs/SICAVs) representing some 17% of Fidelity’s total equity assets under management. Additional share classes across Fidelity funds range will be phased in the future.

The company added that clients with segregated portfolios – including institutions and Investment Trusts – will have access to an individually adapted version of the fee model.

Brian Conroy, President, Fidelity International, said: “We are passionate about giving our clients both choice and value, and we believe innovation in fee structures is essential if active fund management is to succeed going forward. Our Variable Management Fee clearly aligns our interests to our clients. We believe this is a meaningful step and also one that we hope will be adopted by the wider asset management industry.”

Paras Anand, CIO, Equities, Europe added: “For any client the returns of active management are realised through long-term investing. We believe that this new fee model allows us to demonstrate our value proposition whilst sharing in the cost during periods of underperformance which all active managers, even the best, experience from time to time. We hope, therefore, that this goes some way to incentivising clients to consider the value of active investing over the long term.”


Eugenia Jimenez
Eugenia Jiménez speaks Spanish and is Iberia Correspondent for Investment Europe covering Spain & Portugal, as well as assisting with coverage of Italy. She holds a UK NCTJ- accredited Multimedia News Reporting course and studied Journalism at the University of Sevilla. She has worked for local media organisations in Sevilla and Málaga, mainly in broadcasting as a news reporter, among other roles. She has also worked for a local newspaper in Sevilla, reporting on current affairs, local government and culture.

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