Fidelity soft closes UK Smaller Companies for second time


Fidelity is to soft close Alex Wright’s UK Smaller Companies fund for the second time since launch in 2008, as assets approach £370m.

The fund was first soft closed back in April 2013 when assets reached £250m, and later peaked at £370m.

It was then re-opened two years later after the appointment of analyst Jonathan Winton as an extra resource, when assets were £260m.

This week, Fidelity has decided to soft close the fund again from 6 April after seeing “strong interest from investors”. This will mean the fund, which is £368m in size, will be removed from all platforms including Fidelity’s own platform, FundsNetwork.

A spokesperson for the firm said: “The Fidelity UK Smaller Companies fund has experienced strong interest from investors in recent months thanks to the fund’s strong performance and track record under the stewardship of co-managers Alex Wright (pictured) and Jonathan Winton.

“Our priority is to protect the interests of existing customers. In order to ensure that the portfolio manager retains the flexibility to implement his investment strategy and is not constrained by liquidity, we are taking steps to slow flows into this fund.

“We have decided to soft-close the fund from 6 April 2016, and will remove it from third party platforms and FundsNetwork. However, existing monthly savings plans will be able to continue.”

The fund has returned 5.4% over one year to 4 March, according to FE Trustnet, versus a 6.6% return from the average fund in the IA UK Smaller Companies sector.

Last year, fund management groups told Investment Week that more action was needed on soft-closures in order to find the best methods to avoid causing problems for investors.

They criticised the lack of a clear soft-close definition by the regulator and problems caused by the differences between various platforms.

[Source:- Investmentweek]