The deal will see Ocado share certain technology, logistics and distribution services with Morrisons to enable the latter to build an online grocery business.
Back in March when Ocado and Morrisons first disclosed they were in talks the share price surged 20%.
Manager of the Fidelity fund Tom Ewing said of the deal: “Beyond the transformational financial implications it demonstrates that Morrisons agrees with our view that online will be the primary driver of future growth in grocery retail in the UK and around the world.
“Ocado, by continually focusing on the long term rather than the next quarter has developed world-leading technology in this area and stands to be a key beneficiary of consumers’ relentless pursuit of value, convenience and range.”
Ewing holds 4% of his £378m fund in Ocado, his sixth-largest position in the portfolio.
Shares in the group rose 28.8% in morning trading to 260p, up from 86p at the start of the year.
The firm’s deal with Morrisons included the sale of assets and half the existing capacity of its Dordon customer fulfilment centre, used for processing orders.
Ewing concluded: “Ocado’s potential has been consistently underestimated by the city consensus. This deal could mark the beginning of a significant shift in the market’s perception of the company and a recognition of the extraordinary economic value in its intellectual property.”
His fund is ranked in the top quartile year-to-date, with returns of 13% versus 10.3% from the index. Its performance has lagged over one and three years, however, with returns of 13.6% and 21% versus 16.8% and 28.7% from the index respectively.
The graph below shows the fund’s performance versus its sector over one year.
true