The fund, run by Sanjeev Shah, represents the UK element of the flagship fund managed by Anthony Bolton for 27 years.
Fidelity experts said the fund’s lack of consistent performance was to blame for it being dropped from the list.
Meanwhile, Derek Stuart’s Artemis UK Special Sits Fund; Richard Plackett’s BlackRock UK Special Sits Fund; Alastair Mundy’s Investec UK Special Sits Fund; and Ben Whitmore’s Jupiter UK Special Sits Fund are all still recommended in the Select List’s UK equity sector.
Living in a shadow
After Bolton stood down in 2007 his £6bn fund was split approximately down the middle, with Shah and Jorma Korhonen (the appointed manager of the Global Special Situations Fund) given £3bn each.
In December Fidelity announced Korhonen was to step down from the Global Special Situations Fund, following a dismal five-year tenure that saw his fund eroded to £1.37bn and ranked in the fourth quartile over six months, one year and five years.
Ex-Threadneedle head of global equities, Jeremy Podger has been brought in to try and salvage the fund’s reputation.
Read our analysis of Podger’s appointment and whether he can improve the Global Special Situations performance.
Shah has also had a tough time preserving Bolton’s legacy, with his fund falling to £2.4bn AUM as at 29 February.
While slightly more impressive than Korhonen, Shah’s performance has been patchy in the past five years.
Patchy performance
Over one and three years Shah is ranked in the fourth quartile, according to FE Analytics, with a loss of 2.43% last year versus sector returns of 0.28% and benchmark returns of 0.69%. Over three years he has returned 56.92% compared to 70.14% from the IMA UK All Companies Sector and 74.69% from the FTSE All Share Index.
Specifically, Fidelity’s experts said: "While, we feel that the manager has a strong process and discipline around analysing and selecting stocks for his portfolios, the fund has performed less consistently than its peers over a rolling 3 year period. We will continue to monitor the fund closely."
A spokesperson for the company added that all funds on the select list go through the same process and there are a finite number of funds that are recommended. "Whether it is a Fidelity fund or another company’s fund does not affect its place on the list," she added.
According to the spokesperson, Fidelity are not looking to make any changes to the fund, in terms of manager, and the performance has improved in the past six months putting it in the top quartile over that timeframe.
The fund has returned 18.08% in the six months to 2 April, compared to 15.01% from its benchmark and 15.56% from the sector.
