Investors of the £423m Fidelity fund, run by Amit Lodha, were notified this week that there would be some major changes to the investment objective of the vehicle over the next couple of months.
The first adjustment, is a reduction in the portfolio’s number of holdings.
Currently, the fund is permitted to hold between 80 and 120 stocks. The new objective whittles this figure down to 40 to 60 stocks.
The reduction in the number of stocks will occur gradually over the next couple of months, the fund group said.
Perhaps the biggest change, however, is that the global fund will trade in its large-cap bias for a mid-cap preference.
This, of course, will see it overhauling the US tech and finance giants in its portfolio, like Apple, JPMorgan and Alphabet, in favour of mid-sized ventures.
A spokesperson for the investment manager confirmed the rationale behind the alterations was performance driven.
While on a five-year or three-year view, Lodha’s fund has produced greater returns for investors than the IA Global sector average, that gap has narrowed in recent years.
The Fidelity Global Focus fund went from producing returns of 36.7% (versus the IA sector’s 28.9%) to 9.8% against the sector’s 9.7% six months ago.
