Shaughnessy’s replacement Hugh Mullan, has until now worked as chief operating officer out in Europe, so let’s hope he knows what he’s getting himself in for.
It seems Fidelity’s equity products are having a harder time convincing investors of their worth, witnessing £2.4bn* in outflows in the year to 29 February.
Unsurprisingly, the chief culprits were Sanjeev Shah’s Fidelity Special Situations Fund, with £475m in net outflows; Sam Morse’s Fidelity European Fund, with £404m in net outflows; and the Fidelity Global Special Situations Fund, which was until recently managed by Jorma Korhonen and has seen £243m in net outflows year-to-date.
I say unsurprisingly because both Shah and Korhonen’s funds have disappointed investors during their five-year tenure, which marks the split of Anthony Bolton’s legendary Special Situations Fund into the current global and UK-focused mandates.
Meanwhile, Morse’s fund was largely responsible for Fidelity’s place at the top of Bestinvest’s bi-annual ‘Spot the Dog’ list in August last year.
Fixed income fares better
At a glance, the fixed income side at Fidelity seems to be doing slightly better, registering inflows of £530m in the year to the end of February.
The Fidelity Strategic Bond Fund is the only retail fund to have seen significant inflows, however, (£260m) while two institutional corporate bond funds are responsible for a combined total of £233m in net inflows.
Shaughnessy is also not the only significant senior departure in the past year. Back in June, head of UK equity product management Peter Hicks left, with William Russell taking over as acting head. No permanent replacement has yet been announced.
Then in September CEO of the European business, Robert Higginbotham left, with Thomas Balk expanding his role as president of the Japanese business to become president of financial services for the whole company.
It’s all very well recruiting from within, but this practice of extending job remits to cover more than one role must leave the staff feeling stretched.
Not so on the fund side.
Attempt at change
Clearly the firm has recognised it needs to rejuvenate its performance in some key areas if it is to turn its fortunes around.
Ex-Gartmore equity income manager Daniel Roberts is one high-profile hire Fidelity made towards the end of last year. And it has now launched a Global Dividend Fund for him to run.
Threadneedle’s former head of global equities, Jeremy Podger was also poached towards the end of the year and started this month as lead manager of the Global Special Situations Fund, with Korhonen given the boot.
The launch of a Global High Yield Fund for Peter Khan and Ian Spreadbury shows the group is also trying to play to its fixed income strengths.
But Mullan will need a greater artillery of ideas to really enact change.
According to Morningstar, of 62 UK-domiciled funds managed by Fidelity, 34 had net outflows in the past year, three were flat and 12 had inflows of less than £10m.
The cracks are starting to show, let’s hope Mullan has at least got some polyfilla.
Have you pulled your clients out of any Fidelity funds lately? If so, which ones?
* All figures sourced from Morningstar
