Fidelity cuts fees on China and Japan investment trusts

Fidelity is to cut the annual management charges on the Fidelity China Special Situations investment trust and reduce its performance fee cap when manager Anthony Bolton retires next month.

The fee cut also ends commission payments to advisers who bought the trust through Fidelity’s Isa or share plans.

Mr Bolton officially hands over the reins of the £815.4m trust on April 1 to Asian equities manager Dale Nicholls. From that date the annual management charge will be cut from 1.2 per cent to 1 per cent.

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It follows a similar move by Fidelity last year, when the annual charge was cut from 1.5 per cent to 1.2 per cent.

The trust’s performance fee is currently capped at 1.5 per cent of assets, but this will be reduced to 1 per cent on April 1, and will apply to any performance fee earned in the current financial year. The fee is only charged if the portfolio’s return is more than 2 per cent above the return from the MSCI China index over the course of the trust’s financial year.

Trust chairman John Owen said the fee cut reflected the “significant changes to pricing following the introduction of the RDR”.

“Both the board and Fidelity believe that this pricing will be attractive to new investors considering Fidelity China Special Situations and this will be to the benefit of investors in the [trust] overall,” he added.

After a torrid 2011, Mr Bolton’s trust returned to positive territory this last summer and its share price has now gained 3.8 per cent since it was launched in April 2010. Its portfolio gained 16.5 per cent in that period. The trust is trading at an 11.2 per cent discount to the value of its assets

Meanwhile, Fidelity has also cut the annual charge for its Fidelity Japanese Values trust - run by Shinji Higaki - from 1 per cent to 0.85 per cent, backdating the change to January 1.

David Robins, chairman of the Fidelity Japanese Values trust, said the trust’s assets had “grown significantly” in the past year.

In three years the trust’s shares have gained 26.8 per cent, while its portfolio has risen in value by 29.2 per cent. Its current discount is 11.1 per cent.