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Fidelity plans to double MoneyBuilder tracker range

by Robert St George on Oct 11, 2013 at 10:32

Fidelity plans to double MoneyBuilder tracker range

Three new index trackers in Fidelity’s MoneyBuilder suite will be launched in the months ahead, the group has confirmed, as it seeks to plug holes in its product range.

Fidelity already offers MoneyBuilder trackers that follow UK , US , European and world equities . To this it will add index funds focused on emerging markets and Asia including and excluding Japan.

Hugh Mullan, Fidelity’s UK managing director, told Wealth Manager that the three funds would be available ‘early next year’. Fidelity has yet to determine their pricing; the existing UK, US and world funds charge 0.1%, and the European one 0.6%.

Mullan (pictured) acknowledged that Fidelity has not traditionally been known as a passive provider, but said that did not mean the house was fundamentally opposed to trackers.

‘Fidelity is a pragmatic organisation,’ said Mullan. ‘Our platform should offer the products that customers want. If you don’t offer a component of what your customers want, you will drive them to competitors.’

However, Mullan stated that Fidelity had no plans to begin manufacturing exchange-traded funds.

Elsewhere in the Fidelity portfolio, Mullan disclosed that he would be looking to roll out more enhanced income funds, which use covered calls to boost dividends. For Mullan, this reflected the shift among older investors from accumulation to decumulation. ‘We’re going to become a retirement business,’ he claimed, noting the success Fidelity’s US arm had enjoyed from building out of its pensions division.

Mullan was more sceptical about the scope for expanding into structured products and absolute-return strategies. He voiced concerns about the former’s lack of transparency, and the unsuitability of the latter for retail investors.

Fidelity does run absolute-return funds for institutional clients, branded as Fidelity Active Strategy (FAST), but Mullan declined to follow other groups’ push into the space. ‘Absolute-return funds work for a while but inevitably they won’t work forever,’ he commented.

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