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Wright’s stellar Fidelity small cap fund races towards soft-closure
by Emma Dunkley on Jan 23, 2013 at 14:00
Fidelity’s UK Smaller Companies fund is fast heading towards soft-closure, as the fund’s assets are snowballing at a rapid rate on the back of stellar performance.
The fund, managed by Citywire AAA-rated Alex Wright, has returned 41.69% over one year, far outstripping the benchmark’s 25.71% return, making it the top performer in this sector.
However, the fund has experienced very fast growth and could soon reach soft-closure level.
One investor said: ‘Alex Wright’s Fidelity UK Smallers has gathered some significant momentum and is racing towards its soft-close point all of a sudden’
‘On Lipper, the fund was around £42 million June last year, and I believe around £180 million today. In my experience, that type of momentum accelerates as a fund approaches soft-closure.’
The investor added: ‘I would bet it reaches the limit very soon - it could take just one very lumpy buyer.’
Fidelity said it initially planned to limit the fund’s size at around £250 million, allowing for market movements, in order to protect Wright’s flexibility.
A spokesperson for the group said: ‘This remains our plan and we are monitoring flows. At this stage, no decision has been made regarding the mechanism we will use to control flows.’
Over three years, the strategy has returned 82.99%, versus the benchmark’s 44.96%.
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