Fidelity International has dropped the Schroder Income fund from its prestigious ‘select list’ following the departure of Ian Lance and Nick Purves as managers.
What Investment.co.uk understands the decision was made as the Fidelity team cited concerns about the immediate capacity of the two remaining fund managers in taking on the Income fund and the other versions of it alongside their existing responsibilities.
Schroders hit back noting that there is a high degree of overlap between stocks in the Schroder Recovery, Schroder Income and IMAX funds.
The company said, therefore, that these managers are certainly not running funds with totally different styles and/or holdings.
Robin Stoakley, managing director of Schroders’ UK intermediary business, said the group has deep talent and experience within the Specialist Value UK Equity team.
He added, ‘I am very confident that Kevin and Nick have capacity to take on the management of Schroder Income Fund.
They have an excellent performance track record, generating top-decile returns year-to-date, and over one and three years and I am positive they will continue to generate strong returns for our income investors.’
While Fidelity dropped the Schroders fund, it has added nine new funds to the list, with the new additions including seven funds in the fixed income sectors, one in North American equities and one in European equities.
The new funds include the GLG Global Corporate Bond fund, JPM Strategic Bond fund, Fidelity Strategic Bond fund and Blackrock US Opportunities.
Eugene Philalithis, portfolio manager at Fidelity International, said there are significant opportunities in credit markets right now with investment grade credit spreads still offering adequate compensation for default risks.
He added, ‘While 2009 was an exceptional year for corporate bond returns, 2010 returns are expected to be more modest. However, we still expect corporate bonds to outperform government bonds.
‘For those investors wishing to look further afield, global bonds offer an opportunity for diversification and extra returns across government and corporate bonds.’
The nine new funds, added to Fidelity Select are:
- Blackrock Continental European
- Blackrock US Opportunities
- Baring Global Bond
- CF Strategic Gilt
- Fidelity Strategic Bond
- GLG Global Corporate Bond
- JP Morgan Strategic Bond
- L&G Dynamic Bond
- Templeton Global Total Return