Fidelity shutters, delists funds

Fidelity International is terminating an international fixed interest strategy that failed to scale, as well as delisting a managed fund.

The Fidelity Global Short Duration Income Fund focuses on investment-grade and high-yield corporate bonds that have a low duration. The fund ceases operating effective June 6.

Fidelity said it decided to terminate the fund as "there has been negligible growth since the fund's inception and there is unlikely to be strong future investor demand."

"We have determined that terminating the Fund is in the best interests of all unitholders after considering all available options," Fidelity told investors.

The strategy invests at least 70% of its assets, in debt securities that include investment-grade corporate bonds and government bonds of different maturities, below-investment grade and emerging market bonds, from anywhere in the world and denominated in various currencies. The minimum investment amount is $25,000.

The fund is less than two years old and is managed by James Durance and Peter Khan, both of whom began overseeing the fund in July 2022.

The Fidelity Global Demographics Fund will delist from the ASX in June as an active ETF, pending the exchange's approval.

Fidelity said the fund "is no longer economically viable to maintain the Fund as a dual-access fund by continuing to have the fund's units admitted to trading status ("Active ETF units") and remain quoted on the ASX, given the lack of support for the fund's strategy in the listed channel."

At the end of March, the active ETF units represented about $8.12 million or 7.3% of the fund's total funds under management.

Separately, the fund manager renamed the Fidelity Australian Opportunities Fund to the Fidelity Australian High Conviction Fund.

This is to clearly reflect the nature of the fund's investment strategy, which consists of an actively managed concentrated portfolio of 20 to 40 listed Australian shares, Fidelity said.

The fund was valued at about $186.50 million and returned 8.95% p.a., nearly in line with its benchmark's 9.07 % p.a.

"The above change will not result in any change to the investment approach, objective or benchmark of the Fund. The Fund's current Portfolio Manager (Casey McLean) also remains unchanged," Fidelity told investors.

The change took effect on May 20.