Fidelity trims management fees to become more competitive

September 08, 1996|By BLOOMBERG BUSINESS NEWS

BOSTON -- Fidelity Investments has reduced the management fees of its Asset Manager, Balanced and Puritan portfolios in steps analysts said should make the funds more competitive with rival funds.

The No. 1 U.S. fund company cut a component of the management fee of the $10.5 billion Asset Manager Fund by 15 basis points, or $1.50 per $1,000 invested. Asset Manager Fund now has a management fee of 56 basis points, or $5.60 per $1,000 invested.

Fidelity said it lowered the overall management fee of its $16.7 billion Puritan Fund by 5 basis points, or $5 per $1,000 invested. The fund's management fee now stands at 46 basis points, or $4.60 per $1,000 invested, the company said.

The $4 billion Balanced Fund was reduced by 5 basis points, or $5 per $1,000 invested, to 46 basis points, Fidelity said.

The new fee structure for the Asset Manager, Puritan and Balanced funds went into effect Aug. 1, Fidelity said.

"It's the first reduction in the fee structure that I can remember Fidelity making for a long time," said Jack Bowers, editor of Fidelity Monitor, an independent newsletter that tracks the mutual fund giant.

Mutual fund companies are under increasing pressure to lower fees to attract investors. Vanguard Group, the No. 2 U.S. fund group, is known as the industry's lowest cost marketer and the strategy is helping the company report above-average fund sales this year.

Fidelity said it historically has lowered its fees as fund assets grow. In the case of Asset Manager, Puritan and Balanced funds, "we reassessed the fee structure to benefit shareholders due to a recent change in the way we manage the funds," said Camille Lepre, a Fidelity spokesman.

Pub Date: 9/08/96

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