Fidelity's tim mccarron, frederic gautier, jed wrigley and anas chakra to run £1.347bn trust
Fidelity European manager Tim McCarron will be one of the four managers working on the £1.347bn Edinburgh Investment Trust under the leadership of Peter Yarrow. The group said it may turn over up to 45% of the portfolio after taking over its management.
Yarrow, who is senior director on the group's UK equities team, will allocate assets between four managers including McCarron, who in addition to the £2bn unit trust, runs the £384.3m Income Plus, £212.3m MoneyBuilder Balanced and £399.3m MoneyBuilder Growth funds as well as the $439.6m Fidelity European Values investment trust.
The other managers are Frederic Gautier, who runs Fidelity's £834.6m UK Growth, Growth & Income, FF United Kingdom and Advisor World Europe funds, and institutional portfolio managers Jed Wrigley and Anas Chakra.
The trust portfolio will be made up predominantly of UK equities, with an underweight position on FTSE 100 stocks and overweight on the mid 250. One sector analyst applauded the decision to move the trust down the liquidity scale, saying there is more value to be found among mid caps than large caps in the current market environment.
Yarrow has said between 45% and 48% of the portfolio could be turned over in the coming weeks as it represents stocks Fidelity does not favour.
The split of assets between the four managers, who together reduce single manager risk, is managed by Yarrow.
He is also responsible for gearing levels, performance and any necessary rebalancing in terms of theme or between managers.
The managers each use a different style, with Gautier having a growth bias, while McCarron is more value-oriented.
Each manager will make their own stock selection decisions and determine their own market capitalisation, sector and other portfolio characteristics.
Fidelity won the contract for the trust last month from Edinburgh Fund Managers in a competitive tender. Management fees under Fidelity have been set at 0.26% per year, compared to 0.3% under previous managers.
Fidelity said the objectives of the trust remain to outperform the FTSE All-Share Index on capital growth terms and provide dividend growth above UK inflation. The firm also said its experience in retail distribution will enable it to broaden the trust's shareholder base, reducing both the size and volatility of the discount to net asset value.
The trust board has said it has no plans to redeem either of its existing 2014 or 2022 debentures as it would be 'prohibitively expensive and significantly damaging to shareholders' asset value'.
Analysts have agreed with the decision, saying that while the burden of the debentures is a negative for the trust, the current low interest rate environment means the premium required to pay them out ahead of maturity would be too high.
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