Fidelity introduces performance-related variable fee on active funds

The group said the move was "in response to the growing debate around the value of active fund management".  The change will involve a reduction of the annual management fee and a switch to a variable management fee that is symmetrically linked to fund performance. This variable management fee operates as a sliding scale and acts as a two-way sharing of risk and return - also known as a 'fulcrum fee'. When a fund delivers outperformance net of fees, Fidelity will share the upside, whereas if it underperforms investors will pay lower fees. The costs that clients will pay will sit wi...