Fidelity cash fund may be renamed

Fidelity says it may look at renaming its retail cash fund following last week’s Financial Services Authority (FSA) industry warning that the wording could mislead investors.

The group says it has already renamed its institutional money market funds to use the word liquidity instead of cash, which the regulator says implies investors’ capital is not at risk.

Fidelity’s £324m cash fund, managed by Tim Foster, is one of the largest retail money market funds.

A Fidelity spokeswoman says: “For our retail money market funds, we are open to internal discussions as necessary depending on industry trends.” (article continues below)

The FSA warned in a newsletter last week that ’cash’ may be misleading as the funds can slip into negative yields because their annual management charges erode capital, especially when interest rates are low.

It also raised concerns that there is a lack of criteria over the types of asset the funds are permitted to invest in.