The replacement of the Fidelity Global Special Situations fund’s manager has raised hopes that the portfolio’s poor track record can be turned round.
Jeremy Podger, the head of global equities at Threadneedle, will take over the £2.5 billion fund in March, after it was announced that the present manager, Jorma Korhonen, is leaving Fidelity. Sudipto Banerji will run the portfolio in the interim.
Fidelity Global Special Situations has a history of weak performance, losing 1% since its launch in September 2006 against a 16.5% gain in the benchmark MSCI World index. The fund was launched after the group’s decision to split Anthony Bolton’s Fidelity Special Situations fund into two, UK and global, because of its size. (article continues below)
Meera Patel, a senior analyst at Hargreaves Lansdown, says Korhonen’s performance has been “shockingly poor” of late and suggests Podger’s appointment could be good news for investors. “He does have a decent track record and performance has been pretty solid,” Patel says. “We just feel he has the potential to offer greater stability and returns than Jorma has offered.”
Podger’s £736.7m Threadneedle Global Select fund has returned 20.6% over the past five years, above the 12% median seen in its peer group.
However, Patel has yet to meet Podger to learn about his plans for the portfolio and says Hargreaves Lansdown’s opinion of the fund’s prospects will depend on the outcome of this.
Bestinvest has suspended the rating of the Fidelity Global Special Situations fund pending a review of the new manager. Tom White, a senior research analyst at the adviser, says Korhonen’s underperformance is the result of “an ill-timed move” into financials in the summer of 2008 and was exacerbated by this year’s market turmoil.
White agrees Podger has a successful record in managing global funds and notes that his average monthly outperformance over the past 16 years has been 0.22%.
Philippa Gee, the managing director of Philippa Gee Wealth Management, also expects Podger to have a good chance of turning the fund’s performance round. “It was a situation that was just not improving and I’m glad to see that Fidelity has taken action rather than just saying they’d get more support in,” Gee says.