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Fidelity Fund Proposes Fee Hike

Plus, Wasatch to launch India fund, and more.

Kailin Liu, 04/25/2011

Fidelity proposed to raise Fidelity Fund's FFIDX expense ratio to 0.80% from 0.60%. In a proxy statement filed April 15, 2011, Fidelity proposed to increase the fund's management fee to 0.30% from its current level of 0.09%, as well as to adopt a performance adjustment. Under the performance adjustment, the expense ratio would increase 0.02% with every percentage point of outperformance in a three-year period, and decrease the same amount with every percentage point of underperformance.

Fidelity justified the fee increase by saying it "charges a management fee that is 0.21% below Fidelity's standard fee for similarly managed funds," and that the adoption of the increase "will fairly compensate FMR for the management services provided to the fund."

According to lead Fidelity analyst Christopher Davis, manager John Avery has beaten the S&P 500 by 0.24% annually during his tenure. The fund's proposed fee hikes, once fully implemented, would virtually wipe out that margin of victory.

Wasatch to Launch Emerging-India Fund
Wasatch will launch Wasatch Emerging India on April 26, 2011. A team of portfolio managers, led by Ajay Krishnan and Roger Edgley, will run the fund. Krishnan and Edgley joined Wasatch in 1995 and 2003, respectively.

This is Wasatch's fifth new international fund since 2002, illustrating the shop's increasing international focus. Krishnan is no stranger to investing in India. He currently manages Wasatch Ultra Growth WAMCX, which has 12% in Indian stocks.

Federated Gains $515 Million
Federated will acquire $515 million of equity, fixed-income, and money market assets from EquiTrust Mutual Funds. The portfolios of EquiTrust Series Fund and EquiTrust Variable Insurance Series will merge into comparable Federated mutual funds. Federated held $358.2 billion in assets as of Dec. 31, 2010.

DWS Changes Managers
DWS changed the management teams of DWS Strategic Value KDHAX and DWS International SUIAX. Both funds are now managed by Jason Inzer and Thomas Voecking, and will be run under a "market research" system that synthesizes fundamentally based stock recommendations from 5,000 internal and external analysts globally. Voecking and Inzer joined DWS in 1991 and 1997, respectively.

Volker Dosch, Oliver Pfeil, and Thomas Schuessler previously managed DWS Strategic Value since June 2009. Nikolaus Poehlmann, Andreas Wendelken, and Mark Schumann previously managed DWS International since October 2009. Neither fund had outperformed in the previous management team's tenure.

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