Fidelity [see profile] wants to raise the price of its oldest mutual fund. Last month the Boston-based mutual fund giant told shareholders of the Fidelity Fund that it plans to increase the management fee for the three-star, $6.1-billion fund while also adding a performance component [see filing].

"Fidelity is FMR's oldest fund [launched April 30, 1930], and for historical reasons it has a management fee that is 0.21 percent below FMR's standard fee for similarly managed funds," Fidelity spokeswoman Sophie Launay told The MFWire in an e-mailed statement. "FMR [Fidelity's parent[ has a long history with performance fees dating back to the early 1970s. Seventy two Fidelity equity funds currently have a performance adjustment."

The Fidelity Fund currently charges shareholders about 61 basis points all-told, including about 35 bps for management. Under the new proposal, the base management fee would jump to 56 bps, and then Fidelity would add or subtract a performance-based fee (up to 21 bps in either direction) based on the fund's over- or under-performance compared to the S&P 500. Shareholders will vote on the proposals (already approved by the fund's board of trustees) on July 12. 

Edited by: Neil Anderson, Managing Editor


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