Fidelity Moves to Promote Sales in Existing Schemes

Mumbai, Maharashtra, India

Fidelity today said that the mutual fund industry was seeing a strong trend of virtually all new money in equity mutual funds coming via the NFO route, which it said is a worrying development. Analysis of the mutual fund industry's sales data for equity funds for the one year period ending June 29, 2007, shows gross sales at Rs. 90516 crore of which sales in existing schemes were at Rs. 68350 crore and NFO sales stood at Rs. 22,166 crore. For the same period, redemptions were at Rs. 69127 crore, a little over the number reported for sales in existing schemes. Effectively, net sales for the industry at Rs. 21,388 crore show that the growth in the industry in terms of sales (not AUM) has come through NFOs.

Commenting on this, Ashu Suyash, Managing Director and Country Head, Fidelity Fund Management, said, "World over, advice given to investors is that the long term performance track record of a fund is one of the key parameters to look for when choosing a mutual fund. In India, we see greater enthusiasm for new fund offers while several top performing funds do not even find a place in the investors' consideration set. No doubt, NFOs are necessary to broaden the market with new asset classes and innovative products, but, in the investors' interests, existing funds should be marketed equally actively."

In an innovative move, Fidelity is "re-launching" its flagship Fidelity Equity Fund. The re-launch will be supported by an advertising campaign as well as by on the ground activity. The new advertising campaign will be around the Fund's "go anywhere" approach harking back to the original campaign, "one fund that works like five". The Fidelity Equity Fund has no market cap bias, no sector bias, no style bias and therefore straddles the small-cap, mid-cap and large-cap universe of stocks as well as the growth and value styles of investing. This makes it ideally suited as the core holding in any portfolio.

The Fidelity Equity Fund has been a consistent top quartile performer and has outperformed its benchmark BSE 200 index by 17.87% for the one-year period ending June 29, 2007 and by 10.03% since inception. Significantly, the Fund has also outperformed the BSE Sensex, the BSE Mid Cap and the BSE Small Cap indices over the 6-month, 1 year and 2 year periods2. Another point of note are the Fund's annualised returns at 65.85% for the one year period ended June 29, 2007 and 51.52% since inception (May 2005) to June 29, 2007. (Past performance may or may not be sustained in future.)

The Fidelity Equity Fund also scores high in a research done by an independent agency on a risk-adjusted returns basis which is determined by the Sharpe ratio, a widely used measure. The Fidelity Equity Fund ranked 4 out of 162 diversified equity funds in the 1-year Sharpe rankings and it ranked 14 out of 111 diversified equity funds in the 2-year Sharpe rankings3. (Source: Valueresearch. Past Performance is no guarantee of future results.)

Sandeep Kothari, Fund Manager, Fidelity Equity Fund, says, "The go-anywhere approach of the Fund allows flexibility in portfolio construction without an inherent bias towards any sector or market cap. Stocks that find a place in our portfolio reflect our conviction in these stocks that is based on learning as much as possible about the company through our rigourous research process."

The minimum amount for lump sum investments is Rs 5000. The entry load is 2.25% for each purchase of less than Rs 5 crore. For amounts greater than or equal to Rs 5 crore or by an FOF or on dividend reinvestment or through switch-in from equity schemes, the entry load is NIL. There is an exit load of 1% for redemptions within the first six months. The Systematic Investment Plan (SIP) option is available with a minimum requirement of 6 instalments and each single instalment for a minimum of Rs. 500 and totalling not less than Rs. 5000. The entry and exit loads are the same as for lump sum investments.

Fidelity Fund Management Private Limited is the Indian arm of Fidelity International Limited, one of the world's leading global investment management companies with operations in 23 countries. Fidelity International provides mutual funds, retirement services, including defined benefit and defined contribution pension schemes, and specialist institutional mandates to individual and institutional investors outside the Americas. In 2006 alone, Fidelity won 2774 awards for investment excellence - an outcome of consistently following its philosophy of 'bottom-up' stock picking that focuses on the core strengths of a company based on first-hand, 360-degree research. Fidelity International along with its US affiliate, Fidelity Management and Research Co., actively covers 95%5 of the world market capitalization through its unrivalled research network of over 7006 investment professionals. Central to Fidelity's success is a pioneering spirit, a commitment to innovation that sets new industry standards and an unmatched investment in research, talent and technology. Driven by an entrepreneurial culture, Fidelity is known to actively pursue investor education and distributor training, which it has also begun in the country.

Scheme classification & investment objectives:

Fidelity Equity Fund ("FEF") is an open ended equity growth scheme with an objective to generate long-term capital growth from a diversified portfolio of predominantly equity and equity-related securities.

Risk factors:

-- Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the schemes or that the schemes' objectives will be achieved.

-- As with any investment in securities, the NAV of the Units issued under the schemes can go up or down depending on various factors and forces affecting capital markets.

-- Past performance of the Sponsor or mutual funds managed by the Sponsor does not indicate the future performance of the schemes of Fidelity Mutual Fund.

-- FEF is the name of the scheme, and these do not in any manner indicate the quality of the schemes, its future prospects or returns.

-- All the schemes shall be subject to the risks associated with the instruments in which they invest. Please read the offer document of the scheme before investing. Investors can contact ISCs at the toll-free number "1 800 180 8000".

Statutory:

Fidelity Mutual Fund ('the Fund') has been established as a trust under the Indian Trusts Act, 1882, by Fidelity International Investment Advisors (liability restricted to Rs. 1 Lakh). Fidelity Trustee Company Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Trustee to the Fund. Fidelity Fund Management Private Limited, a company incorporated under the Companies Act, 1956, with a limited liability is the Investment Manager to the Fund. Fidelity, Fidelity International and Pyramid Logo are trademarks of Fidelity International Limited.

Source: Fidelity Fund Management (Business Wire India)

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