Stay invested in Fidelity scheme: Advisors

Fund house that is bought out has to give investors a month to redeem investments without exit load if they don't wish to continue with the new fund mgmt company

If you have investments in any of the mutual fund schemes of Fidelity Asset Management Company, you must have been informed about the exit window between October 15 and November 15.

As per the Securities and Exchange Board of India (Sebi) guidelines, fund house that is bought out has to give its investors a month’s time to redeem their investments without any fee (exit load) if they don't wish to continue with the new fund management company.

However, financial experts are not in favour of investors redeeming their investments from Fidelity. Says Sumeet Vaid of Freedom Financial Planner, “I am very confident that investors will not be impacted with this change of guard. Also parent company L&T's trackrecord has been amazing.”

Before this, after JP Morgan and ICICI's tie-up ended and Prudential walked in, Vaid says those who have stayed on with the schemes through the transition phase have made huge gains. Similarly, investors of Kothari Pioneer, which was taken over by Templeton, have bagged huge profits by sticking on with the new fund management team. And so have investors of Alliance Capital Mutual Fund, which was acquired by Birla SunLife Asset Management Company.

Vaid says, largely new fund management teams have only added value, otherwise what's the use of acquiring a company. L&T acquisition has not impacted returns from Fidelity's schemes. And to keep the good run going for investors, L&T has roped in Soumendra Nath Lahiri to head its equity team. Lahiri has a good trackrecord in his previous stints at Canara Robeco and DSP BlackRock. He could work well in the favour of L&T Mutual Fund. And expert feel, he can easily help generate good returns of Fidelity's investors.

“Then, the existing team is going to handhold the new team for sometime. So, you have time to adjust to the new team till the time they start taking decisions on their own. I feel investors should give 6 months to one year's time before exiting the scheme(s) as they will have a fair idea about L&T's performance by then,” says Hemant Rustagi of Wiseinvest Advisors. All funds, even with a fund manager who has been handling the fund for the longest time, does see low patches, he adds. And most of Fidelity's funds were mostly diversified equity funds and not speciality funds, so there's little to worry for investors.

Rustagi advises against getting carried away by zero exit load in this 1-month window as exit load is anyway not applicable after 6 months of investment.

Over the long term, expert say it doesn't matter, which fund house you've invested with provided you stay invested for long.