Tim McCarron stepping down at Fidelity European

UPDATED: Surprise manager departure at a vaunted Fidelity fund

Christopher J. Traulsen, CFA | 02-12-09 | E-mail Article

Fidelity's all-star European manager Tim McCarron will be stepping down at the end of 2009, with Sam Morse scheduled to take the reins at his £3.66 bn Fidelity European fund.

The move is a surprising development to say the least. McCarron is having a struggle this year as he was too defensively positioned to benefit from the recent market rally, but his long-term record remains stellar and his fund had earned an Elite rating from Morningstar's qualitative research team.

Morse, manager of Fidelity Moneybuilder Growth is an intriguing choice, but an odd fit. Our qualitative research team thinks highly of him--his fund has earned a Morningstar Qualitative Rating of Superior, but his recent work is primarily in UK equities (although he dabbles a bit in European equities at Moneybuilder Growth, it was nearly 90% UK at last count). His style, which focuses on companies he believes can consistently grow their dividends, is also quite different from that employed by McCarron, who has a stronger bent towards growth.

The move, as is often the case at Fidelity, is resulting in further manager changes. When he takes on Fidelity European, Morse will hand off Fidelity Moneybuilder Growth to James Griffin. Griffin's public track record is short. He took the helm of Fidelity Institutional UK Specialist in late November 2008, and since then has done exceedingly well--the fund returned 41.8% from 1 Dec 2008 through 31 Oct 2009, compared to 25.6% for the FTSE All Share and 29.6% for the average Morningstar UK Large-Cap Growth fund. It should be noted that fund carried a much lower TER than his new charges (0.90% per annum).

In addition, Matt Siddle, manager of Fidelity Growth and Income, Fidelity Funds - United Kingdom, and the equity sleeve of Fidelity Moneybuilder Balanced--is moving to Fidelity's European research team. Griffin will take on Growth and Income and United Kingdom. Michael Clarke will take on the equity sleeve of Moneybuilder Balanced funds. Growth and Income had been rated Standard by Morningstar analysts.

Christopher J. Traulsen, CFA, is Director of Pan-European and Asian Research for Morningstar Europe. He would like to hear from you, but cannot give financial advice. You can contact the author via this feedback form.
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