US star manager quits Fidelity

INVESTORS in the highly rated Fidelity American fund are deciding whether to take the exit after the resignation of star manager John Muresianu. Several financial advisers have suspended the £1.4bn fund from their 'buy lists' but are telling existing investors to stay put until there is a clearer picture of how the new manager performs.

Boston-based Muresianu, 48, has left to run his own portfolio so he can spend more time with his family. He has run the fund since the end of 1997. It is the best performer out of 68 North America funds over five years, according to fund ratings firm Standard & Poor's, returning 263% compared with an average of 40% for the sector.

He famously invested heavily in dotcom stocks as the technology bubble inflated and got out before it burst in early 2000. More recently punts on booming gold stocks have helped the fund to shine.

Muresianu will be replaced by Fergus Shiel, 44, who has managed American funds at Fidelity since 1990. His main responsibility since June 1996 has been the firm's $5.5bn Independence fund. It has returned 62% over the past five years, easily beating an average of 15% for its sector.

Chartwell, a Bristol-based firm of financial advisers, said the change at Fidelity is the most significant of a string of recent manager moves within the industry. 'This is a big, big blow to Fidelity,' said Patrick Connolly, associate director at Chartwell. 'The American fund was one area where they were clearly head and shoulders above the competition.'

Chartwell and investment adviser Bestinvest have both taken the funds off their buy lists until they see how the new manager performs. Chartwell said investors looking to punt on a US fund should plump for Credit Suisse Transatlantic, Threadneedle American Select Growth or the riskier Schroder US Smaller Companies fund instead.

Bestinvest recommends investors pick a low charging US index tracker, such as the one offered by Legal & General, and then spice up their portfolio with an actively managed fund focusing on medium-sized and smaller companies, such as the Govett US Opportunities fund.

It warned that the Fidelity fund is also relatively high risk. Even Fidelity accepts that relative to its other funds, the risk level of the American fund is 'high'.