Fidelity Investments’ recent decision to merge two highly specialized single-country funds into regional funds may signal a growing disinterest in niche funds, Dow Jones reports. And fund companies might also be looking to trim operational costs through economies of scale.
Analysts have long spoken against single-country funds because of their volatility.
The Fidelity Nordic Fund will be merged into the Fidelity Europe Fund, and the Fidelity Advisor Korea Fund will become part of the Fidelity Advisor Emerging Asia Fund.
“The underlying message is that more diversification is the way to go, and that a lot of the things you see in specialty funds you can also find in broader funds,” said Steven Howard, a partner with Thacher Proffitt & Wood. “We will see more of this. In the next few months, you will see other large financial groups and holding companies making strategic moves.”
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