Fidelity Investments Canada is proposing to implement a fixed administration fee for all Fidelity mutual funds. As a result, the management expense ratios for each series of Fidelity funds would become more predictable and transparent.

Implementing a fixed administration fee will change how operating expenses are charged to each fund. Operating expenses presently comprise a portion of the MER that varies from year to year, making it difficult to predict the MER from one year to the next.

Subject to investor approval, Fidelity Investments will bear all of the operating expenses of the Fidelity funds other than the GST and certain specified fund costs. If the proposal is approved by investors, Fidelity will replace fund-operating expenses with a fixed administration fee that will average approximately 0.24% for balanced funds (including packaged solutions), 0.29% for North American equity funds, 0.33% for global equity funds, and 0.11% for fixed income funds. Similar fixed-fee proposals have been adopted by unitholders at a number of Canada’s largest mutual fund companies.

“Replacing operating expenses with a fixed administration fee will allow the MER for each Fidelity fund to become more predictable and provide investors with greater certainty about the costs of investing in a Fidelity mutual fund,” said Peter Bowen, vice president and fund treasurer, Fidelity Investments Canada ULC.

Investors in Fidelity funds will receive an information circular with full details of the proposal and a proxy in late September as required by securities regulators. A special meeting of investors will be held on Oct. 27, to vote on the proposal. If the proposal is approved, the fixed administration fee will be effective on Jan. 1, 2010.