Fidelity is breaking from tradition and reorganizing six Capital One mutual funds into its own funds.

Sought for comment on the move, Fidelity spokeswoman Sophie Launay told The MFWire: "We've had a long standing relationship with Capital One and when we heard about their decision to exit the proprietary fund business we agreed that the re-organization (of the Capital One Funds into the Fidelity funds) made good sense for the shareholders of both organizations."

In an e-mailed statement, Capital One spokeswoman Julie Rakes said the bank arrived at the decision to get out of the proprietary fund business last year.

"As a matter of standard business practice, Capital One regularly reviews its long-term strategic focus and areas in which to invest. Through that review process, we decided in 2007 that serving in a proprietary mutual fund advisory role will no longer be part of our long-term strategic focus at Capital One Bank."

In an SEC filing dated June 23, Capital One said its board of trustees had approved a plan to reorganize the following funds into corresponding Fidelity funds:

Capital One Capital Appreciation Fund;

Capital One U.S. Government Income Fund;

Capital One Mid Cap Equity Fund

Capital One Total Return Bond Fund

Capital One Cash Reserve Fund

Capital One U.S. Treasury Money Market Fund

Once the funds are merged into the Fidelity funds, Capital One will no longer manage funds but will still offer"third-party mutual funds, investment products and in-house investment management services" to clients, Rakes said.

The move will be submitted to shareholders for a vote during the third quarter. If approved, the reorganization will occur in October.  

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE