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Kip 25

A Fidelity Manager Takes a Break

Vincent Montemaggiore will mind the shop at Fidelity International Growth while Jed Weiss is on sabbatical.

One of the perks of running a foreign-stock fund is that you get to see the world on the boss’s dime. But for most of the second half of 2017, Jed Weiss, manager of Fidelity International Growth (symbol FIGFX), will foot the bill himself as he takes a five-month sabbatical and spends family time visiting Europe, Asia and Africa. While Weiss is away, Vincent Montemaggiore, who runs Fidelity Overseas (FOSFX), will manage International Growth. Both funds focus on large foreign firms with superior growth potential.

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We’re jealous of Weiss, but we’re not worried about International Growth, a member of the Kiplinger 25, in his absence. Since Montemaggiore took over Overseas in early 2012, the fund has beaten the MSCI EAFE index, which tracks shares of large foreign companies, by an impressive 3.9 percentage points per year, on average.

More important, Weiss and Montemaggiore share similar investment philosophies. Both favor firms that have a competitive edge in their industry—particularly those that can raise prices for products without re­ducing demand, a trait that Weiss says can buoy a business in rough times. Both managers are value-sensitive, too, but Monte­maggiore says he is more willing than Weiss to invest in a lower-quality company if the stock is cheap enough. However, Montemaggiore says he has no plans to change things at International Growth during this five-month stint. “The plan is to keep the ship moving in the direction Jed has set,” he says.

Lineup change. Another foreign-stock fund in our fold, FMI International (FMIJX), has closed to new investors. We applaud the policy of shutting a fund as assets swell, but it means we must, as is our policy, find a replacement for it in the Kiplinger 25. Readers who hold shares in FMI International should stick with it. The fund returned a cumulative 19.2% since we added it to the Kip 25 in early 2015, double the 9.6% return of the MSCI EAFE index.

We’re replacing FMI with Oakmark International (OAKIX), a value-oriented fund with a terrific long-term record, reasonable fees (1.00% per year) and, in comanager David Herro, a seasoned pro who has been with the fund since its 1992 launch. We’ll tell you more about him and the fund in next month’s issue.

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