The newest offerings from Fidelity address two major investing trends: the growing desire for one-fund solutions and rising demand for international investments.
Fidelity Total International Equity (symbol FTIEX) aims to be the only foreign-stock fund you need to own. Holdings are split among four sub-portfolios: growth stocks in developed markets, value stocks in developed markets, all kinds of stocks in emerging markets, and international small-company stocks.
About 80% of the holdings will be from developed countries -- split evenly between growth and value investing style; 15% will be in emerging-markets stocks and roughly 5% will be in overseas small-company stocks. The fund carries a 1.12% annual expense ratio, which is low for the category and should drop as it accumulates more assets.
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A team led by George Stairs and Jed Weiss will run Total International Equity. Stairs will oversee value investing, and Weiss will handle the growth investing. The fund will be supported by analysts in Boston, London, Tokyo and Hong Kong.
Stairs, who has been in the fund industry for 22 years, also runs Fidelity International Value, which started in May 2006. It has returned 15% over the past year through November 15, beating its benchmark by almost 2 percentage points.
Weiss also runs a new growth-oriented fund called Fidelity International Growth (FIGFX). For this fund, he seeks stocks of companies that he thinks will deliver solid growth for at least several years, are in industries with high barriers to entry and appear reasonably priced based on his earnings estimates.
"I'm not a growth-at-any-price investor," says Weiss, who joined Fidelity in 1997. "I do care about valuation, and that valuation is based on my own earnings estimates, which sometimes significantly differ from the consensus."
Buying stocks that are expected to generate growing revenue and profits over several years means the fund should have a lower turnover than similar international growth funds, Weiss says. The fund has a reasonable expense ratio of 1.17% a year.
Weiss has identified some themes in his pursuit of foreign growth stocks. He wants to invest in companies that build and maintain electric power systems. Says Weiss: "We're at a rare moment in history. Both developed and emerging markets are desperately short of power infrastructure. We are seeing blackouts in the U.S. and blackouts in China."
He also likes owners of foreign stock exchanges because it is difficult for new companies to break into that business. Moreover, exchange operators should flourish as global markets converge.
Fidelity Dynamic Strategies (FDYSX) wants to add some oomph to staid all-in-one funds. The fund holds stocks, bonds, cash and a dash of commodities in one portfolio.
It primarily invests in a combination of Fidelity mutual funds and non-Fidelity exchange-traded funds. The ETFs are used to gain exposure to investments that a Fidelity fund does not hold. Jurrien Timmer, Fidelity's director of research, and Andrew Dierdorf, co-manager of Fidelity's 529 plans, run the fund, which has a 1.12% expense ratio.
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