Why Investing Style Matters for This Fidelity Fund
The Fidelity International Growth Fund shows what's impacting returns on international stocks.
Funds that invest in foreign stocks have had a banner year, but how good a year depends on investing style.
Overseas, value-priced shares did twice as well as their growth counterparts over the past 12 months. That goes some way to explain why Fidelity International Growth (FIGFX) — a member of the Kiplinger 25, our favorite no-load mutual funds — with a 12-month gain of 15%, kept pace with its peers (large foreign growth stock funds) and its benchmark, the MSCI EAFE Growth Index, but lagged the broad MSCI EAFE bogey, which increased 23% over the same period.
Theme-driven investments helped buoy the fund's returns. For a start, the U.S. isn't the only place to find fast-growing artificial intelligence (AI) infrastructure stocks, says manager Jed Weiss.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Taiwan Semiconductor Manufacturing (TSM), a dominant maker of artificial intelligence chips, doubled in price over the past year. Defense spending has ramped up, too, especially in Europe and Japan. Stock in BAE Systems (BAESY) rose a whopping 62% in 2025, though it has retreated some since the start of the year.
Then there's the dynamic world of cement. The industry has been consolidating as more stringent carbon emissions standards and higher energy costs have iced out small companies. Big cement firms — such as Switzerland-based Holcim (HCMLY) — up 39% over the past 12 months — are seeing accelerating market share gains, says Weiss.
But there were also AI-related drags on the fund's performance. Not owning some power companies and electrical components makers — AI infrastructure plays — that did well hurt the fund's returns, says Weiss. And unexpected AI disruptions challenged some holdings, including RELX (RELX), the U.K. company that owns the legal database LexisNexis, and SAP (SAP), the German software giant. (As of March, the fund didn't hold either stock.)
Weiss favors firms with a niche in their industry and good multiyear growth prospects. Price matters, too. Since he launched the fund in 2007, he has delivered a 6% annualized return — well ahead of the broad MSCI EAFE Index and its peers.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related Content
