Having trouble finding a Pacific Rim - Equity fund? Well, Fidelity Emerging Asia Fund (FSEAX) would not be a good potential starting point right now. FSEAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FSEAX is classified in the Pacific Rim - Equity segment by Zacks, which is an area full of possibilities. Pacific Rim - Equity mutual funds see big investment opportunities in the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese firms, as Japan mutual funds are very popular.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FSEAX. The Fidelity Emerging Asia Fund made its debut in April of 1993 and FSEAX has managed to accumulate roughly $954.42 million in assets, as of the most recently available information. The fund is currently managed by John Dance who has been in charge of the fund since September of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 5.71%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.66%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. FSEAX's standard deviation over the past three years is 15.11% compared to the category average of 13.84%. The fund's standard deviation over the past 5 years is 14.91% compared to the category average of 13.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, FSEAX lost 63.86% and underperformed comparable funds by 5.89%. This might suggest that the fund is a worse choice than its peers during a bear market.
Investors should note that the fund has a 5-year beta of 0.98, so it is likely going to be as volatile as the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FSEAX has generated a negative alpha over the past five years of -4.1, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FSEAX is a no load fund. It has an expense ratio of 1.02% compared to the category average of 1.41%. Looking at the fund from a cost perspective, FSEAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Fidelity Emerging Asia Fund ( FSEAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Emerging Asia Fund ( FSEAX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Pacific Rim - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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