Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.
Is bloat catching up with Fidelity Diversified International? Since shutting the door to new clients in October 2004, assets have ballooned from $18 billion to nearly $46 billion. But after having outpaced the average diversified overseas fund for 13 straight years, Diversified International lagged its average rival by two percentage points in the first 11 months of 2006.
Manager Bill Bower says asset growth isn't responsible for the lackluster '06. Instead, he blames the sluggish performance on his decision to cut back -- prematurely, as it turned out -- on his holdings of emerging-markets stocks. "I got too defensive, too early, and it cost the fund a little bit," he says. Bower spreads his portfolio across 350 stocks, mostly of large companies in developed countries. He doesn't make big-picture judgments on countries or their sectors. "Instead of making industry or geographic bets, I want to own the best stock in a given industry in every part of the world," says Bower, who took over Diversified International in 2001 after a four-year stint at Fidelity International Growth & Income (now called Fidelity International Discovery).
Sign up for Kiplinger’s Free E-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.
Bower's sprawling portfolio includes Swiss pharmaceutical firms Novartis and Roche; the latter was the fund's biggest holding as of September 30. Other holdings included Japanese finance firm ORIX, Canadian oil and gas company EnCana, and Italian automobile manufacturer Fiat.
Over the past five years through December 22, Diversified International returned an annualized 17%, an average of two percentage points more than the MSCI EAFE index, the most popular foreign benchmark. Although Bower's record is solid, the fund's size and performance slowdown are worrisome. We don't advise current investors to add to positions, but it's okay for them to HOLD their shares.
FUND FACTS
Fidelity Diversified International (FDIVX)
Assets: $45.8 billion
Managers (year started): Bill Bower (2001)
Returns (vs. MSCI EAFE)*
Year to date: 21.1% (25.0%)
One year: 21.4% (24.4%)
Three years annualized: 20.1% (20.4%)
Five years annualized: 17.5% (15.4%)
Ten years annualized: 12.9% (7.2%)
Expense ratio: 1.06%
Portfolio turnover: 41%
Minimum investment: closed
Phone: 800-544-8544Web site: www.fidelity.com
*Returns to December 27
Fund Fact sources: Standard & Poor's, Morningstar
View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.
-
Take Charge of Retirement Spending With This Simple StrategyTo make sure you're in control of retirement spending, rather than the other way around, allocate funds to just three purposes: income, protection and legacy.
-
Here's How To Get Organized And Work For YourselfWhether you’re looking for a side gig or planning to start your own business, it has never been easier to strike out on your own. Here is our guide to navigating working for yourself.
-
The 5 Best Actively Managed Fidelity Funds to Buy Nowmutual funds In a stock picker's market, it's sometimes best to leave the driving to the pros. These Fidelity funds provide investors solid active management at low costs.
-
The 12 Best Bear Market ETFs to Buy NowETFs Investors who are fearful about the more uncertainty in the new year can find plenty of protection among these bear market ETFs.
-
Don't Give Up on the Eurozonemutual funds As Europe’s economy (and stock markets) wobble, Janus Henderson European Focus Fund (HFETX) keeps its footing with a focus on large Europe-based multinationals.
-
Best Bond Funds to BuyInvesting for Income The best bond funds provide investors with income and stability – and are worthy additions to any well-balanced portfolio.
-
Vanguard Global ESG Select Stock Profits from ESG Leadersmutual funds Vanguard Global ESG Select Stock (VEIGX) favors firms with high standards for their businesses.
-
Kip ETF 20: What's In, What's Out and WhyKip ETF 20 The broad market has taken a major hit so far in 2022, sparking some tactical changes to Kiplinger's lineup of the best low-cost ETFs.
-
ETFs Are Now Mainstream. Here's Why They're So Appealing.Investing for Income ETFs offer investors broad diversification to their portfolios and at low costs to boot.
-
Do You Have Gun Stocks in Your Funds?ESG Investors looking to make changes amid gun violence can easily divest from gun stocks ... though it's trickier if they own them through funds.
