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Is Fidelity Overseas Fund (FOSFX) a Strong Mutual Fund Pick Right Now?

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On the lookout for a Non US - Equity fund? Starting with Fidelity Overseas Fund (FOSFX - Free Report) should not be a possibility at this time. FOSFX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FOSFX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.

History of Fund/Manager

FOSFX is a part of the Fidelity family of funds, a company based out of Boston, MA. Since Fidelity Overseas Fund made its debut in December of 1984, FOSFX has garnered more than $7.96 billion in assets. The fund's current manager, Vincent Montemaggiore, has been in charge of the fund since January of 2012.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.09%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.99%, which places it in the bottom 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. Compared to the category average of 16.34%, the standard deviation of FOSFX over the past three years is 17.21%. Over the past 5 years, the standard deviation of the fund is 14.57% compared to the category average of 13.69%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.85, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. FOSFX has generated a negative alpha over the past five years of -2.11, 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, FOSFX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.18%. From a cost perspective, FOSFX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity Overseas Fund ( FOSFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Want even more information about FOSFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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