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Is Fidelity International Capital Appreciation (FIVFX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that might be worth investigating is Fidelity International Capital Appreciation (FIVFX - Free Report) . FIVFX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FIVFX 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

Fidelity is based in Boston, MA, and is the manager of FIVFX. Fidelity International Capital Appreciation debuted in November of 1994. Since then, FIVFX has accumulated assets of about $2.21 billion, according to the most recently available information. The fund's current manager, Sammy Simnegar, has been in charge of the fund since January of 2008.

Performance

Of course, investors look for strong performance in funds. FIVFX has a 5-year annualized total return of 11.25% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.81%, 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. Over the past three years, FIVFX's standard deviation comes in at 10.86%, compared to the category average of 12.53%. Looking at the past 5 years, the fund's standard deviation is 10.79% compared to the category average of 11.95%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. FIVFX lost 63.63% in the most recent bear market and underperformed comparable funds by 5.25%. This could mean that the fund is a worse choice than comparable funds during a bear market.

Even still, the fund has a 5-year beta of 0.9, so investors should note that it is hypothetically less volatile than the market at large. 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. FIVFX has generated a negative alpha over the past five years of -2.33, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, FIVFX is a no load fund. It has an expense ratio of 1.11% compared to the category average of 1.29%. Looking at the fund from a cost perspective, FIVFX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.

Bottom Line

Overall, Fidelity International Capital Appreciation has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Non US - Equity funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare FIVFX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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