Back to top

Image: Bigstock

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

Read MoreHide Full Article

Looking for a Non US - Equity fund? You may want to consider Fidelity Overseas Fund (FOSFX - Free Report) as a possible option. FOSFX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes FOSFX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.

History of Fund/Manager

Fidelity is responsible for FOSFX, and the company is based out of Boston, MA. Since Fidelity Overseas Fund made its debut in December of 1984, FOSFX has garnered more than $5.88 billion in assets. The fund's current manager, Vincent Montemaggiore, has been in charge of the fund since January of 2012.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.6%, and is 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 15.3%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. FOSFX's standard deviation over the past three years is 13% compared to the category average of 12.93%. Looking at the past 5 years, the fund's standard deviation is 16.75% compared to the category average of 14.93%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.96, 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's 5-year performance has produced a negative alpha of -6.29, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FOSFX is a no load fund and it has an expense ratio of 0.67%.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

With a rank of 'hold' we aren't getting a good signal one way or another on FOSFX. That is why it might be a good idea to consider other items, such as the fund's expense ratio of .67%, and how this compares to other potential options being considered for investment. If cheaper, it might make a decent choice, but a more expensive fund might be worth avoiding. Just make sure to pay attention to its rank in case it shifts in the near future.

Your research on the Non US - Equity segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Fidelity Overseas (FOSFX) - free report >>

Published in