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Is Fidelity International Small Cap Opportunities (FSCOX) a Strong Mutual Fund Pick Right Now?

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On the lookout for a Non US - Equity fund? Starting with Fidelity International Small Cap Opportunities (FSCOX - Free Report) is one possibility. FSCOX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FSCOX 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 FSCOX. Since Fidelity International Small Cap Opportunities made its debut in August of 2005, FSCOX has garnered more than $879.78 million in assets. Jed Weiss is the fund's current manager and has held that role since December of 2008.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. FSCOX has a 5-year annualized total return of 3.71% 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 2.78%, 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. FSCOX's standard deviation over the past three years is 14.79% compared to the category average of 10.68%. The standard deviation of the fund over the past 5 years is 13.25% compared to the category average of 10.67%. This makes the fund more 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. FSCOX lost 70.16% in the most recent bear market and underperformed its peer group by 11%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. FSCOX has a 5-year beta of 0.81, which means it is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -1.71. This means 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, FSCOX is a no load fund. It has an expense ratio of 1.19% compared to the category average of 1.22%. FSCOX is actually cheaper than its peers when you consider factors like cost.

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

Bottom Line

Overall, Fidelity International Small Cap Opportunities ( FSCOX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity International Small Cap Opportunities ( FSCOX ) looks like a good potential choice for investors right now.

For additional information on the Non US - Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSCOX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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