Introduction to the series
In this five-part series, we’ll be providing essential facts that you need to know about five mutual funds that take you off the beaten path. These five mutual funds invest in the following regions:
- Australia and New Zealand (the Commonwealth Australia/New Zealand Fund)
- Canada (the Fidelity Canada Fund)
- the Nordic region (the Fidelity Nordic Fund)
- Korea (Matthews Korea Fund Investor Class)
- Africa and the Middle East (T. Rowe Price Africa & Middle East Fund)
You can consider these funds based on your view of the region if you’re interested in moving beyond the US, Europe, and Japan.
Commonwealth Australia/New Zealand Fund
The Commonwealth Australia/New Zealand Fund (CNZLX) generally invests at least 80% of its assets in securities that are tied economically to Australia and New Zealand. It can invest either in securities or in depository receipts.
Companies that are engaged in natural resources production, refining, and development are in the fund’s sharpest focus. Fund management considers natural resources to be the backbone of these two economies, and the investment adviser intends to invest for the long-term and seeks to identify securities in which it can invest with “an indefinite time horizon.”
CNZLX has been around for a long time, having been launched in November 1991. As of the end of October 2015, it was managing assets worth $17.4 million. As of the end of September, it had a total of 47 holdings in its portfolio, 77.3% of which were invested in companies from New Zealand.
Sectoral breakdown and performance of CNZLX
According to the latest available sectoral breakdown with us, industrials command the lion’s share of the fund’s portfolio, making up over 39% of its assets. Healthcare is a distant second, forming 15.6% of the portfolio, followed by financials, which form a little less than 14% of the fund.
South Port New Zealand (SPN) represents the largest holding of CNZLX, forming nearly one-fifth of the entire portfolio. New Zealand Refining Company and Ryman Healthcare round-off the top three securities. Over half of the fund’s assets are invested in its top ten holdings. Meanwhile, popular Australian companies like BHP Billiton Limited (BHP), James Hardie Industries (JHX), and Westpac Banking Corporation (WBK) do not form a part of the fund’s holdings.
For the YTD (year-to-date) period that ended on November 27, the fund was down by 10.2%, whereas for the one-year period ending on the same date, it has fallen by 11.8%.
Fees and minimums of CNZLX
In case you’re interested in investing in this fund, you’ll require a minimum initial investment of $200. There’s no minimum amount that you need to invest in order to add to your account. The fund does not levy a sales load, but it does charge a redemption fee of 2% of the amount redeemed if such a request is placed within 14 days of purchase. The turnover of the portfolio is low, but the expense ratio, at 3.08%, is quite high.
In the next part of this series, we’ll look at the Fidelity Canada Fund (FICDX).