The Fidelity Advisor Europe Fund Class A (FHJUX) was down 0.7% in November 2015 from a month ago. In the three- and six-month periods ended November 30, the fund rose 0.7% and fell 6.7%, respectively.
In the trailing-one-year period, the fund has returned 1.4%, while from November’s end until December 22, it has fallen 3.0%. In the YTD (year-to-date) period, the one we’ll be analyzing, the fund is up by 4.5%.
The fund has been an average performer for most periods under review. For the YTD period, it stands fourth among the ten funds under our review.
Let’s look at what has contributed to the fund’s performance.
Portfolio composition and contribution to returns
FHJUX has the longest track record among the ten funds in this review. It has been in existence since October 1986. According to its latest geographical disclosure, companies from the United Kingdom, Sweden, and France are its top three invested geographies, in that order. France overtook Germany a month ago.
Since the latest complete portfolio of the fund available with us is as of October 2015, we will consider that as our base. For November, we will consider valuation changes for our analysis. All portfolio percentages mentioned from here on refer to their weights as per changes in valuation from October to November.
Healthcare, which occupies one-fifth of the fund’s portfolio, emerged as the top sectoral contributor to FHJUX’s returns for the YTD period ended November 2015. Fresenius Medical Care (FMS) led the positive contributors from the sector. Other gainers from the sector included Ipsen (IPSEY) and the ADR (American depositary receipt) of Teva Pharmaceutical Industries (TEVA). On the other hand, Sanofi (SNY) was the top negative contributor.
The consumer discretionary sector followed healthcare in terms of positive contribution to the fund’s returns. Finnish sports company Amer Sports and Germany’s Adidas (ADDYY) were the biggest contributors from the sector.
Industrials, the third-biggest component of the fund, emerged as a substantial drag on its returns. France’s Zodiac Aerospace and Rexel and the United Kingdom’s Rolls Royce Holdings (RYCEY) were primarily responsible for the negative contribution by industrials.
Reasons for performance
Stock picks in the industrials sector hurt the fund in good measure. However, another important reason the fund did not do better was that financials put up a lukewarm performance. If a sector that occupies over 30% of the fund’s assets has an ordinary showing, it hurts the fund’s performance.
Standard Chartered took a toll on the sector and nearly nullified positive contributions from ING Groep (ING), Erste Group Bank, and KBC Group, among others.
In the next article, we’ll take a look at the Putnam Europe Equity Fund Class A (PEUGX).