The Fidelity Advisor Latin America Fund
The Fidelity Advisor Latin America Fund – Class A (FLFAX) seeks long-term growth of capital by investing “at least 80% of assets in securities of Latin American issuers and other investments that are tied economically to Latin America.” The fund can invest up to 35% of its total assets in any industry that accounts for more than 20% of the Latin American market.
The fund’s management conducts fundamental analysis for choosing securities based on their financial condition and industry position. It then looks at market and economic conditions before finalizing its investments.
As of December 2015, the fund’s assets were invested across 87 holdings and it was managing assets worth $453.8 million. As of November, its equity holdings included CCU (CCU), Banco de Chile (BCH), Fibria Celulose (FBR), Sabesp (SBS), and Companhia Brasileira de Distribuição (CBD), which formed a total of 7.9% of the fund’s portfolio.
For this analysis, we’ll be considering holdings as of November 2015, as that is the latest available sectoral breakdown. The post-November holdings reflect valuation-driven changes to the portfolio, not the actual holdings.
Financials and consumer staples form a combined ~60% of the fund’s portfolio, with the former making up a third of the total assets. Consumer discretionary placed a distant third, making up a shade less than 10% of the fund’s portfolio.
The fund manager increased exposure to consumer discretionary stocks and utilities over the course of 2015. However, he’s been most aggressive with consumer staples stocks. Meanwhile, on a year-over-year basis, the composition of financial and healthcare sectors remained nearly unchanged. Exposure to the sectors was reduced at times, though it was propped up later.
To make space for increasing the share of the aforementioned sectors, the fund manager has reduced exposure to industrials, information technology, and telecom services. Did the portfolio moves help FLFAX in 2015? We’ll discuss that in the next article.