The Fidelity Advisor International Discovery Fund’s composition
The Fidelity Advisor International Discovery Fund – Class A (FAIDX) was launched in December 1986. At the end of January 2016, the fund was managing assets worth $10.0 billion and these were spread across 218 holdings as of the end of December 2015.
Financials formed 24.2% of the fund’s assets and made up the single largest sector of investment as of the end of December. The consumer discretionary and healthcare sectors followed and formed a combined 30% of the portfolio. The fund was not invested in the utility sector. 60% of the fund’s assets were invested in European equities, followed by 17.1% in Japan.
France’s energy giant Total (TOT) is the fund’s largest holding, forming 1.9% of the fund’s December 2015 assets. Pharma company Novartis (NVS) is the largest holding from Switzerland, while Unilever (UN) is the largest holding from the Netherlands. Anheuser-Busch InBev (BUD) is the largest holding among stocks from Belgium, while Japan’s KDDI and Mitsubishi UFJ Financial Group (MTU) also form part of the top ten holdings.
Returns of the Fidelity Advisor International Discovery Fund
The Class A shares of the Fidelity Advisor International Discovery Fund (FAIDX) posted negative returns in the one-year period ended January 2016. From a purely NAV (net asset value) return standpoint, the FAIDX stood third in that period. For 2015, the fund’s returns were positive and helped it secure the second position among the nine funds in this review.
Standard deviation is used for assessing risks associated with an investment. Simply put, it measures the deviation of a series of returns from the average. A wide deviation reflects a high fluctuation in the returns, resulting in a higher risk, and vice versa.
For the one-year period ended January 2016, the standard deviation for the FAIDX stood at 13.9%. Meanwhile, the arithmetic average of the standard deviation of all funds in this review was 14.5%. Excluding the FAIDX, the average was 14.5%. Therefore, the returns of the fund were less volatile than the average return of the peer group.
For realized returns, the Sharpe ratio assesses the average return on a risk-free asset or security over total risk as represented by a standard deviation. The higher the Sharpe ratio, the better the risk-adjusted performance.
The Sharpe ratio for the FAIDX for the one-year period ended January 2016 stood at -0.16, the second best among the funds in this review. For 2015, this ratio was 0.52, which is the best among the group for the year.
A note for investors
January 2016 was the hardest on the FAIDX among all the funds in this review. This dragged on the strong performance posted in 2015, and the fund placed third for the one-year period up until January. However, even after that, the fund’s returns have remained less volatile than the peer group’s average return and its risk-adjusted performance remains good. This fund could be considered as part of your shortlist for investing in international mutual funds. Let’s move to the next fund in this review: the Fidelity Diversified International Fund (FDIVX).