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The Fidelity Pacific Basin Fund Shows Superlative Metrics

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Apr. 7 2016, Published 4:29 p.m. ET

Fidelity Pacific Basin Fund overview

In this article, we’ll outline the performance of the Fidelity Pacific Basin Fund (FPBFX). As of February 2016, the fund was managing assets worth $640 million, and the latest available report shows that it was invested in 118 issues including stocks of companies like Japan Tobacco (JAPAY), SoftBank Group (SFTBY), Lenovo Group (LNVGY), Cognizant Technology Solutions (CTSH), and China Biologic Products (CBPO).

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Fidelity Pacific Basin Fund’s returns

From a purely net asset value return standpoint, FPBFX was among the top three funds in its peer group in the one-year period ending March 31, 2016, as well as in 1Q16. When we refer to the peer group, we mean the group of nine funds chosen for this review.

As a benchmark for all funds in this review, we’ll look at the metrics of the MSCI AC Asia Pacific Index. Although not all funds use this index as their benchmark, we’ll use this fund across this series for parity. For comparison, we’ll use two combinations of ETFs that provide exposure to stocks from the region. The first group consists of the Vanguard FTSE Pacific ETF (VPL) and the Vanguard FTSE Emerging Markets ETF (VWO), and the second group consists of the iShares Core MSCI Pacific ETF (IPAC) and the iShares MSCI Emerging Markets ETF (EEM).

Quantitative metrics of the Fidelity Pacific Basin Fund

For the one-year period ending in March 2016, the standard deviation for FPBFX stood at 16.3%. This was lower than both the MSCI AC Asia Pacific Index’s standard deviation of 17.8% and the arithmetic average (16.8%) of the standard deviation of all funds in this review.

The Sharpe ratio for FPBFX for the one-year period ending in March 2016 was zero. However, for 1Q16, FBPFX was one of three funds to post a positive ratio vis-à-vis the aforementioned benchmark.

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The information ratio shows the consistency of fund managers and measures their ability to generate excess returns over a benchmark. Considering the MSCI AC Asia Pacific Index as the benchmark, the information ratio of FPBFX was the best among its peer group for the one-year period ending in March 2016.

Investor takeaway

All quantitative metrics of FPBFX for 2015, including alpha, were the best among its peers. The same is true for the one-year period ending March 31, 2016. The first quarter of 2016 was not that good for the fund, but its metrics still place it among the top three funds. Investors who want to invest in the Asia-Pacific region should keep an eye on FPBFX as a potential investment. Those already invested can remain invested.

The next fund in this review is the Matthews Asia Dividend Fund Investor Class (MAPIX).

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