Want to Know Why DISAX Has Done Well Year-to-Date?

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Sep. 7 2016, Updated 11:04 p.m. ET

Performance evaluation of the Dreyfus International Stock Fund

The Dreyfus International Stock Fund Class A (DISAX) has had an excellent 2016 as of August’s end, coming in second among the 12 funds chosen for this review. Meanwhile, for the one-year period, it’s the best-performing fund. 

We’ve graphed the fund’s performance against the iShares MSCI ACWI ex U.S. ETF (ACWX) and the iShares MSCI EAFE ETF (EFA). Let’s look at what’s contributed to its superb performance in 2016.

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Contributions to returns

The technology sector has been instrumental in the fund’s superlative performance in 2016. Taiwan Semiconductor Manufacturing (TSM) and Keyence have jointly led the sector, supported by ARM Holdings (ARMH) and SAP (SAP). All holdings from the sector have contributed positively to the fund. Industrials have been major positive contributors as well, with Komatsu and KONE being the star performers.

The consumer staples sector has contributed positively due to stocks such as Danone (DANOY) and L’Oreal (LRLCY). Though the consumer discretionary sector has also contributed positively to the fund, mainly due to Adidas (ADDYY), negative contributions by several stocks such as Honda Motor Company (HMC) and Denso have checked any further rises.

Financials and healthcare are the only two sectors that have contributed negatively to DISAX. While financials have been led down by DBS Group Holdings, healthcare has been led down by Novo Nordisk (NVO).

Investor takeaway

The technology and consumer staples sectors, along with the materials sector, have done well for DISAX year-to-date. Negative contributions from the financials and healthcare sectors haven’t amounted to much. Another appreciable aspect of the fund is its low portfolio turnover.

However, there are some issues to keep in mind. The consumer discretionary sector—DISAX’s most invested sector—has contributed positively, but it’s also had its share of negative contributors. If the global economy remains depressed, consumer spending could take a hit, hurting the fund. Existing investors should keep this in mind before deciding whether it’s time to book profits or keep their allocations unchanged.

Let’s now move on to the Fidelity Advisor International Discovery Fund Class A (FAIDX).

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