Is Fidelity Emerging Asia Fund (FSEAX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Pacific Rim - Equity fund could think about starting with Fidelity Emerging Asia Fund (FSEAX). FSEAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

FSEAX is classified in the Pacific Rim - Equity segment by Zacks, which is an area full of possibilities. Pacific Rim - Equity mutual funds see big investment opportunities in the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese firms, as Japan mutual funds are very popular.

History of Fund/Manager

FSEAX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Emerging Asia Fund made its debut in April of 1993, and since then, FSEAX has accumulated about $2.09 billion in assets, per the most up-to-date date available. The fund's current manager, Xiaoting Zhao, has been in charge of the fund since June of 2019.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 8.14%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 28.25%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 18.05%, the standard deviation of FSEAX over the past three years is 19.34%. The standard deviation of the fund over the past 5 years is 22.27% compared to the category average of 21.05%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.79, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.14. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, FSEAX is a no load fund. It has an expense ratio of 1.03% compared to the category average of 1.18%. Looking at the fund from a cost perspective, FSEAX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Fidelity Emerging Asia Fund ( FSEAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Fidelity Emerging Asia Fund ( FSEAX ) looks like a good potential choice for investors right now.

For additional information on the Pacific Rim - Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FSEAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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