Is Fidelity Diversified International Fund (FDIVX) a strong mutual fund pick right now?

If you are looking for non-US equity funds, consider the Fidelity Diversified International Fund (FDIVX) as a possibility. FDIVX has a Zacks Mutual Fund Rank of #2 (Buy), which is based on several forecasting factors such as size, cost, and past performance.

Objective

FDIVX is rated in the Non US – Equity area by Zacks, and this segment is full of potential. Non-U.S. equity funds focus their investments in companies outside the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. The majority of these funds will be distributed across emerging and developed markets, and can often extend to capitalization levels as well.

History of the Fund/Manager

Fidelity is headquartered in Boston, MA and is the manager of FDIVX. The Fidelity Diversified International Fund was launched in December 1991. Since then, FDIVX has accumulated assets of about $1.34 billion, according to the most recently available information. The fund is currently managed by William Bower, who has been responsible for the fund since April 2001.

Performance

Investors naturally look for funds with strong performance. This fund in particular has delivered an annualized total return of 9.02% over 5 years and is in the top third among its category peers. Investors who prefer to analyze shorter time frames should look at its 0.79% annualized total return over 3 years, which puts it in the middle third over this period.

It is important to note that returning the product may not reflect all your expenses. Any unreflected fees would reduce returns. Total returns do not reflect the sales commission (%) of the fund. If sales charges were included, total returns would have been lower.

When looking at a fund’s performance, it is also important to look at the standard deviation of returns. The smaller the standard deviation, the less volatility the fund experiences. FDIVX’s standard deviation over the past three years is 18.27% compared to the category average of 17.27%. Over the past 5 years, the fund’s standard deviation is 17.84% compared to the category average of 17.25%. This makes the fund more volatile than its peers over the last half decade.

Risk Factors

The fund has a 5-year beta of 0.91, so investors should be aware that it is hypothetically less volatile than the general market. Another factor to consider is alpha, as it reflects the performance of a portfolio on a risk-adjusted basis relative to a benchmark index – in this case, the S&P 500. Over the last 5 years, the fund has had a negative alpha of – 4.86. This means that managers of this portfolio have difficulty choosing securities that generate better returns than the benchmark index.

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Expenses

Costs are increasingly important for mutual fund investing, especially as competition increases in this market. And all things being equal, a lower-cost product will outperform its identical counterpart, so taking a closer look at these metrics is critical for investors. In terms of fees, FDIVX is a no-load fund. It has an expense ratio of 0.61% compared to the category average of 0.95%. FDIVX is actually cheaper than its competitors when you consider factors like cost.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Fees charged by investment advisors were not taken into account. Returns would be lower if these were included.

Conclusion

Overall, Fidelity Diversified International Fund (FDIVX) has a high Zacks Mutual Fund Rank, and together with its comparatively strong performance, average downside risk, and lower fees, Fidelity Diversified International Fund (FDIVX) looks like a good choice potential for investors, right now.

For additional information about this product, or to compare it to other non-U.S. mutual funds – Equities, visit www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, visit Zacks.com for our complete suite of tools to help you investigate all your stocks and funds in one place.

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