The top five holdings in our first recommendation, and international fund, are: Alibaba Group Holding Ltd ADR (BABA, 2.88% of assets); Nestle SA (NESN, 2.67%); Tencent Holdings Ltd (00700, 2.58%); Roche Holding AG Dividend Right Cert. (ROG, 2.23%); and Taiwan Semiconductor Manufacturing Co Ltd (2330.TW, 2.16%). Our second recommendation is a sale of a previous idea.
Buy: Fidelity International Capital Appreciation Fund (FIVFX)
From Fidelity Monitor & Insight
Covid-19, and even more recently, political and economic uncertainty, have led to a sudden alteration to the international investment landscape. While we’ve changed only a handful of fund ratings this month, there can be elevated and difficult-to-quantify risks to venturing abroad with your money.
With that in mind, our models have only limited direct exposure to overseas stocks (most of it is the result of U.S. stock funds holding foreign domiciled companies).
In a perfect world we could steer investors to International Small Cap Opportunities (FSCOX). But as it’s closed to new investors, and as we’ve just downgraded its close cousin International Small Cap (FISMX) to OK to Sell from Hold, International Capital Appreciation remains our top choice. (It’s the only foreign stock fund we hold in our model portfolios.)
Jack Bowers, John M. Boyd and John Bonnanzio, Fidelity Monitor & Insight, fidelitymonitor.com, 800-397-3094, June 2020