The top five sectors of this emerging markets fund are: Technology (29.77% of assets); Financial Services (18.52%), Consumer Cyclical (15.94%), Consumer Defensive (9.35%), and Industrials (7.40%).
Fidelity Emerging Markets (FEMKX)
from Moneyletter
Fund manager Sammy Simnegar has headed Fidelity Emerging Markets (FEMKX) since October 2012, and looks for growth stocks that are underappreciated by the market. He seeks industry-leading firms with dominant franchises that also sport strong balance sheets, rising earnings, high returns on capital, and strong managements. He also considers stocks that will benefit from “mega-trends” including rising spending from the middle class and certain technological trends.
When considering stocks in the MSCI Emerging Markets Index, if he favors a stock, he will weight it at half a percentage point more than the index in the portfolio. If he does not like it, he may not hold it at all. If he is not keen on some of the index’s larger holdings, he might relent and hold it at a half-weight because of the high risk of zero exposure. Simnegar also holds a stake in developed market (primarily the US and UK) firms that have substantial exposure to emerging markets.
This Fidelity fund also has the largest portion of assets in China, but at 18.6% of assets, it is significantly underweight the index’s 29.7%. It is overweight in India and Hong Kong (14.0% and 8.5% of assets, respectively) and underweight in Taiwan and South Korea. Information technology is the top sector in the fund (30.7% of assets), followed by financials and consumer discretionary. The top four holdings (Samsung, Tencent, Alibaba, Taiwan Semiconductor) all are overweight versus the index.
Walter Frank, Moneyletter, www.moneyletter.com, 800-890-9670, December 2017