Is Fidelity Series International Small Cap (FSTSX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that may not be worth investigating is Fidelity Series International Small Cap (FSTSX). FSTSX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify FSTSX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.

History of Fund/Manager

FSTSX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Series International Small Cap made its debut in December of 2009, and since then, FSTSX has accumulated about $3.50 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 5.77%, 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 11.1%, which places it in the top third during this time-frame.

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. Over the past three years, FSTSX's standard deviation comes in at 11.43%, compared to the category average of 12.75%. The standard deviation of the fund over the past 5 years is 11.42% compared to the category average of 13.34%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.73, which means it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FSTSX has generated a negative alpha over the past five years of -1.89, demonstrating 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, FSTSX is a no load fund. It has an expense ratio of 0.01% compared to the category average of 1.20%. So, FSTSX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Fidelity Series International Small Cap ( FSTSX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

Want even more information about FSTSX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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