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Japan – Equity fund seekers should not consider taking a look at Fidelity Japan Fund (FJPNX) at this time. FJPNX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
FJPNX is part of the Japan – Equity section, which is a segment that boasts many possible selections. Japan – Equity mutual funds mostly invest in Japan-based companies, which is one of the world’s richest and most diversified economies. Japan’s focus on exports allows them to be somewhat exposed to global economic trends, but investors should note that the country’s lack of natural resources can also have an impact.
History of Fund/Manager
Fidelity is based in Boston, MA, and is the manager of FJPNX. The Fidelity Japan Fund made its debut in September of 1992 and FJPNX has managed to accumulate roughly $1.93 million in assets, as of the most recently available information. The fund’s current manager, Kirk Neureiter, has been in charge of the fund since March of 2014.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 8.4%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.05%, which places it in the bottom 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. FJPNX’s standard deviation over the past three years is 18.31% compared to the category average of 14.7%. Over the past 5 years, the standard deviation of the fund is 17.45% compared to the category average of 15.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.8, so investors should note that 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. FJPNX’s 5-year performance has produced a negative alpha of -3.88, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FJPNX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.96%. FJPNX is actually cheaper than its peers when you consider factors like cost.
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 considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, average downside risk, and lower fees, Fidelity Japan Fund ( FJPNX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Japan – Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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