International Mutual Funds: Fidelity Japan Smaller Companies (FJSCX)
For investors interested in the recovery in Japanese stocks, Fidelity Japan Smaller Companies (FJSCX) is a compelling fund that had a great year in 2013 — up a robust 52%, or nearly twice the iShares MSCI Japan ETF (EWJ).
This $630 million fund is a risky option, but under the guidance of lead manager Nicholas Price, FJSCX is posting a very solid performance — up an annualized 17% over the past five years and ranked in the top 1% of all mutual funds in this Morningstar category.
Listed as a midcap fund, Price holds 88 stocks in the portfolio and trades rather often — with annual turnover of 91%. The portfolio recently was positioned with a 28% stake in consumer discretionary names and 26% in financials. Current top holdings include Orix (IX), Tokyo Tatemono (TYTMF), Pigeon Corp. (PGENY), Rakuten (RKUNF).
A reasonable expense ratio of 1.01% makes FJSCX an appealing way to claim a slice of the Japanese recovery story.