Fidelity's international funds changing


A couple of weeks ago, Fidelity announced on its Web site a series of manager changes - not an unusual occurrence at that firm. For several reasons, though, the news deserves attention. The bottom line is that three of the firm's major international funds will undergo significant changes.

You might not have heard about these moves. After all, the press release appeared late on Thursday, April 12 - right at the start of the three-day Easter weekend. Of course, that was probably a coincidence. We would never imply that Fidelity would resort to a tactic long favored by media-savvy politicians: purposely releasing unpleasant news a time when media coverage would be muted and readers wouldn't be reading.

More important than the press release's timing is what it left out. It announced that Greg Fraser, manager of Fidelity Diversified International, was leaving the firm. But it didn't mention that the fund - which has racked up an excellent long-term record under Fraser's guidance - will become a different type of offering under new manager Bill Bower. Fraser, alone among Fidelity's international managers, is a quantitative manager, and thus Fidelity Diversified International has been the firm's only quantitatively run international fund. Under Bower, a traditional stock-picker like the rest of the Fidelity crew, that'll change.

Bower is a solid manager, though his record is not as strong as Fraser's. If I were a shareholder I wouldn't sell it now unless I had bought the fund specifically for its quantitative orientation. On the other hand, there's no reason for new buyers to jump into a fund that will be changing its stock-selection strategy.

Fidelity also resumed its questionable policy of making a manager's departure affect other funds and shareholders. By inserting Bower into Fraser's spot, the firm left a vacancy at Fidelity International Growth & Income. It moved Penelope Dobkin from Fidelity Worldwide into that opening.

That can't be seen as beneficial for shareholders of International Growth & Income: Bower had done a decent job with that fund. Dobkin's record has been less impressive, though not directly comparable because she's been running a global rather than a pure-foreign offering. Shareholders have reason to reassess whether they want to stick with International Growth & Income.

Fidelity Worldwide is least affected by the change. There, experienced hand Rick Mace takes over for Dobkin on the foreign side.

None of these funds is in trouble, by any stretch. Not only are the managers known quantities that avoid making risky bets, But each of the funds has a different character, and a different level and type of appeal, than it did before Easter.

And now you don't have to worry what you missed by leaving early that weekend.

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