Fidelity Pacific Stock Index Fund: A Comprehensive Overview and Analysis

Introduction

The Fidelity Pacific Stock Index Fund (FPIFX) is a well-regarded mutual fund that tracks the performance of the MSCI Pacific Ex-Japan Index, a benchmark that represents the publicly traded shares of companies located in the Asia-Pacific region (excluding Japan). This fund offers investors exposure to a broad range of stocks across various industries and sectors within this dynamic and growing region.

Fund Overview

Investment Objective: The FPIFX seeks to provide investment results that closely correspond to the performance of the MSCI Pacific Ex-Japan Index.

Fund Manager: Fidelity Management & Research Company, LLC

Expense Ratio: 0.53%

Minimum Investment: $2,500

Historical Performance

Since its inception in 1995, the FPIFX has consistently outperformed the benchmark index. Over the past 10 years, the fund has delivered an average annual return of 8.4%, compared to 7.1% for the benchmark.

Year-to-Date Returns

Geographical Allocation

The FPIFX invests primarily in companies located in the following countries:

• Australia (37.3%)
• China (26.5%)
• South Korea (13.1%)
• Taiwan (10.4%)
• Hong Kong (9.1%)
• Others (3.6%)

This geographical diversification provides exposure to different economic environments and industries.

Sector Allocation

The fund's sector allocation reflects the composition of the MSCI Pacific Ex-Japan Index, with the following sectors representing the largest weights:

• Technology (31.5%)
• Financials (19.1%)
• Industrials (15.3%)
• Consumer Discretionary (13.2%)
• Communication Services (11.5%)

Holdings

The FPIFX invests in a large and diverse portfolio of stocks, with over 1,000 holdings. Some of its top holdings include:

• Tencent Holdings Limited (1.9%)
• Alibaba Group Holding Limited (1.8%)
• Taiwan Semiconductor Manufacturing Company Limited (1.7%)
• Samsung Electronics Co., Ltd. (1.6%)
• BHP Group Limited (1.4%)

Risk Considerations

Like any investment, the FPIFX carries certain risks, including:

• Market risk: The value of the fund's investments can fluctuate with market conditions.
• Foreign currency risk: The fund invests in companies in countries with different currencies, which can impact its performance.
• Currency volatility can result in gains or losses.
• Political risk: The fund's investments are subject to political and economic events in the Asia-Pacific region.

Comparison to Similar Funds

The FPIFX is often compared to other Pacific stock index funds, such as:

The FPIFX offers a competitive expense ratio and has consistently outperformed similar funds in terms of returns.

Who Should Invest in FPIFX?

The FPIFX is suitable for investors who:

• Seek exposure to the Asia-Pacific region
• Believe in the long-term growth potential of the region
• Have a moderate to high risk tolerance
• Are comfortable with currency risk

Advantages

• Diversification: Exposure to a wide range of stocks and sectors within the Asia-Pacific region
• Performance: Consistently outperforms the benchmark index
• Low expenses: Competitive expense ratio
• Experienced fund management: Managed by Fidelity Management & Research Company, LLC

Disadvantages

• Currency risk: Investments in foreign companies can be subject to currency fluctuations
• Concentration risk: Relatively high allocation to China
• Emerging markets risk: The fund invests in emerging markets, which can be more volatile than developed markets

Conclusion

The Fidelity Pacific Stock Index Fund (FPIFX) offers investors a cost-effective and diversified way to gain exposure to the growing Asia-Pacific region. The fund's strong historical performance, competitive expenses, and experienced management team make it a compelling choice for investors looking to add international exposure to their portfolios. However, investors should be aware of the currency risks and the fund's concentration in China before investing.