A couple of comments came in about the Fidelity Nordic Region Fund (FNORX). According to reader comments that fund has 50% in Sweden, 25% in Norway, 14% in Finland, 6% in Denmark and 1% in Switzerland. Another reader noted that the fund has a 0.61% correlation to the S&P 500 and a beta of 1.22. FWIW, PortfolioScience has the correlation at 0.489.
As you can see on the chart the fund has lagged EWD and EFA over the last twelve months but outperformed SPY.
A reader named Mojave left something interesting about credit default swaps which are essentially protection against bond defaults, kind of like put options. A few weeks ago there was an article in Barron's about using the ratio of the credit default index to VIX as a measure of complacency. I could not find the index on any of the normal charting sites but Mojave got them added to StockCharts.com. The North American ticker is $DJCDXNI and the ticker for the emerging market version is $DJCDXEM.
This is new to me, you can read more about it here, but I take the chart to imply fear about debt has gone up this month relative to the concern for equities. This after fear in the stock market went up a lot vs. bonds in October.Anyone with more on this feel free to weigh in.
2 comments:
FNORX net assets 350 mil., small by industry (and Fidelity) standards. Minimum initial investment $2500. Has redemption fee of 1.5% for sales within 90 days of purchase. Small dividendaid in Dec., as is any capital gains. Median market cap 13.8 bil. (midcap/largecap-ish), turnover about 75% (middling-ish). About 85 holdings. Almost 50% of assets in top-10 holdings. Largest sectors, financials and tech. No bonds, virtually no cash. Currency diversification: Swedish krona 52%, Norwegian krona 25%, Euro 14%, Danish 6%, U.S. Dollar 2%, Iceland krona 1%.
Belated WARNING on FNORX. As a conventional mutual fund, it pays out its capital gains once a year (this year, Dec. 8). Fidelity estimates the distribution to be 2.5%, about 60% of which will be long-term. In other words, for every $10,000 you have invested, about $250 will be distributed to you and taxable. To avoid "buying" this distribution, you might want to wait until after the pay out. Is it any wonder why ETF's, which generally have no or nominal distributions, have become so popular?
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