Fidelity web site listed a new fund FEMEX, Fidelity Emerging Europe, Middle East, Africa fund, yesterday. But the fund is closed to new investors.

I am interested in it. Has anybody been able to purchase it, has any idea whether it will be open to general public? Looks like a interesting alternative to TRAMX.
 

I am told by Fido it will open today the 15th.

Will it be a "good" alternative to TRAMX? -- perhaps but it also covers Eastern Europe. A lot will depend on how the portfolio is constructed. For instance I assuming that since Fido doesn't have a Russia fund this fund will invest there. If it then went by market cap weight and Fido is often a closet indexer the fund could hold a lot of Russia and South Africa.  I plan to look through a prospectus tonight. A lot will depend on who the manager is and what his experience is in those areas of the world.

Good luck.

T. Rowe Price blazed the trail with TRAMX and the sheep are following. Somehow Eastern Europe doesn't seem to fit with the Africa/Middle East mix, in my view. I tried a test trade through Fidelity BrokerageLink ($500 seems to be the initial minimum for retirement accounts). As for FEMEX manager Adam Kutas, here is his background as reported on Fidelity's website:

Funds Previously Managed
Fidelity Advisor Latin America Fund - Class A  
Fidelity Advisor Latin America Fund - Class B  
Fidelity Advisor Latin America Fund - Class C  
Fidelity Advisor Latin America Fund - Class I  
Fidelity Advisor Latin America Fund - Class T  
Fidelity Latin America Fund

Education
BA, University of Western Ontario, 1992

If you're wondering why trading Latin American stocks would qualify a money manager for African and Middle Eastern investments, you are not alone. TRAMX already has critical mass and an experienced manager.

Good question.  I had not heard of it, so I sent Fidelity an email asking them the same question.  Oops, now I see that DI already contacted them.  Oh well, I will see what they have to say about it.

erryl

 

After reading DI's post, I went Fidelity's web site and found that the red tag " This fund is closed to new investors" has disappeared this afternoon.

Fidelity opened a small cap fund FSOPX (Fidelity small cap opportunities) 03/22/2007. That fund has remained closed since inception. FSOPX didn't do well, hence hasn't received any mentioning here. I thought that FEMEX might be same as FSOPX, apparently it is not.

The manager Adam Kutas has some previous European and Latin America experiences. It's hard to know anything about his Mideast or African experiences. I don't mind a little bit from emerging European countries. But to be a niche play and to be different from a broad diversified emerging market funds, I thought that FEMEX shouldn't include too many regions that are already covered by FEMKX.
 

On Emerging Europe, I'm thinking that RSX - a pure Russia play - might be the best investing vehicle.  Why mix apples and oranges (Russia, Turkey, and Poland)?  These markets all have very different characteristics.

Throwing the Middle East and Africa into the mix doesn't make a bit of sense, IMHO. 

I'm of the "slice & dice" school of EM investing.  No global, diversified fund for this amateur investor!  I want local focus and prefer to control the allocations myself.  But that's just me.
 

Many investors can only buy Fidelity funds... for example, in 403b plans.  They should be interested in this fund.

Historically, new funds at Fidelity tend to do pretty well as managers build a portfolio from their best ideas, especially if the fund is a new one of its kind.  Kind of a back handed endorsement of focused funds.

There are few good investments in the middle east as most exchanges don't allow foreign ownership.  Israel is the major exception. There are few viable markets in Africa (South Africa being the major exception).  Eastern europe is a rapidly growing part of the world as it has been liberated from the shackles of communism and Russian domination.

I would rather invest in a fund like this than a pure Russian fund.  In fact, I have no interest in investing in Russia, but I do in this fund.  If you view it as a poor way to buy Russian, I have no problem with that.

erryl

 

Erryl,

Sorry, I didn't mean to express myself so strongly.

In fact, I own EUROX.  EUROX is diversified:  Russia, East Europe, and Turkey.  I was just thinking out loud there - kind of a self-criticism.  The trailing returns for Russia are tops and I think there is continued potential - with the risk that Russia fails to continue reforms or fails to control inflation.

There was nothing political in my post.  

I take your point that some investors are limited in their fund picks.

However, to throw the ME, Africa, and Eastern Europe into one fund - like TREMX does - seem odd to me. 

Norbert 

norbert, I wasn't mad... I'm just not into investing in Russia and I thought you were dismissing this fund in favor of a pure Russian fund. 

I am not sure, but this might be the best fund for Fidelity invstors to buy Russian, but even if it isn't... it still has value to some investors... like those that can only buy Fidelity funds.  That is all I was trying to say.

erryl

 

Whew,  I finally had time to shuffle some funds and get into femex on fri.  when I added it to my M* list of holdings, nothing shows up.  How long does this normally take?  I understand that new funds may take some time to ripple through and be recognized by the various quoting sites..

I was wondering if it will show up on the xray as europe or other..  I haven't seen a good description of how the region map is defined.  the fido site at least shows the countries on the map.

I wonder what currency they will use for the cash in the fund?

I've noticed a pop after a fund is announced, $10 start then up to 14 quickly..  or am I just imaging this on a few samples approx 10 funds that I watched on the opening.

I have been thinking about the potential opportunities and implications posed by FEMEX. I think Erryl is correct in saying that this fund does present a new option for Fidelity's clients by allowing them to target three regions: emerging Europe, Africa, and the Middle East. Judging from reports posted on Bloomberg.com, investor sentiment for Russian, Egyptian, and Persian Gulf stocks seems to have recently improved. Emerging Europe ex-Russia appears to be facing higher inflation and slower growth. African platinum miners have been on a roll as the price of the metal rises. But FEMEX investors don't know what's in its portfolio at this point (I think the SEC allows new funds a six-month blackout period for competitive purposes before they have to report their holdings). With a shop as big as Fidelity, the inflows generated by this fund could further stimulate stock prices (perhaps including common TRAMX holdings). One question for shareholders of diversified EM funds like FEMKX is the potential duplication of stocks (for example, how much exposure to OAO Gazprom do you really need?). For investors who target EM markets, pairing FEMEX and FLATX would cover the BR in BRIC. As for Russia, I acknowledge the valid concerns: 1) the bureaucrats have become the oligarchs who control the economy; and 2) Putin still runs the show and probably will for many years to come.

[quote user="norbertc"]

On Emerging Europe, I'm thinking that RSX - a pure Russia play - might be the best investing vehicle.  Why mix apples and oranges (Russia, Turkey, and Poland)?  These markets all have very different characteristics.

Throwing the Middle East and Africa into the mix doesn't make a bit of sense, IMHO. 

I'm of the "slice & dice" school of EM investing.  No global, diversified fund for this amateur investor!  I want local focus and prefer to control the allocations myself.  But that's just me.

[/quote]

I actually like diversified EM funds, though I don't own one anymore.  I've sort of carried the concept further and gone with foreign/global funds that range freely into EMs.   As a result, I have lost track of what my EM exposure actually is....but then, trying to track that may be pointless.  After all, Singapore, Israel and Brazil are more "developed" than "emerging".   It's too gray and fuzzy to categorize.  MAPTX remains my only purely regional play.

The problem with slide-and-dice viz. PRLAX, PRASX, TREMX, TRAMX etc. is that (a) I can't judge how to allocate by region better than the manager of a diversified fund (eg PRMSX), and (b) regional funds' ERs tend to be higher.

On the other hand, I really don't understand BRIC funds.   What do these four countries have in common? 

Chang,  just google bric summit 2008.  it just ended last week I believe.

Russia, resources, oil, stable inflation, growth in incomes, presumed to perform well

china, great story on how they managed to jump to #3 in world economy in less than 10 yrs.  great model for russia to follow, great infrastructure gains

India, largest democratic population, infrastructure issues.

brazil, second to US in food supply

So, my opinion, you have the North Am group, Euro group, and 4 emerging countries BRIC that want to be considered as developed countries.  They are forming trade agreements together. 

I agree with you,  what are emerging market these days?  When I asked a fisher rep, anything outside US and euro was EM.

I think I got started with the "slice & dice" approach via Matthews Asia Funds.  Now I really wouldn't want to be invested any other way in Asia.  That place is like a minefield and I want someone who's there on the ground.  Plus they have those well-designed conservative vehicles like MAPIX and MACSX.  Your MAPTX is great too and MINDX is fine for India - it holds a mixture of LC and MCs.

On Russia and Brazil it's tougher to argue that indexing won't work. Maybe because those markets have never gone down (at least not in recent memory). But I have PRLAX and EUROX, not wanting to duplicate Asia exposure with a diversified fund.  RSX would probably be fine for Russia.

The other thing is that I consciously target a balance between commodity-exporting and commodity-importing countries.   And I don't want anything indexey that overweights companies like Gasprom.

It's true that the line between EMs and DMs is getting blurred; plus Global funds like Heebner's invest absolutely anywhere.  And many companies also do profit not just where they are incorporated: the shipbuilders, engineering companies, etc.

 

While no portfolio is yet available for this new fund, its benchmark index is available. According to the Fidelity website:

"MSCI EM Europe, Middle East and Africa Index

The MSCI EM (Emerging Markets) Europe, Middle East and Africa Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the emerging market countries of Europe, the Middle East and Africa. The MSCI EM EMEA Index currently consists of the following 10 emerging market country indices: Czech Republic, Egypt, Hungary, Israel, Jordan, Morocco, Poland, Russia, South Africa and Turkey." Perhaps of most interest are the 10 countries that compose the Index and also countries which aren't included.

Interesting,  from another post on this topic.  It looks like FEMEX has been around for a while..  Wonder how Fido really works..

 Do they test market funds in other countries?  Then offer in US?

http://socialize.morningstar.com/NewSocialize/forums/post/2520483.aspx

I've been trying, without success,  to find an ETF that ivests in the same countries as FEMEX.  Anyone aware of such an animal??

Fido's FEMEX posted a loss of -1.68% today (June 2), while T. Rowe's TRAMX posted a gain of +.50%. My guess is that FEMEX's positions in emerging Europe pulled that fund down today (Market Vectors Russia/RSX lost -1.16%, yet T. Rowe's TREMX posted a fractional gain of +.05%). As for TRAMX, several Persian Gulf stock exchanges trade on Sunday and yesterday's rising stocks like Aldar Properties (3.5% position) may have contributed to today's gain.

I would agree they are different,  FEMEX just opened, I would guess that the manager has not fully invested all the funds.  They probably have a pile of cash waiting to make good buys.  So they will be very sensitive to the little stock they own.

FEMEX dropped -1.93% today (June 4), while TRAMX gained .50%. Fido's manager may have deployed some of his initial cash in volatile, energy-sensitive Russian stocks.