"I keep a wish list of companies I've long admired for their competitive position, and I've recently purchased some of them because their stock price finally dropped enough to meet my valuation criteria," says Jed Weiss, portfolio manager of Fidelity® International Growth Fund (FIGFX).
In March, Weiss says, he kept a close eye on businesses whose stocks had sold off aggressively along with the overall market, yet whose underlying fundamentals looked resilient or even poised to improve.
One such example is Sanofi (SNY), a French pharmaceutical company that saw its shares decline more than 20% off its February peak. Weiss purchased this stock in March, and subsequently added to the position, because he believed Sanofi's rare disease, oncology, and immunology franchises could do well even in a sluggish economy.
Meanwhile, he says, Sanofi's vaccine business could accelerate the company's growth if it's able to produce at scale an effective vaccine for COVID-19 sometime next year.
Additionally, Weiss initiated and grew positions in elevator manufacturer Kone (KNYJF) and futures exchange operator CME Group (CME), believing each had secular-growth opportunities and a low stock price. Lastly, he accumulated shares in industrial gases manufacturer Linde (LIN) and insurance broker Marsh & McLennan (MMC).
To help fund these purchases, Weiss says, he reduced exposure to aircraft engine manufacturers and sold a few positions in which he had lower conviction.
Fund turnover was significantly higher than usual in February and March, Weiss notes, but it's returning to its typical range of 15% to 30% annually, a trend he expects will continue if market volatility ebbs further.
"That being said, I will be opportunistic if markets sell off aggressively again," he says.
Fidelity® International Growth Fund held securities mentioned in this article on May 31, 2020. As of this date, these companies accounted for the following percentages of fund assets: Sanofi, 0.85%; Kone, 0.91%; CME, 0.42%; Linde, 2.66%; and Marsh & McLennan, 1.56%.
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