The recent emergence of several tailwinds, especially related to currency exchange, has boosted the growth prospects for U.S. multinationals, according to Fidelity Portfolio Manager John Sheehy, who has a much-improved outlook for overseas revenue among firms that operate across different sectors and countries.
“These companies have been dealing with a currency headwind for quite a while, but recently that has begun to change,” explains Sheehy, who manages Fidelity® Equity Dividend Income Fund (FEQTX). “I’ve recently added to the fund’s exposure to U.S multinationals, as I believe they also stand to benefit from shifting trade policies, elevated interest rates and higher fiscal spending by eurozone nations.”
Year to date through November, Sheehy says the U.S. dollar has weakened nearly 10% versus a basket of foreign currencies. If that trend continues, or the dollar stabilizes, he believes U.S. multinationals likely will benefit. [Editor’s note: If the U.S. dollar increases relative to foreign currencies, as has largely been the case since early 2008, any revenue earned overseas in a foreign currency has typically been worth less when converted back into U.S. dollars, and vice versa if the dollar weakens.]
Sheehy notes that the U.S. fiscal deficit has been soaring, and the nation’s debt-to-GDP ratio roughly doubled from 62% at the end of 2007 to about 119% as of Q2 2025. In May, Moody’s became the last of the three major U.S. credit-rating agencies to downgrade U.S. debt, following similar action by Standard & Poor’s and Fitch Ratings in 2011 and 2023, respectively.
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Meanwhile, since the beginning of 2025, investors have faced quickly shifting trade policies amid questions about the resilience of the U.S. economy, still-high interest rates and weakening employment data, according to Sheehy.
Currency considerations aside, Sheehy says a burst of new spending in the eurozone could lift economic growth there and bolster the overseas revenue of U.S. multinationals. “In March, for example, Germany launched a large fiscal-stimulus package to jumpstart its sluggish economy,” he notes.
In managing the fund since 2017, Sheehy seeks a yield from dividend and interest income that exceeds the composite dividend yield on securities in the S&P 500® index. He favors high-quality companies committed to increasing their payout ratio because he views it as a demonstration of good capital management, which he believes can support valuation expansion.
Sheehy says Procter & Gamble (PG), 3M (MMM) and Ball Corporation (BALL) – all notable positions in the fund as of November 30 − derive a significant portion of their revenue from abroad and could benefit from this scenario for U.S. multinationals playing out further in the coming months.
“Market participants have been overly focused on geopolitics,” says Sheehy. “I believe this will pass, and more investors will return to a greater appreciation for business fundamentals, which I think could benefit these U.S. multinational companies,” he concludes.
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John Sheehy is a portfolio manager in the Equity division at Fidelity Investments.
In this role, Mr. Sheehy manages the Fidelity Advisor Equity Income Fund and Fidelity Equity Dividend Income Fund. Additionally, he co-manages the information technology and telecommunication services sleeves of Fidelity Stock Selector Large Cap Value Fund, Fidelity Series Stock Selector Large Cap Value Fund, and Fidelity Advisor Series Stock Selector Large Cap Value Fund.
Prior to assuming his current responsibilities, Mr. Sheehy co-managed Fidelity Select Banking and Select Defense and Aerospace Portfolios. He also covered various sectors as an analyst at Fidelity, including banking, aerospace and defense, and paper and packaging.
Before joining Fidelity in 2007, Mr. Sheehy worked as an audit manager at Deloitte. He has been in the financial industry since 2007.
Mr. Sheehy earned his bachelor of arts degree in economics and accounting from the College of the Holy Cross and his master of business administration degree in finance from New York University’s Stern School of Business. He is also a Certified Public Accountant (CPA).