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Fund Times

Fund Times: Manager Shuffle at Fidelity Foreign Funds

Plus, voter revolt at TIAA-CREF, new water ETF, and more.

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Just a few weeks after the departure of  Fidelity Europe's (FIEUX) talented young manager, there's been another shakeup at the fund giant's international lineup. Fidelity has announced that prominent manager Kevin McCarey is leaving the firm for personal reasons. His two nearly identical charges,  Fidelity Aggressive International (FIVFX) and  Fidelity Advisor International Capital Appreciation (FIATX), will now be captained by Rick Mace, a seasoned international hand. Mace will continue to run  Fidelity Overseas (FOSFX), which has nearly $5 billion in assets, as well as the smaller  Fidelity Worldwide (FWWFX) and  Fidelity Global Balanced (FGBLX) funds. But Fidelity has removed Mace from  Fidelity Advisor Overseas (FAERX) ($1 billion in assets), presumably to lighten his load. That fund will now be overseen by Graeme Rockett, who has contributed research to Fidelity's international lineup since 1998, but has never before managed a mutual fund available to U.S. investors.

Though McCarey has struggled lately, he departs with a strong long-term record going back to a lengthy stint at  Fidelity Europe Capital Appreciation (FECAX). McCarey employed a distinctive fast-trading investment style that emphasized smaller-cap stocks and ventured freely into emerging markets. Fidelity says that Mace will continue to run the funds aggressively. But his historical approach has been quite different. Mace tends to focus on large- and giant-cap stocks from developed markets, and his holding period tends to be twice as long as McCarey's. How Mace will fair using a new investment style is an open question. But we can't help but be skeptical. And Fidelity Overseas' middling long-term record doesn't inspire much enthusiasm. Nor do we think fundholders are well served by removing Mace from Fidelity Advisor Overseas. Graeme Rockett is, as yet, an unproven entity.

Lawrence Jones does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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