As the dollar weakens and the migration to international equities continues, investors might still be on the fence when it comes to getting exposure. In other instances, they’ve done the research and have the confidence to dive right in. In both cases, the actively managed Fidelity Fundamental Developed International ETF (FFDI) is worthy of consideration.
The movement into international equities has been a persistent theme this year despite ongoing market uncertainties. Macroeconomic factors like tariffs, geopolitical tensions, changing interest rate policy decisions in the United States, and other factors related to uncertainty might dissuade investors from getting exposure, but that hasn’t been the case.
Furthermore, the flight into international equities could be in the early stages of its rally. Potential further rate cuts by the U.S. Federal Reserve in 2026 could push even more investors towards international equities while the U.S. dollar weakens.
Given these factors, FFDI could be poised to benefit as it targets its focus on equities located in developed markets. This helps to mitigate the risk associated with adding emerging markets (EM) exposure, which carry a higher degree of volatility since their economies are less stable compared to developed markets. This is where the neophyte and veteran investor will benefit from FFDI exposure.
Furthermore, the fund’s active management adds another layer of protection.
The Active Edge of FFDI
To any investor looking to add international equities exposure to diversify their existing portfolios, active management is a must. International markets are nuanced and carry their own systematic as well as idiosyncratic risks. Actively managed funds give portfolio managers the autonomy to adjust the holdings of the fund as necessary to suit current market conditions. That said, investors need a fund that has a portfolio management team with the investment expertise to navigate these complex markets — FFDI has just that.
The fund utilizes fundamental research and analysis to handpick holdings from various countries for geographic and sector diversification. As noted on the fund’s product website, FFDI also uses a quantitative approach to construct its portfolio. The portfolio composition of FFDI reveals that it mainly allocates to companies with large capitalization sizes for added stability. Furthermore, the fund tilts towards growth to capture future upside in these large-cap companies.
Originally published on ETF Trends
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Fidelity Investments® is an independent company unaffiliated with VettaFi LLC (“VettaFi”). These articles do not form any kind of legal partnership, agency affiliation, or similar relationship between VettaFi and Fidelity Investments, nor is such a relationship created or implied by the articles herein. VettaFi LLC is the author and owner of these articles.
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