SEC Company Response from FIDELITY INVESTMENT TRUST (CIK 0000744822) — Dec 20, 2004
FIDELITY INVESTMENT TRUST (CIK 0000744822)
Date: Dec. 20, 2004 · CIK: 0000744822 · Accession: 0000744822-04-000030
AI Filing Summary & Sentiment
File numbers found in text: 811-04008
Show Raw Text
CORRESP 1 main.htm COMMENTS RECEIVED ON DECEMBER 6, 2004 FROM CHRISTIAN SANDOE FIDELITY INVESTMENT TRUST (File Nos. 002-90649 and 811-04008) Fidelity Aggressive International Fund, Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Diversified International Fund, Fidelity Emerging Markets Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Europe Fund, Fidelity Global Balanced Fund, Fidelity International Discovery Fund, Fidelity International Small Cap Fund, Fidelity Japan Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, Fidelity Overseas Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Worldwide Fund POST-EFFECTIVE AMENDMENT NO. 89 1. All funds Performance Charts, Fee Tables, Financial Highlights, and Trustee Compensation Tables (prospectuses and statements of additional information (SAIs)) C: Please submit completed performance charts, fee tables, financial highlights, and the trustee compensation tables when the information becomes available. R: The requested information will be faxed to you when it becomes available. 2. Fidelity International Discovery, Fidelity China Region Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Latin America Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, Fidelity Global Balanced Fund, Fidelity Diversified International Fund, Fidelity Overseas Fund, Fidelity Worldwide Fund, and Fidelity Aggressive International Fund "Investment Summary" (prospectuses) "Principal Investment Risks" (Fidelity International Discovery, Fidelity Global Balanced Fund, Fidelity Diversified International Fund, Fidelity Overseas Fund, and Fidelity Worldwide Fund) "Foreign Exposure. Foreign markets, particularly emerging markets, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market." (Fidelity China Region Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Latin America Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, and Fidelity Aggressive International Fund) "Foreign Exposure. Foreign markets, particularly emerging markets, can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market. Emerging markets can be subject to greater social, economic, regulatory, and political uncertainties and can be extremely volatile." Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89 _____________________________________________________________________________________ C: The Staff would like emerging markets added as a strategy under the "Principal Investment Strategies" heading. R: Though the non-U.S. securities in which the funds invest may include foreign issuers in both developed and emerging markets, these funds currently do not have a principal investment strategy of investing in emerging markets. 3. Fidelity International Discovery Fund, Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital Appreciation Fund, Fidelity Japan Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund, Fidelity Diversified International Fund, Fidelity Aggressive International Fund, Fidelity Overseas Fund, and Fidelity Worldwide Fund "Investment Summary" (prospectuses) "Principal Investment Strategies" C: What is the fund's market capitalization strategy? R: The funds do not have a principal investment strategy of investing in securities of companies with a particular market capitalization. 4. Fidelity International Small Cap Fund "Investment Summary" (prospectuses) "Principal Investment Strategies" "Normally investing at least 80% of assets in securities of companies with small market capitalizations (which, for purposes of this fund, are those companies with market capitalizations of $5 billion or less)." C: The Staff would like an explanation for why $5 billion or less is a reasonable definition for companies with small market capitalizations. R: We believe that $5 billion or less is a reasonable definition of companies with small market capitalizations for our international small cap fund and that this definition is appropriately captured in our investment disclosure. As there is no universally accepted definition of "small cap" in the industry and definitions vary widely among the funds, we are comfortable that $5 billion is an appropriate threshold for use by this fund. The $5 billion threshold provides necessary flexibility in the event that the capitalization range of the companies in the index representing the underlying markets should change. For example, as of October 31, 1999, the largest company in the Tokyo Stock Exchange Second Section Stock Price Index (a market capitalization-weighted index that reflects the performance of the smaller, less established and newly listed companies of the Tokyo Stock Exchange) had a market capitalization of $14.1 billion. As of October 31, 2004, the largest company in the Tokyo Stock Exchange Second Section Stock Price Index had a market cap of only $1.9 billion. Wide variations in the capitalization levels of companies in the underlying markets necessitate the use of a broad definition of "small cap." Additionally, because there are several other international funds in the industry that define small cap using a cap threshold of $5 billion or higher, we believe that using a lower threshold would put us at a competitive disadvantage. Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89 _____________________________________________________________________________________ 5. Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Latin America Fund, and Fidelity Nordic Fund "Investment Summary" (prospectuses) "Principal Investment Strategies" (Fidelity Canada Fund) "Investing up to 35% of total assets in any industry that accounts for more than 20% of the Canadian market." (Fidelity China Region Fund) "Investing up to 35% of total assets in any industry that accounts for more than 20% of the Hong Kong, Taiwanese, and Chinese market." (Fidelity Latin America Fund) "Investing up to 35% of total assets in any industry that accounts for more than 20% of the Latin American market." (Fidelity Nordic Fund) "Investing up to 35% of total assets in any industry that accounts for more than 20% of the Nordic market." C: Explain how this policy is consistent with Section 8(b)(1) of the Investment Company Act of 1940 (1940 Act) as evidenced by the First Australia no-action letter. R: As you know, Fidelity had numerous discussions with the SEC Staff in 1999 before this form of fundamental concentration policy was implemented for any of the Fidelity funds. The Fidelity form of policy differs from the policy at issue in the First Australia no-action letter in one respect: the Fidelity funds do not name their benchmark index as part of the fundamental policy. As a result of conversations with the Staff, we are comfortable that the funds' concentration policies nevertheless are consistent with Section 8(b)(1) of the 1940 Act. We specifically discussed with the Staff that the Fidelity funds' benchmark indexes were not a part of their fundamental policies. We explained our concern about naming an index in part of a fundamental policy when at any time an index provider may discontinue the index, stop publishing it, or change the composition of the index. We were advised orally that inclusion of the index name in the fundamental policy was not required; instead it was only one factor in determining if Section 8(b) were satisfied. Currently, each fund uses a cap-weighted index designed by its provider to reflect the performance of the local equity market, and FMR believes the indexes are appropriate measures of the funds' local markets, based on index characteristics including the percentage of the total market capitalization covered, economic sector and industry representation, and the securities that make up each index. FMR could use different indexes or additional indexes to represent the local markets in the future, but only if those indexes were determined to be appropriate based on index characteristics. 6. Fidelity Canada Fund, Fidelity China Region Fund, Fidelity Emerging Markets Fund, Fidelity Japan Smaller Companies Fund, Fidelity Latin America Fund, Fidelity Nordic Fund, and Fidelity Southeast Asia Fund "Investment Summary" (prospectuses) "Principal Investment Risks" "As a result, changes in the market value of a single investment could cause greater fluctuations in share price than would occur in a more diversified fund." C: The Staff believes the word "more" should be removed because it suggests gradation. Because a fund is either diversified or non-diversified, as defined by the 1940 Act, a fund cannot be "more diversified." R: We believe that the disclosure above is stated in plain English pursuant to Rule 421(b)(3) under the Securities Act of 1933. We believe a typical shareholder - presumably unfamiliar with the 1940 Act's defined terms - would understand the term "more diversified" to mean a fund with greater diversity of issuers, regardless of its status as "diversified" or "non-diversified" under the 1940 Act, as even a non-diversified fund is "diversified" to some extent. We do not think the disclosure needs to be modified; however, we would be happy to discuss the Staff's concerns regarding the disclosure in greater detail. 7. Fidelity Japan Smaller Companies Fund "Investment Summary" (prospectus) "Principal Investment Strategies" "Normally investing at least 80% of assets in securities of Japanese issuers, and other investments that are tied economically to Japan, with smaller market capitalizations (which, for purposes of this fund, are those companies with market capitalizations similar to companies in the Russell/Nomura Mid-Small Cap Index or the Japanese Association of Securities Dealers Automated Quotations Index (JASDAQ))." C: The Staff would like us to add disclosure showing the market capitalization ranges for the Russell/Nomura Mid-Small Cap Index and the Japanese Association of Securities Dealers Automated Quotations Index (JASDAQ) as of a recent date. R: As the capitalization range of an index varies over time, we believe it is more appropriate to identify well-publicized indices by name rather than giving a snapshot of the capitalization range of an index as of a single date. Therefore, we propose not to modify the disclosure. 8. Fidelity Global Balanced Fund "Investment Summary" (prospectuses) "Principal Investment Strategies" "Investing in equity and debt securities, including lower-quality debt securities, issued anywhere in the world." C: Are the securities that the fund is invested in securities issued broadly throughout the world and not concentrated in a few countries or regions? R: As of the fund's October 31, 2004 fiscal year end it was invested in securities issued in over 10 different countries. 9. Fidelity Global Balanced Fund "Investment Summary" (prospectuses) "Principal Investment Risks" C: The Staff notes that there appears to be extra risk disclosure included for this fund. Fidelity Investment Trust (File Nos. 002-90649 and 811-04008), Post-Effective Amendment No. 89 _____________________________________________________________________________________ R: The additional disclosure is not necessary and will be removed. 10. Fidelity Overseas Fund "Investment Summary" (prospectuses) "Principal Investment Strategies" "Normally investing at least 80% of assets in non-U.S. securities." C: Would non-U.S. securities include Canada and Mexico? If so, how is this consistent with the term overseas? R: We note that the Name Test Rule does not specifically address "overseas" but we see that term as being akin to "foreign," connoting investments tied economically to countries outside the U.S. The SEC has stated that a fund may use any reasonable definition of the terms used in its name and should define the terms used in its name in discussing its investment objectives and strategies in the prospectus. See Name Test Rule Adopting Release Footnote 43. Accordingly, under the heading "Country or Geographic Region" in the "Investment Details" section of the prospectus we disclose that "FMR considers non-U.S. securities to include investments that are tied economically to a particular country or region outside the U.S." 11. All funds "Fee Table" (prospectuses) C: The "Shareholder fees" and "Annual operating expenses" information should be presented as one table with all footnotes following the table in its entirety. The Staff believes that inserting footnotes after the "Shareholder fees" information results in two tables instead of one. R: As we have previously discussed with the Staff, we believe that the information included under the subheadings "Shareholder fees" and "Annual operating expenses" in the "Fee Table" section of the prospectus is presented in a manner consistent with Item 3 of Form N-1A. The footnotes that support the information under each subheading are provided in the closest proximity possible to that information to facilitate shareholder understanding of the information presented. We note that General Instruction C.1(a) to Form N-1A states that a fund should use document design techniques that promote effective communication, and we believe this format most effectively communicates the information presented. 12. All funds "Fee Table" (prospectuses) C: The disclosure following the fee table concerning the reimbursement of certain expenses should be set forth as a footnote to the fee table rather than text pursuant to General Instruction C.3(b). R: The disclosure at issue follows the fee table and a footnote disclosing expense reimbursement arrangements, if any. The disclosure relates both to the total annual operating expenses in the fee table as well as to the footnote disclosing the expense reimbursement arrangements, if any, and the actual annual operating expenses that include the effect of the expense reimbursements. We believe that presenting disclosure in narrative form rather than in an additional footnote to the fee table, or as additional disclosure in the expense reimbursement arrangement footnote, if any, provides a clearer presentation for the shareholder. We believe that the disclosure complies with the requirements of Form N-1A and, accordingly, we propose not to modify it. 13. All funds "Fee Table" (prospectuses) "This example illustrates the effect of fees and expenses, but is not meant to suggest actual or expected fees and expenses or returns, all of which may vary." C: The Staff notes that it seems the fee table is based on last year's expenses or upcoming fees and expenses. Why doesn't the example illustrate actual or expected fees or expenses? R: As instructed in Item 3 of Form N-1A, the percentage of "Annual Fund Operating Expenses" is based on amounts incurred during a fund's most recent fiscal year. The example following the fee table is calculated using the exact fees disclosed in the fee table. The disclosure at issue is meant to clarify that because the fee table is calculated as of a fund's most recently completed fiscal year end, "actual" expenses for the current (ongoing) fiscal year will not be reflected until after the close of the fiscal year. In addition, the disclosure also clarifies that each investor's specific fees, expenses (and returns) typically will vary from what is illustrated by the example. 14. All funds "Investment Details"