Invest in recovery

Jim Lowell

Feb. 1, 2011, 12:01 a.m. EST
Invest in recovery
Commentary: Buy emerging markets where you can


Finally, while everyone is saying the end of the small-cap run is upon us, I think seeking out emerging-growth stocks here that can grow to go global in five or more years makes sense (now at a slight discount to the most recent high water mark). I like the actively managed Fidelity Stock Selector Small Cap /quotes/comstock/10r!fdscx (FDSCX 19.49, +0.12, +0.62%) .

While this fund has been around since 1993, it has undergone not only numerous manager changes, but a few key management, objective and strategy changes, too. Currently, its team-managed crew looks for Russell 2000-like capitalization ranges domestically and globally for their best picks. With under 200 issues, it’s concentrated and, perhaps because of the various changes the fund has seen over the years, it’s off the grid of most investors. It’s a $1.4 billion fund with 20% in tech, 20% in financials, 14% in consumer discretionary and industrials, and 12% health care. As I have written here before, thanks to the emergence of the global consumer, I think health care is the emerging growth and emerging market play of the decade. That thread and theme runs through all the picks above.