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When I was reorganizing my portfolio at the beginning of the year, I was looking to maintain some international exposure. I wanted to have Chinese exposure as well as European exposure. For Chinese exposure, I ended up buying the FXI (which is the only holding which is treading water thus far in my IRA). For European exposure, I was thinking either FECAX (Fidelity's European fund) or IEV (the European iShares ETF). Since buying FECAX is free, I figured that was the smart move.

Six months later, what do I have to say? Bzzzt, another idiot move. Who knew there could be such a divergence between "actively" managed and "lazily" managed funds? Somebody smart is getting paid to manage FECAX, and he can't beat the lazy IEV fund (theoretically they should both perform about the same). +5% for the year vs. +15%? This doesn't even taken into account the $2 divvy IEV paid at the end of the year ... shucks.

So anyways, the lesson I've learned: Don't buy Fidelity mutual funds. See if there's an ETF which is supposed to do the same thing: even saving that 1% expense ratio on those mutual funds can go a looonnng way.

(Of course, there are cases when Fidelity's funds perform about the same as other ETFs, but those don't seem to do that much better... I mean, FICDX is a 5 star mutual fund! And it performs the same as an ETF! Come ON!)

Disclosure: I suck at stock picking, so you're probably better off doing the opposite of what I say. I owned positions in FECAX until three days ago, when I opened a position in IEV instead. I own positions in FXI as well. Jeez, isn't that obvious? Aren't disclosures fun?

Update: Steph points out that the the graphs are a bit deceptive because they don't account for the distributions. Very true. Here is an updated image which shows the 3 month gains for IEV vs. FECAX. The caveat here is that 3 months is really not a long enough time to show the gains made ... oh wells:

If I weren't so lazy, I'd do the actual math on the gains for one-year, including distributions (IEV had a small ~$2 distribution at the end of last year, similar to FECAX) ... but the 3 month is sufficient enough to justify to myself that the 1.09% expense ratio for FECAX isn't worth it (IEV has an expense ratio of 0.60% according to the prospectus).