Portfolio Manager Insights

Why multinational companies look attractive to me

A weaker dollar, shifting trade policies, high interest rates and increased government spending in the eurozone present a favorable backdrop for U.S. multinational companies, says Fidelity’s John Sheehy.

By: John Sheehy
Updated: 1/5/2026
  • The recent emergence of several tailwinds, especially related to currency exchange, has boosted the growth prospects for U.S. multinationals, according to Fidelity Portfolio Manager John Sheehy, who has a much-improved outlook for overseas revenue among firms that operate across different sectors and countries.
  • “These companies have been dealing with a currency headwind for quite a while, but recently that has begun to change,” explains Sheehy, who manages Fidelity Advisor® Equity Dividend Income Fund. “I’ve recently added to the fund’s exposure to U.S multinationals, as I believe they also stand to benefit from shifting trade policies, elevated interest rates and higher fiscal spending by eurozone nations.”
  • Year to date through November, Sheehy says the U.S. dollar has weakened nearly 10% versus a basket of foreign currencies. If that trend continues, or the dollar stabilizes, he believes U.S. multinationals likely will benefit. [Editor’s note: If the U.S. dollar increases relative to foreign currencies, as has largely been the case since early 2008, any revenue earned overseas in a foreign currency has typically been worth less when converted back into U.S. dollars, and vice versa if the dollar weakens.]
  • Sheehy notes that the U.S. fiscal deficit has been soaring, and the nation’s debt-to-GDP ratio roughly doubled from 62% at the end of 2007 to about 119% as of Q2 2025. In May, Moody’s became the last of the three major U.S. credit-rating agencies to downgrade U.S. debt, following similar action by Standard & Poor’s and Fitch Ratings in 2011 and 2023, respectively.
  • Meanwhile, since the beginning of 2025, investors have faced quickly shifting trade policies amid questions about the resilience of the U.S. economy, still-high interest rates and weakening employment data, according to Sheehy.
  • Currency considerations aside, Sheehy says a burst of new spending in the eurozone could lift economic growth there and bolster the overseas revenue of U.S. multinationals. “In March, for example, Germany launched a large fiscal-stimulus package to jump-start its sluggish economy,” he notes.
  • In managing the fund since 2017, Sheehy seeks a yield from dividend and interest income that exceeds the composite dividend yield on securities in the S&P 500® index. He favors high-quality companies committed to increasing their payout ratio because he views it as a demonstration of good capital management, which he believes can support valuation expansion.
  • Sheehy says Procter & Gamble, 3M and Ball Corporation – all notable positions in the fund as of November 30 − derive a significant portion of their revenue from abroad and could benefit from this scenario for U.S. multinationals playing out further in the coming months.
  • “Market participants have been overly focused on geopolitics,” says Sheehy. “I believe this will pass, and more investors will return to a greater appreciation for business fundamentals, which I think could benefit these U.S. multinational companies,” he concludes.
 
FEATURED FUND

Fidelity Advisor Equity Dividend Income Fund (FIAVX)

Seeks a yield from dividend and interest income which exceeds the composite dividend yield on securities comprising the S&P 500 Index. The fund also will consider the potential for capital appreciation.

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