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Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Pacific Rim - Equity category, but where should you start your research? Well, one fund that might be worth investigating is Matthews China Small Companies Investor (MCSMX - Free Report) . MCSMX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
MCSMX is one of many Pacific Rim - Equity funds to choose from. Pacific Rim - Equity mutual funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. Since Japan mutual funds are already popular in their own right, these Pacific funds will usually invest less than 10% of their assets in Japanese companies.
History of Fund/Manager
MCSMX finds itself in the Matthews Asia family, based out of San Francisco, CA. Since Matthews China Small Companies Investor made its debut in May of 2011, MCSMX has garnered more than $341.97 million in assets. Winnie Chwang is the fund's current manager and has held that role since August of 2020.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 27.32%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 23.56%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of MCSMX over the past three years is 22.52% compared to the category average of 17.91%. The standard deviation of the fund over the past 5 years is 19.22% compared to the category average of 15.16%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.54, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a positive alpha of 17.72, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MCSMX is a no load fund. It has an expense ratio of 1.43% compared to the category average of 1.38%. MCSMX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Matthews China Small Companies Investor ( MCSMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Pacific Rim - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Pacific Rim - Equity category, but where should you start your research? Well, one fund that might be worth investigating is Matthews China Small Companies Investor (MCSMX - Free Report) . MCSMX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
MCSMX is one of many Pacific Rim - Equity funds to choose from. Pacific Rim - Equity mutual funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. Since Japan mutual funds are already popular in their own right, these Pacific funds will usually invest less than 10% of their assets in Japanese companies.
History of Fund/Manager
MCSMX finds itself in the Matthews Asia family, based out of San Francisco, CA. Since Matthews China Small Companies Investor made its debut in May of 2011, MCSMX has garnered more than $341.97 million in assets. Winnie Chwang is the fund's current manager and has held that role since August of 2020.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 27.32%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 23.56%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of MCSMX over the past three years is 22.52% compared to the category average of 17.91%. The standard deviation of the fund over the past 5 years is 19.22% compared to the category average of 15.16%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.54, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a positive alpha of 17.72, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MCSMX is a no load fund. It has an expense ratio of 1.43% compared to the category average of 1.38%. MCSMX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Matthews China Small Companies Investor ( MCSMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Pacific Rim - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.