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Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
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Pacific Rim - Equity fund seekers should not consider taking a look at Matthews China Small Companies Investor (MCSMX - Free Report) at this time. MCSMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
MCSMX is classified in the Pacific Rim - Equity segment by Zacks, which is an area full of possibilities. Pacific Rim - Equity mutual funds see big investment opportunities in the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese firms, as Japan mutual funds are very popular.
History of Fund/Manager
Matthews Asia is responsible for MCSMX, and the company is based out of San Francisco, CA. Matthews China Small Companies Investor made its debut in May of 2011, and since then, MCSMX has accumulated about $42.76 million in assets, per the most up-to-date date available. The fund's current manager, Tiffany Hsiao, has been in charge of the fund since July of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 5.71%, and is 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 9.45%, 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. Over the past three years, MCSMX's standard deviation comes in at 18.71%, compared to the category average of 13.84%. The standard deviation of the fund over the past 5 years is 19.71% compared to the category average of 13.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment.
Nevertheless, with a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -4.14, managers in this portfolio find it difficult to pick 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 1.50% compared to the category average of 1.41%. Looking at the fund from a cost perspective, MCSMX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Matthews China Small Companies Investor ( MCSMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on the Pacific Rim - Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into MCSMX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
Pacific Rim - Equity fund seekers should not consider taking a look at Matthews China Small Companies Investor (MCSMX - Free Report) at this time. MCSMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
MCSMX is classified in the Pacific Rim - Equity segment by Zacks, which is an area full of possibilities. Pacific Rim - Equity mutual funds see big investment opportunities in the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese firms, as Japan mutual funds are very popular.
History of Fund/Manager
Matthews Asia is responsible for MCSMX, and the company is based out of San Francisco, CA. Matthews China Small Companies Investor made its debut in May of 2011, and since then, MCSMX has accumulated about $42.76 million in assets, per the most up-to-date date available. The fund's current manager, Tiffany Hsiao, has been in charge of the fund since July of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 5.71%, and is 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 9.45%, 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. Over the past three years, MCSMX's standard deviation comes in at 18.71%, compared to the category average of 13.84%. The standard deviation of the fund over the past 5 years is 19.71% compared to the category average of 13.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment.
Nevertheless, with a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -4.14, managers in this portfolio find it difficult to pick 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 1.50% compared to the category average of 1.41%. Looking at the fund from a cost perspective, MCSMX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Matthews China Small Companies Investor ( MCSMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on the Pacific Rim - Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into MCSMX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.