Any investors hoping to find a Pacific Rim - Equity fund might consider looking past Hennessy Japan Small Cap Fund Investor (HJPSX Quick QuoteHJPSX - Free Report) . HJPSX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

HJPSX 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

Hennessy is responsible for HJPSX, and the company is based out of Novato, CA. The Hennessy Japan Small Cap Fund Investor made its debut in August of 2007 and HJPSX has managed to accumulate roughly $80.96 million in assets, as of the most recently available information. The fund is currently managed by Tadahiro Fujimura who has been in charge of the fund since August of 2007.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 11.84%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.08%, 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. HJPSX's standard deviation over the past three years is 12.23% compared to the category average of 11.05%. The fund's standard deviation over the past 5 years is 11.75% compared to the category average of 11.66%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In HJPSX's case, the fund lost 42.04% in the most recent bear market and outperformed its peer group by 15.81%. This means that the fund could possibly be a better choice than its peers during a down market environment.

Investors should note that the fund has a 5-year beta of 0.65, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 4.63. This means that 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, HJPSX is a no load fund. It has an expense ratio of 1.46% compared to the category average of 1.35%. HJPSX is actually more expensive than its peers when you consider factors like cost.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Hennessy Japan Small Cap Fund Investor ( HJPSX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.

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 HJPSX 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.