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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 Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Matthews China Small Companies Investor (MCSMX - Free Report) . MCSMX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
MCSMX is a part of the Matthews Asia family of funds, a company based out of San Francisco, CA. The Matthews China Small Companies Investor made its debut in May of 2011 and MCSMX has managed to accumulate roughly $114.44 million in assets, as of the most recently available information. The fund's current manager, Winnie Chwang, has been in charge of the fund since August of 2020.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 0.1%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of -9.29%, 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. Compared to the category average of 22.92%, the standard deviation of MCSMX over the past three years is 28.36%. The fund's standard deviation over the past 5 years is 26.6% compared to the category average of 20.38%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.54, so investors should note that it is hypothetically 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. The fund has produced a negative alpha over the past 5 years of -3.73, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, MCSMX is a no load fund. It has an expense ratio of 1.41% compared to the category average of 1.27%. 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 this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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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 Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Matthews China Small Companies Investor (MCSMX - Free Report) . MCSMX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
MCSMX is a part of the Matthews Asia family of funds, a company based out of San Francisco, CA. The Matthews China Small Companies Investor made its debut in May of 2011 and MCSMX has managed to accumulate roughly $114.44 million in assets, as of the most recently available information. The fund's current manager, Winnie Chwang, has been in charge of the fund since August of 2020.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 0.1%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of -9.29%, 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. Compared to the category average of 22.92%, the standard deviation of MCSMX over the past three years is 28.36%. The fund's standard deviation over the past 5 years is 26.6% compared to the category average of 20.38%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.54, so investors should note that it is hypothetically 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. The fund has produced a negative alpha over the past 5 years of -3.73, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, MCSMX is a no load fund. It has an expense ratio of 1.41% compared to the category average of 1.27%. 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 this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.