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Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Pacific Rim - Equity fund? Well, Matthews China Small Companies Investor (MCSMX - Free Report) would not be a good potential starting point right now. MCSMX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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 $48.60 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 0.52%, 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 -16.46%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. MCSMX's standard deviation over the past three years is 30.41% compared to the category average of 21.9%. The standard deviation of the fund over the past 5 years is 27.85% compared to the category average of 20.96%. 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 0.44, 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. MCSMX's 5-year performance has produced a negative alpha of -3.87, which means 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 1.42% compared to the category average of 1.14%. MCSMX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
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.
Your research on the Pacific Rim - Equity segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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?
Having trouble finding a Pacific Rim - Equity fund? Well, Matthews China Small Companies Investor (MCSMX - Free Report) would not be a good potential starting point right now. MCSMX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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 $48.60 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 0.52%, 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 -16.46%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. MCSMX's standard deviation over the past three years is 30.41% compared to the category average of 21.9%. The standard deviation of the fund over the past 5 years is 27.85% compared to the category average of 20.96%. 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 0.44, 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. MCSMX's 5-year performance has produced a negative alpha of -3.87, which means 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 1.42% compared to the category average of 1.14%. MCSMX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
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.
Your research on the Pacific Rim - Equity segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.