Any investors hoping to find a Pacific Rim - Equity fund could think about starting with Matthews China Small Companies Investor (MCSMX Quick QuoteMCSMX - Free Report) . MCSMX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Pacific Rim - Equity funds is an area filled with options, such as MCSMX. Pacific Rim - Equity mutual funds usually invest in companies with a big presence in the export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese companies since Japan mutual funds are incredibly popular.

History of Fund/Manager

Matthews Asia is based in San Francisco, CA, and is the manager of MCSMX. Since Matthews China Small Companies Investor made its debut in May of 2011, MCSMX has garnered more than $49.04 million in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. MCSMX has a 5-year annualized total return of -4.62%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.12%, 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. Compared to the category average of 16.97%, the standard deviation of MCSMX over the past three years is 23.83%. Over the past 5 years, the standard deviation of the fund is 26.24% compared to the category average of 19.01%. 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 0.5, which means 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. Over the past 5 years, the fund has a negative alpha of -10.19. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, MCSMX is a no load fund and it has an expense ratio of 1.43%.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

With a rank of 'hold' we aren't getting a good signal one way or another on MCSMX. That is why it might be a good idea to consider other items, such as the fund's expense ratio of 1.43%, and how this compares to other potential options being considered for investment. If cheaper, it might make a decent choice, but a more expensive fund might be worth avoiding. Just make sure to pay attention to its rank in case it shifts in the near future.

Want even more information about MCSMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.