Yahoo Finance Is Matthews China Small Companies Investor (MCSMX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Pacific Rim - Equity fund could think about starting with Matthews China Small Companies Investor (MCSMX). MCSMX has a Zacks Mutual Fund Rank of 2 (Buy), 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 debuted in May of 2011. Since then, MCSMX has accumulated assets of about $60.01 million, according to the most recently available information. Winnie Chwang is the fund's current manager and has held that role since August of 2020.
Performance
Investors naturally seek funds with strong performance. MCSMX has a 5-year annualized total return of 4.43% and it sits 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 -19.08%, which places it in the middle 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. Over the past three years, MCSMX's standard deviation comes in at 28.14%, compared to the category average of 20.92%. The fund's standard deviation over the past 5 years is 26.31% compared to the category average of 20.36%. 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 0.48, so it is likely going to be less volatile than the market at large. 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 -1.3, 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 1.41% compared to the category average of 1.17%. So, MCSMX is actually more expensive than its peers from a cost perspective.
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 considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, worse downside risk, and higher fees, Matthews China Small Companies Investor ( MCSMX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don't stop here for your research on Pacific Rim - Equity funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare MCSMX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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