Having trouble finding a Pacific Rim – Equity fund? Well, Matthews China Small Companies Investor (MCSMX) 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.

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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.

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.

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.

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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.

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.

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