Is Fidelity Japan Smaller Companies (FJSCX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Japan - Equity funds, it would not be wise to start your search with Fidelity Japan Smaller Companies (FJSCX). FJSCX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that FJSCX is a Japan - Equity option, an area loaded with different choices. Primarily invest in companies in one of the world's richest and most diversified economies, Japan. While the country remains partially exposed to global economic trends due to its export focus, its lack of natural resources can also impact the nation.
History of Fund/Manager
FJSCX is a part of the Fidelity family of funds, a company based out of Boston, MA. Fidelity Japan Smaller Companies made its debut in November of 1995, and since then, FJSCX has accumulated about $508.29 million in assets, per the most up-to-date date available. David Jenkins is the fund's current manager and has held that role since March of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FJSCX has a 5-year annualized total return of 8.89% 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 4.97%, 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. Over the past three years, FJSCX's standard deviation comes in at 13.92%, compared to the category average of 16.45%. Looking at the past 5 years, the fund's standard deviation is 12.12% compared to the category average of 13.97%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.55, the fund is likely to be less volatile than the market average. 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 -0.93, 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, FJSCX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 1.48%. From a cost perspective, FJSCX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Fidelity Japan Smaller Companies ( FJSCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on FJSCXin the Japan - Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (FJSCX): Fund Analysis Report
To read this article on Zacks.com click here.
