If you've been stuck searching for Japan - Equity funds, you might want to consider passing on by Fidelity Japan Smaller Companies (FJSCX) as a possibility. FJSCX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
FJSCX is part of the Japan - Equity section, which is a segment that boasts many possible selections. Japan - Equity mutual funds mostly invest in Japan-based companies, which is one of the world's richest and most diversified economies. Japan's focus on exports allows them to be somewhat exposed to global economic trends, but investors should note that the country's lack of natural resources can also have an impact.
History of Fund/Manager
FJSCX finds itself in the Fidelity family, based out of Boston, MA. Fidelity Japan Smaller Companies made its debut in November of 1995, and since then, FJSCX has accumulated about $766.97 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.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 10.69%, 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 13.37%, 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 9.55%, compared to the category average of 15.9%. Looking at the past 5 years, the fund's standard deviation is 11.47% compared to the category average of 15.99%. This makes the fund less volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. FJSCX lost 58.27% in the most recent bear market and outperformed its peer group by 1.65%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.43, 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. With a positive alpha of 4.65, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 0.93% compared to the category average of 1.22%. FJSCX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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