If you've been stuck searching for Pacific Rim - Equity funds, consider Hennessy Japan Small Cap Fund Investor (HJPSX Quick QuoteHJPSX - Free Report) as a possibility. HJPSX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

HJPSX is one of many Pacific Rim - Equity funds to choose from. Pacific Rim - Equity mutual funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. Since Japan mutual funds are already popular in their own right, these Pacific funds will usually invest less than 10% of their assets in Japanese companies.

History of Fund/Manager

HJPSX is a part of the Hennessy family of funds, a company based out of Novato, CA. Since Hennessy Japan Small Cap Fund Investor made its debut in August of 2007, HJPSX has garnered more than $32.52 million in assets. Tadahiro Fujimura is the fund's current manager and has held that role since August of 2007.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 4.66%, and is in the bottom 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 -0.24%, 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. HJPSX's standard deviation over the past three years is 14.92% compared to the category average of 15.37%. Over the past 5 years, the standard deviation of the fund is 16.52% compared to the category average of 15.85%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.62, 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 -5.01, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, HJPSX is a no load fund. It has an expense ratio of 1.52% compared to the category average of 0.96%. Looking at the fund from a cost perspective, HJPSX is actually more expensive than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.

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 weak performance, average downside risk, and higher fees, Hennessy Japan Small Cap Fund Investor ( HJPSX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Pacific Rim - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.