Is Baron Emerging Markets Retail (BEXFX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Non US - Equity funds, you might want to consider passing on by Baron Emerging Markets Retail (BEXFX) as a possibility. BEXFX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify BEXFX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.

History of Fund/Manager

Baron is responsible for BEXFX, and the company is based out of New York, NY. Baron Emerging Markets Retail debuted in December of 2010. Since then, BEXFX has accumulated assets of about $193.70 million, according to the most recently available information. Michael Kass is the fund's current manager and has held that role since December of 2010.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.73%, and it sits 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 19.37%, 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. BEXFX's standard deviation over the past three years is 15.38% compared to the category average of 12.15%. Looking at the past 5 years, the fund's standard deviation is 17.03% compared to the category average of 13.99%. 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 0.68, which means it is hypothetically 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. BEXFX has generated a negative alpha over the past five years of -5.45, demonstrating that 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, BEXFX is a no load fund. It has an expense ratio of 1.38% compared to the category average of 0.98%. So, BEXFX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Baron Emerging Markets Retail ( BEXFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Baron Emerging Markets Retail ( BEXFX ) looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds 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.

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This article originally published on Zacks Investment Research (zacks.com).

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