Is Matthews Asia Innovators Investor (MATFX) a Strong Mutual Fund Pick Right Now?
If you’ve been stuck searching for Sector – Tech funds, consider Matthews Asia Innovators Investor (MATFX) as a possibility. MATFX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Sector – Tech funds is an area filled with options, and MATFX is one of them. Sector – Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.
History of Fund/Manager
Matthews Asia is based in San Francisco, CA, and is the manager of MATFX. Matthews Asia Innovators Investor debuted in December of 1999. Since then, MATFX has accumulated assets of about $167.51 million, according to the most recently available information. The fund’s current manager, J. Michael Oh, has been in charge of the fund since January of 2006.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 8.91%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -9.23%, 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. The standard deviation of MATFX over the past three years is 23.4% compared to the category average of 17.54%. Over the past 5 years, the standard deviation of the fund is 24.06% compared to the category average of 18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. MATFX has a 5-year beta of 0.63, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. MATFX’s 5-year performance has produced a positive alpha of 0.17, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MATFX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1.09%. Looking at the fund from a cost perspective, MATFX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
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 strong performance, worse downside risk, and higher fees, Matthews Asia Innovators Investor ( MATFX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don’t stop here for your research on Sector – Tech funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare MATFX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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