Is Matthews Asia Innovators Investor (MATFX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Sector – Tech fund category, Matthews Asia Innovators Investor (MATFX) could be a potential option. MATFX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

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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 made its debut in December of 1999, and since then, MATFX has accumulated about $730.32 million in assets, per the most up-to-date date available. 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 21.64%, and it sits in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 27.1%, 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. The standard deviation of MATFX over the past three years is 23.46% compared to the category average of 17.46%. Over the past 5 years, the standard deviation of the fund is 20.14% compared to the category average of 14.65%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.8, so investors should note that it is hypothetically less volatile than the market at large. 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. The fund has produced a positive alpha over the past 5 years of 7.52, which shows that managers in this portfolio are skilled in picking 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, MATFX is a no load fund. It has an expense ratio of 1.10% compared to the category average of 1.34%. Looking at the fund from a cost perspective, MATFX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100.

Bottom Line

Overall, Matthews Asia Innovators Investor ( MATFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on MATFXin the Sector – Tech 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. 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.

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