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

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Having trouble finding a Sector - Tech fund? Matthews Asia Innovators Investor (MATFX - Free Report) is a possible starting point. MATFX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

MATFX is part of the Sector - Tech category, which boasts an array of different possible selections. With a much more diversified approach, Sector - Tech mutual funds give investors a way to own a stake in a notoriously risky sector. Tech companies are in various industries like semiconductors, software, internet, and networking, among others.

History of Fund/Manager

Matthews Asia is responsible for MATFX, and the company is based out of San Francisco, CA. Since Matthews Asia Innovators Investor made its debut in December of 1999, MATFX has garnered more than $227.35 million in assets. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. MATFX has a 5-year annualized total return of 16.59% and is in the middle 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 13%, which places it in the middle 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. Compared to the category average of 11.97%, the standard deviation of MATFX over the past three years is 16.32%. The fund's standard deviation over the past 5 years is 14.71% compared to the category average of 11.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In MATFX's case, the fund lost 61.83% in the most recent bear market and underperformed comparable funds by 8.57%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

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 1.08, which means it is likely to be more volatile than the market average. 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. The fund has produced a positive alpha over the past 5 years of 2.48, which shows that managers in this portfolio are skilled in picking 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, MATFX is a no load fund. It has an expense ratio of 1.24% compared to the category average of 1.37%. 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 has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Matthews Asia Innovators Investor looks like a somewhat average choice for investors right now.

Your research on the Sector - Tech segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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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