If you have been looking for Sector – Tech funds, it would not be wise to start your search with Matthews Asia Innovators Investor (MATFX). MATFX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
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.
MATFX finds itself in the Matthews Asia family, based out of San Francisco, CA. Matthews Asia Innovators Investor debuted in December of 1999. Since then, MATFX has accumulated assets of about $184.62 million, according to the most recently available information. The fund is currently managed by J. Michael Oh who has been in charge of the fund since January of 2006.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.29%, 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 10.49%, which places it in the middle 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. MATFX’s standard deviation over the past three years is 22.73% compared to the category average of 17.32%. The fund’s standard deviation over the past 5 years is 22% compared to the category average of 16.76%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.57, so it is likely going to be 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. MATFX’s 5-year performance has produced a negative alpha of -4.18, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 1.29% compared to the category average of 1.10%. From a cost perspective, MATFX is actually more expensive 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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, Matthews Asia Innovators Investor ( MATFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Matthews Asia Innovators Investor ( MATFX ) looks like a poor potential 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. 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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This article originally published on Zacks Investment Research (zacks.com).