Pacific Rim - Equity fund seekers should not consider taking a look at Matthews India Fund (MINDX) at this time. MINDX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
MINDX is classified in the Pacific Rim - Equity segment by Zacks, which is an area full of possibilities. Pacific Rim - Equity mutual funds see big investment opportunities in the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. These funds also invest less than 10% of their assets in Japanese firms, as Japan mutual funds are very popular.
History of Fund/Manager
Matthews Asia is based in San Francisco, CA, and is the manager of MINDX. Matthews India Fund debuted in October of 2005. Since then, MINDX has accumulated assets of about $877.92 million, according to the most recently available information. The fund's current manager, Sharat Shroff, has been in charge of the fund since June of 2006.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.82%, 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 3.72%, 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 MINDX over the past three years is 15.93% compared to the category average of 11.92%. Over the past 5 years, the standard deviation of the fund is 15.4% compared to the category average of 12.11%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. MINDX lost 66.29% in the most recent bear market and underperformed comparable funds by 8%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 0.34, so investors should note that 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. The fund has produced a positive alpha over the past 5 years of 1.5, which shows that managers in this portfolio are skilled in picking 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, MINDX is a no load fund. It has an expense ratio of 1.11% compared to the category average of 1.48%. From a cost perspective, MINDX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, Matthews India Fund ( MINDX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Matthews India Fund ( MINDX ) looks like a somewhat weak choice for investors right now.
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