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Is Matthews India Fund (MINDX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Pacific Rim - Equity fund category, make sure to pass over Matthews India Fund (MINDX). MINDX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

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. The Matthews India Fund made its debut in October of 2005 and MINDX has managed to accumulate roughly $1.16 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

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 12.5%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 8.03%, 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. MINDX's standard deviation over the past three years is 14.99% compared to the category average of 11.05%. Over the past 5 years, the standard deviation of the fund is 16.18% compared to the category average of 11.66%. 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 MINDX's case, the fund lost 66.29% in the most recent bear market and underperformed comparable funds by 8.44%. This means that the fund could possibly be a worse choice than its peers during a down 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. MINDX has a 5-year beta of 0.43, which means it is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a positive alpha of 7.9. This means 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, MINDX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.35%. So, MINDX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, Matthews India Fund ( MINDX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

Don't stop here for your research on Pacific Rim - Equity 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 MINDX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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