Should You Consider Investing in MAPTX?

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Mar. 8 2016, Updated 10:07 a.m. ET

Matthews Pacific Tiger Fund performance

In this article, we’ll outline the performance of the Matthews Pacific Tiger Fund Investor Class (MAPTX). The fund is invested in the stocks of companies such as Baidu (BIDU), Lenovo Group (LNVGY), Yum! Brands (YUM), Cognizant Technology Solutions (CTSH), and HDFC Bank (HDB), among others.

From a purely net asset value return standpoint, MAPTX has had an average one-year period up to February 29, 2016, after a good 2015. It stood sixth and third, respectively, in its peer group for the above-mentioned periods. When we refer to the peer group, we mean the group of 12 funds chosen for this review. For return comparison, we have chosen the iShares MSCI All Country Asia ex Japan ETF (AAXJ) and the WisdomTree Asia Pacific ex-Japan ETF (AXJL).

For evaluating benchmark-related metrics, we’ve chosen AAXJ as the benchmark for all funds in this review, as it tracks the MSCI All Country Asia ex Japan Index.

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Other metrics

MAPTX’s standard deviation, or its volatility of returns, in the one-year period up to February 29 was 16.1%. This was lower than both AAXJ’s 17.9% and the peer group’s average of 16.5%.

The fund’s risk-adjusted returns, calculated via the Sharpe Ratio, were negative for both the one-year period ended February 29 and for 2015. Evaluating a negative Sharpe Ratio may be misleading, so we’ll avoid that.

MAPTX’s information ratio, calculated with AAXJ as the benchmark, was 1.1 for the one-year period ended February 29, ranking it fifth among the 12 funds in this review. The information ratio shows the consistency of a fund manager along with the measure of his ability to generate excess returns over a benchmark. The higher the reading, the better the consistency. For 2015, the fund’s information ratio placed it second among its peers.

A note to investors

MAPTX’s alpha was the fourth best among its peers in the one-year period ended February 29, and it ranked second for 2015. Given its comparatively low standard deviation and reasonable quantitative metrics, MAPTX could make your shortlist of funds investing in the region.

In the next article, we’ll look at the T. Rowe Price New Asia Fund (PRASX).

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