TOP

Matthews Pacific Tiger Fund
MAPTX

Snapshot
  • Seeks alpha in Asia’s emerging economies by capitalizing on the rising Asia consumer
  • High-conviction equity portfolio focused on sustainable growth companies
  • All-cap fundamental approach driven by on-the-ground, proprietary research

09/12/1994

Inception Date

-1.93%

YTD Return

(as of 02/27/2024)

$18.26

NAV

(as of 02/27/2024)

-0.02

1 Day NAV Change

(as of 02/27/2024)

Objective

Long-term capital appreciation

Strategy

Under normal circumstances, the Matthews Pacific Tiger Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia Ex Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health.

Risks

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 09/12/1994
Fund Assets $1.52 billion (01/31/2024)
Currency USD
Ticker MAPTX
Cusip 577-130-107
Portfolio Turnover 5.6%
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia Ex Japan - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan
Fees & Expenses
Gross Expense Ratio 1.10%
Net Expense Ratio 1.09%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 01/31/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund - MAPTX
09/12/1994
MAPTX
-6.18% -0.80% -6.18% -18.36% -13.36% -1.70% 3.27% 6.76%
MSCI All Country Asia ex Japan Index
-5.44% 4.72% -5.44% -7.09% -9.38% 1.41% 4.12% 3.92%
As of 12/31/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund - MAPTX
09/12/1994
MAPTX
1.48% 1.85% -4.87% -4.87% -10.34% 0.56% 3.49% 7.01%
MSCI All Country Asia ex Japan Index
3.55% 6.48% 6.34% 6.34% -6.43% 4.01% 4.17% 4.13%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews Pacific Tiger Fund - MAPTX
MAPTX
-4.87% -20.73% -4.41% 28.83% 10.72% -11.11% 39.96% -0.16% -1.30% 11.79%
MSCI All Country Asia ex Japan Index
6.34% -19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11%

MSCI AC Asia ex Japan Index since inception value calculated from 08/31/94.

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

Assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund’s fees and expenses had not been waived. Performance differences between the Institutional class and the Investor class may arise due to differences in fees charged to each class.

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.

Growth of a Hypothetical $10,000 Investment Since Inception

(as of 12/31/2023)

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gain distributions or redemption of fund shares.

Ratings

  • OVERALL
  • out of 46 funds
  • 3 YEAR
  • out of 46 funds
  • 5 YEAR
  • out of 46 funds
  • 10 YEAR
  • out of 33 funds
  • 1 YEAR
  • 4th
  • 35 out of 39 funds
  • 3 YEAR
  • 3rd
  • 22 out of 37 funds
  • 5 YEAR
  • 4th
  • 36 out of 37 funds
  • 10 YEAR
  • 2nd
  • 10 out of 24 funds
  • SINCE INCEPTION
  • 2nd
  • 2 out of 4 funds

Ratings agency calculation methodology

Portfolio Managers

Sean  Taylor photo
Sean Taylor

Lead Manager

Inbok  Song photo
Inbok Song

Lead Manager

Winnie  Chwang photo
Winnie Chwang

Co-Manager

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Co-Manager

Peeyush  Mittal, CFA photo
Peeyush Mittal, CFA

Co-Manager

Jeremy  Sutch, CFA photo
Jeremy Sutch, CFA

Co-Manager

Portfolio Characteristics

(as of 12/31/2023)
Fund Benchmark
Number of Positions 51 1,249
Weighted Average Market Cap $144.3 billion $117.1 billion
Active Share 70.0 n.a.
P/E using FY1 estimates 20.4x 13.9x
P/E using FY2 estimates 16.9x 12.1x
Price/Cash Flow 13.2 7.1
Price/Book 3.0 1.6
Return On Equity 19.8 15.7
EPS Growth (3 Yr) 23.0% 19.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 12/31/2023)
-3.71%
Alpha
1.04
Beta
92.72%
Upside Capture
108.40%
Downside Capture
-0.62
Sharpe Ratio
-0.79
Information Ratio
4.93%
Tracking Error
94.17

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 01/31/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 9.3
Samsung Electronics Co., Ltd. Information Technology South Korea 5.2
Tencent Holdings, Ltd. Communication Services China/Hong Kong 4.8
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 4.0
ICICI Bank, Ltd. Financials India 3.1
Titan Co., Ltd. Consumer Discretionary India 2.8
PT Bank Central Asia Tbk Financials Indonesia 2.6
AIA Group, Ltd. Financials China/Hong Kong 2.5
Kweichow Moutai Co., Ltd. Consumer Staples China/Hong Kong 2.4
Tata Power Co., Ltd. Utilities India 2.3
TOTAL 39.0

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: BNY Mellon Investment Servicing (US) Inc.

Portfolio Breakdown (%)

(as of 12/31/2023)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 29.2 25.6 3.6
Financials 18.5 20.6 -2.1
Consumer Discretionary 11.3 14.0 -2.7
Communication Services 9.9 9.1 0.8
Consumer Staples 9.5 4.8 4.7
Real Estate 9.2 3.1 6.1
Industrials 6.1 7.6 -1.5
Materials 3.5 5.1 -1.6
Utilities 2.8 2.6 0.2
Health Care 1.8 3.9 -2.1
Energy 0.0 3.7 -3.7
Liabilities in Excess of Cash and Other Assets -1.7 0.0 -1.7

Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.

Country Fund Benchmark Difference
China/Hong Kong 35.0 36.6 -1.6
India 20.2 19.5 0.7
Taiwan 18.9 18.5 0.4
South Korea 14.3 15.1 -0.8
Thailand 3.4 2.0 1.4
Vietnam 3.4 0.0 3.4
Indonesia 2.8 2.2 0.6
Philippines 2.1 0.7 1.4
Singapore 1.5 3.7 -2.2
Malaysia 0.0 1.5 -1.5
Macau 0.0 0.2 -0.2
Liabilities in Excess of Cash and Other Assets -1.7 0.0 -1.7

Not all countries are included in the benchmark index(es).

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 64.5 58.3 6.2
Large Cap ($10B-$25B) 17.6 21.9 -4.3
Mid Cap ($3B-$10B) 19.6 18.4 1.2
Small Cap (under $3B) 0.0 1.5 -1.5
Liabilities in Excess of Cash and Other Assets -1.7 0.0 -1.7

Source: FactSet Research Systems.

Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Distributions

Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Short Term
Capital Gains
Long Term
Capital Gains
Total Distributions
Per Share
% of NAV Nondividend Distribution (Return of Capital)
12/13/2023 12/14/2023 $0.54465 $0.00000 $0.00000 $0.54465 3.0% N.A.
12/13/2022 12/14/2022 $0.00000 $0.09181 $1.62570 $1.71751 7.7% N.A.
View History

 

There is no guarantee that the Fund will pay or continue to pay distributions. 

Past performance is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost.

Commentary

Period ended December 31, 2023

For the year ending December 31, 2023, the Matthews Pacific Tiger Fund returned -4.87% (Investor Class) and -4.75% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 6.34% over the same period. For the fourth quarter, the Fund returned 1.85% (Investor Class) and 1.87% (Institutional Class), while the benchmark returned 6.48%.

Market Environment 

The environment in 2023 was challenging especially for China. The market in China started with the hope of a strong recovery in the economy. This turned out to be short lived, leading to an adverse backdrop for the rest of the year. Earnings in the China universe adjusted down sequentially during 2023 and together with a challenging external environment, geopolitical tensions and slow policy reactions, this led to a valuation derating in China’s equity market. Elsewhere in the region, India was a strong performer, benefiting from domestic capital flows and sustained earnings delivery after reopening from pandemic lockdowns. Earnings delivery was widespread across several sectors such as financials, consumers and industrials. Though the South Korea and Taiwan markets started with concern over the demand environment and inventory digestion cycle, the technology heavy sectors in both countries performed well with the emergence of secular growth drivers such as data, artificial intelligence (AI) and batteries for electric vehicles (EVs). Therefore, those sectors in the two countries experienced a valuation re-rating. 

Performance Contributors and Detractors

At the country level, stock selection in China/Hong Kong detracted the most from total and relative returns in 2023. China’s economic recovery has been weaker-than-expected and this resulted in earnings downgrades across sectors, especially consumer and industrials. Consequently, consumer discretionary stocks were derated, followed by consumer staples both of which affected the portfolio’s stock selection negatively. Stock selection in India and the Philippines also detracted from relative performance. At the sector level, stock selection in consumer discretionary was the largest detractor to relative returns while an overweight and stock selection in consumer staples as well as stock selection in industrials also detracted. On the other hand, stock selection in Taiwan and Indonesia contributed the most to relative returns for the year. At the sector level, information technology (IT) contributed the most to the Fund’s total return for the year.

Among individual holdings, JD.com, China’s leading e-commerce platform company, and pharmaceutical company Wuxi Biologics were notable detractors. Weak consumer sentiment as well as increasing competition in the e-commerce industry slowed down JD’s sales growth meaningfully. While the company achieved good cost controls leading to faster earnings growth, its slower revenue growth materially dragged valuation multiples down. Wuxi Biologics, which provides contract development and manufacturing services, experienced a slowdown of its earnings growth due to insufficient COVID-related manufacturing as well as slower development projects from the tight biotechnology funding environment.

Conversely, Accton Technology, a networking equipment provider in Taiwan, and Titan Company, India’s leading jeweler, were two notable contributors to the Fund’s overall performance. As supply disruption normalized into 2023, Accton Technology started to deliver its orders on schedule. Additionally, demand for its service has been robust due to customer’s datacenter upgrades. Titan Company continued to deliver resilient earnings growth and brand value, a reflection of the robust consumption environment in India. While Titan’s valuation has been at the high end of the range compared to other consumer companies in India, its category expansion and consistent execution has provided strong earnings visibility. 

Notable Portfolio Changes 

We continue to seek to capture the growing investment opportunities in Asia while assessing risks, especially when they are reflected in valuations. We added new positions from India given the country’s growth prospects remain robust and more structural, leading to broader investment opportunities. Tata Consumer Products, a leading beverage-focused fast-moving consumer goods company, is a good example of the increasing demand for premium products in India. We also added Taiwanese company ASE Technology, a globally leading back-end packing supplier as secular demand for AI and data processing-related semiconductors continue to require high-end manufacturing.  

Outlook

Ambiguities remain in the outlook for the global economy including Asian countries. China continues to deal with challenges in its property market and weak consumer sentiment. South Korea and Taiwan are going through the uncertainties of global demand and the inventory digestion cycle. In India, a long-subdued CapEx cycle has restarted, and overall consumer demand has recovered though there are still urban and rural consumer divergences. At the global macro level, the U.S. Federal Reserve’s interest rate policy remains on an uncertain path and related changes in market expectations are causing volatility in equities. 

However, Asia ex Japan valuations are favorably positioned at around 12 x FY24 earnings with EPS growth expected to be over 19% for the year. While earnings downgrade risks remain, we believe that, fundamentally, the Asia ex Japan region has many companies with earnings generation power. We continue to focus on keeping the portfolio invested in companies demonstrating durable earnings growth combined with reasonable valuations in this uncertain environment. 

View the Fund’s Top 10 holdings as of December 31, 2023. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MAPTX as of 12/31/2023
1YR 3YR 5YR 10YR Since Inception Inception Date
-4.87% -10.34% 0.56% 3.49% 7.01% 09/12/1994

All performance quoted is past performance and is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund's fees and expenses had not been waived. Please see the Fund's most recent month-end performance.

Fees & Expenses
Gross Expense Ratio 1.10%
Net Expense Ratio 1.09%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2024. Please see the Fund’s prospectus for additional details.

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.

 

Visit our Glossary of Terms page for definitions and additional information.

Index Definitions

The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Neither the funds nor the Investment Advisor accept any liability for losses either direct or consequential caused by the use of this information.

The views and opinions in the commentary were as of the report date, subject to change and may not reflect current views. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the managers reserve the right to change their views about individual stocks, sectors, and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund's future investment intent. It should not be assumed that any investment will be profitable or will equal the performance of any securities or any sectors mentioned herein. The information does not constitute a recommendation to buy or sell any securities mentioned.