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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

1.09%

YTD Return

(as of 03/22/2023)

$20.38

NAV

(as of 03/22/2023)

+0.03

1 Day NAV Change

(as of 03/22/2023)

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 $3.87 billion (02/28/2023)
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 1.06%
Net Expense Ratio 1.03%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 02/28/2023
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
-7.08% -0.77% 1.59% -13.71% 2.24% -0.39% 4.21% 7.48%
MSCI All Country Asia ex Japan Index
-6.81% 0.71% 0.85% -14.07% 1.62% -0.61% 3.79% 4.06%
As of 12/31/2022
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
-2.33% 9.48% -20.73% -20.73% -0.80% -0.80% 4.38% 7.46%
MSCI All Country Asia ex Japan Index
-0.14% 11.43% -19.36% -19.36% -1.15% -0.34% 3.87% 4.05%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Matthews Pacific Tiger Fund - MAPTX
MAPTX
-20.73% -4.41% 28.83% 10.72% -11.11% 39.96% -0.16% -1.30% 11.79% 3.63%
MSCI All Country Asia ex Japan Index
-19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34%

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 12/31/2022)

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 48 funds
  • 3 YEAR
  • out of 48 funds
  • 5 YEAR
  • out of 44 funds
  • 10 YEAR
  • out of 32 funds
  • 1 YEAR
  • 2nd
  • 16 out of 32 funds
  • 3 YEAR
  • 2nd
  • 14 out of 31 funds
  • 5 YEAR
  • 3rd
  • 21 out of 29 funds
  • 10 YEAR
  • 2nd
  • 5 out of 18 funds
  • SINCE INCEPTION
  • 2nd
  • 2 out of 4 funds

Ratings agency calculation methodology

Portfolio Managers

Sharat  Shroff, CFA photo
Sharat Shroff, CFA

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

Portfolio Characteristics

(as of 12/31/2022)
Fund Benchmark
Number of Positions 52 1,187
Weighted Average Market Cap $105.1 billion $99.5 billion
Active Share 68.0 n.a.
P/E using FY1 estimates 19.3x 11.8x
P/E using FY2 estimates 17.7x 11.8x
Price/Cash Flow 13.9 6.8
Price/Book 3.0 1.5
Return On Equity 16.0 14.5
EPS Growth (3 Yr) 13.6% 9.8%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 12/31/2022)
0.79%
Alpha
1.08
Beta
105.49%
Upside Capture
102.05%
Downside Capture
-0.06
Sharpe Ratio
0.06
Information Ratio
5.45%
Tracking Error
95.03

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 02/28/2023)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 6.2
Samsung Electronics Co., Ltd. Information Technology South Korea 4.8
Tencent Holdings, Ltd. Communication Services China/Hong Kong 4.6
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 3.7
ICICI Bank, Ltd. Financials India 3.2
Central Pattana Public Co., Ltd. Real Estate Thailand 3.0
Meituan Consumer Discretionary China/Hong Kong 3.0
China Resources Beer Holdings Co., Ltd. Consumer Staples China/Hong Kong 2.8
Kweichow Moutai Co., Ltd. Consumer Staples China/Hong Kong 2.7
PT Bank Central Asia Tbk Financials Indonesia 2.6
TOTAL 36.6

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 12/31/2022)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 21.5 15.0 6.5
Information Technology 19.9 21.0 -1.1
Financials 18.1 21.5 -3.4
Consumer Staples 9.4 5.5 3.9
Real Estate 9.2 4.0 5.2
Industrials 8.7 6.8 1.9
Communication Services 5.6 9.9 -4.3
Materials 3.0 5.4 -2.4
Utilities 2.1 3.1 -1.0
Health Care 2.0 4.1 -2.1
Energy 0.0 3.7 -3.7
Cash and Other Assets, Less Liabilities 0.5 0.0 0.5

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 50.4 44.3 6.1
India 15.1 16.3 -1.2
Taiwan 13.8 15.4 -1.6
South Korea 8.7 12.8 -4.1
Thailand 3.2 2.5 0.7
Indonesia 2.6 2.2 0.4
Philippines 2.6 0.8 1.8
Vietnam 1.6 0.0 1.6
Singapore 1.5 3.9 -2.4
Malaysia 0.0 1.8 -1.8
Cash and Other Assets, Less Liabilities 0.5 0.0 0.5

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 56.9 56.5 0.4
Large Cap ($10B-$25B) 24.6 22.5 2.1
Mid Cap ($3B-$10B) 16.7 19.3 -2.6
Small Cap (under $3B) 1.3 1.6 -0.3
Cash and Other Assets, Less Liabilities 0.5 0.0 0.5

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)
12/13/2022 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, 2022

For the year ending December 31, 2022, the Matthews Pacific Tiger Fund returned -20.73% (Investor Class) and -20.62% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned -19.36% over the same period. For the fourth quarter, the Fund returned 9.48% (Investor Class) and 9.48% (Institutional Class), while the benchmark returned 11.43%.

Market Environment:

2022 was a tough year for Asian equities, although the year ended on a positive note as the prospects of a post-COVID recovery in China started to gain traction. Chinese equities posted some of the strongest results within global markets with a rebound in sentiment stemming from the government’s statements and actions which support the easing of COVID-related restrictions in favor of ‘living with Covid’ policies. In addition, the Chinese authorities seem to be shifting their stance from risk-management (in areas like property) to reviving growth.  In general, South Asia proved to be more resilient during the year given the domestic orientation of many of these economies, and an outlook for gradual recovery in economic activity.  Meanwhile, the more export-oriented countries such as Korea and Taiwan struggled in the first nine months but finished the year on a slightly positive as investors seem to be anticipating a peak in U.S. interest rates. An expectation of a moderation in U.S. interest rates may also have been a driver of a partial recovery in Asian currencies in the fourth quarter. 

Performance Contributors and Detractors:

From the country perspective, stock selection within Taiwan, India and the Philippines contributed the most to the Fund’s relative performance for the year as domestic economic activities continued to recover in India and the Philippines and supply chain constraints have eased in the case of Taiwan. On the other hand, stock selection in South Korea and Singapore as well as our zero exposure to Malaysia detracted from performance. Delays in the operational milestones in some of the portfolio’s South Korean holdings caused weaker earning results and accelerated derating of those companies. From a sector perspective, our allocation and stock selection within real estate and consumer discretionary contributed the most while our stock selection within materials and communication services detracted the most from relative performance.

Turning to individual securities, Central Pattana Public, Thailand's largest retail property development and investment company, contributed the most to the portfolio’s absolute and relative performance during the year. While the company is classified under the real estate sector, the stock performed well as its underlying operations were driven by consumption recovery in the Southeast Asia region. YUM China, one of the leading restaurant chains in China was another notable contributor. Amid challenging external environment, the company was quick to adjust their operation towards delivery business, and as a result unit economics of their stores remained healthy. The company was able to continue on the path towards its annual store expansion goal. In contrast, Hybe was one of the detractors. Hybe’s efforts to achieve operational leverage with a platform approach has been delayed while one of its key intellectual property assets expected to contribute lower in the foreseeable future. Given the uncertainty combined with still heightened valuation level, we exited our position during the fourth quarter.  On the other hand, HL Mando, a growing auto components company in South Korea had negative performance contribution even though its earnings were resilient. Sentiment around the uncertain auto demand and lingering impact on the supply chain constraints and subsequent cost pressure derated the company’s valuation. 

Notable Portfolio Changes:

We took advantage of market volatility throughout the year to rotate capital and make adjustments to the portfolio, finding opportunities in China given the potential for the country’s domestic consumption recovery. Platform-driven consumer discretionary companies such as Meituan showed strong cost control with decent revenue growth amid macroeconomic uncertainty. Additionally, valuations of these companies were at the compelling level in absolute and historical perspective with strong cash flow generation. These additions were funded by trimming positions in India as valuations became demanding given past strong performance. We also trimmed a couple of our information technology positions, Samsung Electronics in South Korea and Taiwan Semiconductor Manufacturing in Taiwan. Although these companies have strong fundamentals, near-term earnings uncertainty risk has increases as both names are exposed to the slowing global demand environment.

Outlook:

All eyes are squarely focused on economic recovery in China as the government has pared back all COVID-related constraints in an accelerated manner since November 2022. The surge in Chinese household deposits during the past two years may support a recovery in consumption which is emerging as the most important driver of economic activity in 2023. With the prospects for global growth in 2023 looking less inspiring, we believe the domestically oriented economies in Asia may be better positioned to deliver growth. Furthermore, the competitive landscape has altered—somewhat dramatically in certain industries—in the post-COVID world and that is creating opportunities for growth through market share gains, new growth areas, and acceleration of certain trends that were slowly developing across the region. Examples include consolidation across many parts of retail sector in Asia, new and emerging sectors like solar/renewables, and a thrust in the augmentation of manufacturing supply chains outside of China. All of these are areas that continue to be attractive.

 

Top 10 holdings as of December 31, 2022. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MAPTX as of 12/31/2022
1YR 3YR 5YR 10YR Since Inception Inception Date
-20.73% -0.80% -0.80% 4.38% 7.46% 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 1.06%
Net Expense Ratio 1.03%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2023. 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.