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)
Long-term capital appreciation
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.
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.
Inception Date | 09/12/1994 | |
Fund Assets | $3.87 billion (02/28/2023) | |
Currency | USD | |
Ticker | MAPTX | |
Cusip | 577-130-107 | |
Portfolio Turnover | 5.6% | |
Benchmark | MSCI All Country Asia ex Japan Index | |
Geographic Focus | Asia Ex Japan - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan |
Gross Expense Ratio | 1.06% | |
Net Expense Ratio | 1.03% |
Objective | Long-term capital appreciation |
Strategy | Under normal circumstances, the Matthews Pacific Tiger Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia Ex Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. |
Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
The risks associated with investing in the Fund can be found in the prospectus |
MSCI AC Asia ex Japan Index since inception value calculated from 08/31/94.
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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.
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.
Lead Manager
Portfolio Manager
Sharat Shroff is a Portfolio Manager at Matthews Asia and manages the firm’s Pacific Tiger and Asia ex Japan Total Return Equity Strategies and co-manages the India Strategy. Prior to joining Matthews Asia in 2005, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology from the Institute of Technology in Varanasi, India and an MBA from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.
Lead Manager
Portfolio Manager
Inbok Song is a Portfolio Manager at Matthews Asia and manages the firm’s Pacific Tiger Strategy and co-manages the Asia ex Japan Total Return Equity Strategy. Prior to rejoining the firm in 2019, Inbok spent three years at Seafarer Capital Partners as a portfolio manager, the firm’s Director of Research and chief data scientist. Previously she was at Thornburg Investment Management as an associate portfolio manager. From 2007 to 2015, she was at Matthews Asia, most recently as a portfolio manager. From 2005 to 2006, Inbok served as an Analyst and Technology Specialist at T. Stone Corp., a private equity firm in Seoul, South Korea. From 2004 to 2005, she was a research engineer for Samsung SDI in Seoul. Inbok received both a B.A. and Masters in Materials Science and Engineering from Seoul National University. She received a Masters in International Management from the University of London, King’s College, and also an M.A. in Management Science and Engineering, with a concentration in finance from Stanford University. Inbok is fluent in Korean.
Co-Manager
Portfolio Manager
Winnie Chwang is a Portfolio Manager at Matthews Asia and manages the firm’s China Small Companies and China Dividend Strategies and co-manages the China, Pacific Tiger and Asia Dividend Strategies. She joined the firm in 2004 and has built her investment career at the firm. Winnie earned an MBA from the Haas School of Business and received her B.A. in Economics with a minor in Business Administration from the University of California, Berkeley. She is fluent in Mandarin and conversational in Cantonese.
Co-Manager
Portfolio Manager
Andrew Mattock is a Portfolio Manager at Matthews Asia and manages the firm’s China and China Small Companies Strategies and co-manages the firm’s Pacific Tiger and China Dividend Strategies. Prior to joining the firm in 2015, he was a Fund Manager at Henderson Global Investors for 15 years, first in London and then in Singapore, managing Asia Pacific equities. Andrew holds a Bachelor of Business majoring in Accounting from ACU. He began his career at PricewaterhouseCoopers and qualified as a Chartered Accountant.
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Investor share class.
Sources: Zephyr StyleADVISOR
Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.
Source: BNY Mellon Investment Servicing (US) Inc.
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
Not all countries are included in the benchmark index(es).
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.
Visit our Glossary of Terms page for definitions and additional information.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI Emerging Markets (EM) Asia Index is a free float-adjusted market capitalization weighted index of the stock markets of China, India, Indonesia, Malaysia, Pakistan, Philippines, South Korea, Taiwan and Thailand. The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The Korea Composite Stock Price Index (KOSPI) is a market capitalization–weighted index of all common stocks listed on the Korea Stock Exchange.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
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.
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
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
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.