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
-8.63%
YTD Return
(as of 12/08/2023)
$18.42
NAV
(as of 12/08/2023)
+0.02
1 Day NAV Change
(as of 12/08/2023)
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 | $2.35 billion (11/30/2023) | |
Currency | USD | |
Ticker | MAPTX | |
Cusip | 577-130-107 | |
Portfolio Turnover | 5.6% | |
Benchmark | MSCI All Country Asia ex Japan Index | |
Geographic Focus | Asia Ex Japan - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan |
Gross Expense Ratio | 1.10% | |
Net Expense Ratio | 1.09% |
Objective | Long-term capital appreciation |
Strategy | Under normal circumstances, the Matthews Pacific Tiger Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia Ex Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. |
Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
The risks associated with investing in the Fund can be found in the prospectus |
MSCI AC Asia ex Japan Index since inception value calculated from 08/31/94.
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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 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 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 and manages the firm’s Pacific Tiger and Asia ex Japan Total Return Equity Strategies co-manages the Emerging Markets Sustainable Future and Asia Innovators Strategies. Prior to rejoining Matthews 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, 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 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 and manages the firm’s China, China Small Companies and China A-Share Strategies and co-manages the Pacific Tiger, China Dividend and Emerging Markets Equity Strategies. Prior to joining Matthews 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 MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
The MSCI Korea Index is a free float-adjusted market capitalization-weighted index of Korean equities listed in Korea.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
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 September 30, 2023
For the quarter ending September 30, 2023, the Matthews Pacific Tiger Fund returned -5.42% (Investor Class) and -5.37% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned -3.22%.
Market Environment:
The last quarter was a challenge for most major markets in the region. Resilience in the U.S. fueled concerns that the Federal Reserve will sustain interest rates higher for longer and this pressured risk assets globally. A rise in oil prices and renewed strength in the U.S. dollar were further headwinds towards equity markets. In China, economic data continued to be short of market expectations while negative news about the real estate sector continued to linger. The Taiwan and South Korea markets at the index level were weak with increasing concern over the global demand environment into next year. On a more optimistic note, the cadence of policy announcements aimed at supporting China’s domestic economy seems to suggest that the government is intent on getting the economy moving again. Elsewhere, India’s equity market performed strongly in the period helped by a strong macroeconomic backdrop, healthy corporate earnings and solid domestic equity inflows.
Performance Contributors and Detractors:
At a regional level, the portfolio’s stock selection in China/Hong Kong was the biggest detractor from relative performance in the quarter with ongoing concern over consumer demand amid a challenging external environment especially around the property market. Stock selection in India also weighed on performance as some of the growth of the companies in the portfolio didn’t meet heightened market expectations though the growth trend was solid. Conversely, the portfolio’s off-benchmark allocation to the frontier market of Vietnam was the largest contributor to relative returns. Allocation and stock selection in Taiwan and an underweight position in South Korea also contributed positively to relative performance, limiting exposure to the declines both markets endured amid concerns over global growth.
At the sector level, stock selection in consumer discretionary, particularly in China and South Korea, had a negative impact on relative returns. Though the earnings progress of these companies was positive, general concern over the outlook of Chinese consumer demand and global auto demand dragged down share price performance. On the other hand, stock selection in industrials was the top contributor across China, India and South Korea as companies executed well resulting in positive earnings and market share gains.
At the holdings level, China Resources Beer in China and HL Mando, an auto component company in South Korea, were the biggest detractors to relative returns. For China Resources Beer, premiumization of consumption continued and company delivered a solid set of results. However, general concern over weak consumer sentiment in China dragged down performance. Mando was a similar case as the company delivered continued margin expansion with good sales growth but concerns over a potential slowdown in auto demand and increasing competition affected performance negatively.
In contrast, Accton Technology, a networking-equipment company in Taiwan, was the top contributor to total and relative returns in the period. With an acceleration in client upgrade demand for the data center, the company delivered good results with sustainable prospects. Shenzhen Inovance, a leading automation company in China, also contributed as the company continued to gain market share across the business segment, delivering solid earnings growth above the industry average.
Notable Portfolio Changes:
The third quarter was a relatively quiet period as no major directional shifts were made. We remained committed to holding high conviction names in China as we believe positive earning delivery together with attractive valuations provide good long-term opportunities especially around the domestic-oriented industries. At the same time, we continued to search for new opportunities and initiated a position in Orion Corp., a consumer staples company in South Korea, and added to our holding in FPT Corp., a Vietnamese information technology (IT) company. We believe these companies have successfully expanded their end markets beyond their domestic territories by leveraging the competitive strength that they have built in the past and paving ways to sustainable long-term growth.
Outlook:
The macro outlook remains challenging to Asian equity markets amid the prospect that the Federal Reserve may maintain a policy of higher rates for longer. China is also dealing with challenges in the property market and consumer sentiment is low. However, companies in Asia continue to offer resilient earnings prospects especially for the quality companies with strong balance sheets and good management execution. In the near term, the valuation backdrop across different countries in Asia offers a range of opportunities and risks, meanwhile an aggregate level valuation is at a reasonable level. For China, appealing valuations together with large domestic savings and policy cadence changes are the reasons to be constructive. Elsewhere, India’s economic growth and equity market continue to look robust while we remain cautious in factoring the valuation risk. For South Korea and Taiwan, while these countries may be sensitive to a potential slowdown in global demand, we believe their strong economic and trading ties within Asia could serve them as a ballast, particularly if China’s domestic economy starts to stabilize.
View the Fund’s Top 10 holdings as of September 30, 2023. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MAPTX as of 09/30/2023
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, 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.