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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

-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)

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

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 11/30/2023
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
4.19% -3.62% -6.25% -8.43% -8.04% -0.11% 3.31% 6.98%
MSCI All Country Asia ex Japan Index
6.96% 0.11% 2.70% 2.55% -5.45% 2.73% 3.69% 4.01%
As of 09/30/2023
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
-3.98% -5.42% -6.60% 2.26% -5.48% -0.57% 3.61% 7.01%
MSCI All Country Asia ex Japan Index
-2.65% -3.22% -0.13% 11.28% -2.99% 0.88% 3.86% 3.94%
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 09/30/2023)

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 48 funds
  • 3 YEAR
  • out of 48 funds
  • 5 YEAR
  • out of 47 funds
  • 10 YEAR
  • out of 33 funds
  • 1 YEAR
  • 4th
  • 34 out of 38 funds
  • 3 YEAR
  • 3rd
  • 20 out of 37 funds
  • 5 YEAR
  • 3rd
  • 25 out of 37 funds
  • 10 YEAR
  • 2nd
  • 9 out of 24 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 09/30/2023)
Fund Benchmark
Number of Positions 49 1,244
Weighted Average Market Cap $123.8 billion $104.8 billion
Active Share 69.5 n.a.
P/E using FY1 estimates 20.8x 13.2x
P/E using FY2 estimates 16.7x 11.4x
Price/Cash Flow 13.4 6.8
Price/Book 3.0 1.5
Return On Equity 17.8 15.2
EPS Growth (3 Yr) 20.4% 18.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 09/30/2023)
-2.05%
Alpha
1.07
Beta
102.82%
Upside Capture
108.99%
Downside Capture
-0.34
Sharpe Ratio
-0.51
Information Ratio
4.93%
Tracking Error
94.99

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 11/30/2023)
Name Sector Country % Net Assets
Samsung Electronics Co., Ltd. Information Technology South Korea 8.3
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 7.9
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.6
Central Pattana Public Co., Ltd. Real Estate Thailand 3.4
Titan Co., Ltd. Consumer Discretionary India 3.1
PT Bank Central Asia Tbk Financials Indonesia 3.0
ICICI Bank, Ltd. Financials India 2.8
Kweichow Moutai Co., Ltd. Consumer Staples China/Hong Kong 2.7
AIA Group, Ltd. Financials China/Hong Kong 2.6
KE Holdings, Inc. Real Estate China/Hong Kong 2.6
TOTAL 42.0

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 09/30/2023)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 24.2 23.1 1.1
Financials 17.8 21.1 -3.3
Consumer Discretionary 17.1 14.9 2.2
Consumer Staples 9.7 5.0 4.7
Real Estate 8.5 3.2 5.3
Industrials 7.9 7.4 0.5
Communication Services 7.7 9.9 -2.2
Materials 3.5 5.3 -1.8
Health Care 2.1 3.9 -1.8
Utilities 1.9 2.5 -0.6
Energy 0.0 3.7 -3.7
Liabilities in Excess of Cash and Other Assets -0.4 0.0 -0.4

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 46.5 40.4 6.1
India 16.7 18.1 -1.4
Taiwan 15.9 16.8 -0.9
South Korea 11.1 14.0 -2.9
Indonesia 3.2 2.3 0.9
Thailand 2.9 2.1 0.8
Vietnam 2.5 0.0 2.5
Philippines 1.5 0.7 0.8
Singapore 0.0 3.8 -3.8
Malaysia 0.0 1.6 -1.6
Macau 0.0 0.2 -0.2
Liabilities in Excess of Cash and Other Assets -0.4 0.0 -0.4

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 64.2 57.5 6.7
Large Cap ($10B-$25B) 16.9 20.6 -3.7
Mid Cap ($3B-$10B) 18.8 20.0 -1.2
Small Cap (under $3B) 0.4 1.9 -1.5
Liabilities in Excess of Cash and Other Assets -0.4 0.0 -0.4

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 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
1YR 3YR 5YR 10YR Since Inception Inception Date
2.26% -5.48% -0.57% 3.61% 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.