Under normal circumstances, the Matthews Emerging Markets Equity 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 emerging market countries. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. Certain emerging market countries may also be classified as “frontier” market countries, which are a subset of emerging market countries with newer or even less developed economies and markets, such as Sri Lanka and Vietnam. The list of emerging market countries and frontier market countries may change from time to time. The Fund may also invest in companies located in developed countries; however, the Fund may not invest in any company located in a developed country if, at the time of purchase, more than 20% of the Fund’s assets are invested in developed market companies.
Risks
Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets 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.
Emerging Markets - Countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe
Fees & Expenses
Gross Expense Ratio
1.58%
Net Expense Ratio
1.08%
Objective
Long-term capital appreciation
Strategy
Under normal circumstances, the Matthews Emerging Markets Equity 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 emerging market countries. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. Certain emerging market countries may also be classified as “frontier” market countries, which are a subset of emerging market countries with newer or even less developed economies and markets, such as Sri Lanka and Vietnam. The list of emerging market countries and frontier market countries may change from time to time. The Fund may also invest in companies located in developed countries; however, the Fund may not invest in any company located in a developed country if, at the time of purchase, more than 20% of the Fund’s assets are invested in developed market companies.
Risks
Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets 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
Performance
Monthly
Quarterly
Calendar Year
As of 05/31/2023
Average Annual Total Returns
Name
1MO
3MO
YTD
1YR
3YR
5YR
10YR
Since Inception
Inception Date
Matthews Emerging Markets Equity Fund - MEGMX
04/30/2020
MEGMX
-1.48%
-1.05%
1.35%
-3.04%
6.57%
n.a.
n.a.
8.44%
MSCI Emerging Markets Index
-1.65%
0.24%
1.16%
-8.07%
3.86%
n.a.
n.a.
4.02%
As of 03/31/2023
Average Annual Total Returns
Name
1MO
3MO
YTD
1YR
3YR
5YR
10YR
Since Inception
Inception Date
Matthews Emerging Markets Equity Fund - MEGMX
04/30/2020
MEGMX
0.96%
3.41%
3.41%
-7.69%
n.a.
n.a.
n.a.
9.70%
MSCI Emerging Markets Index
3.07%
4.02%
4.02%
-10.30%
n.a.
n.a.
n.a.
5.25%
For the years ended December 31st
Name
2022
2021
Matthews Emerging Markets Equity Fund - MEGMX
MEGMX
-20.94%
-0.60%
MSCI Emerging Markets Index
-19.74%
-2.22%
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
Year to Date and Since Inception performance with less than one year of history represents actual performance, not annualized.
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 $10,000 Investment Since Inception
(as of 03/31/2023)
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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.
John Paul Lech is a Portfolio Manager at Matthews and manages the firm’s Emerging Markets Equity and Emerging Markets ex China Strategies. Prior to joining Matthews in 2018, he spent most of his 10 years at OppenheimerFunds (subsequently acquired by Invesco) as an Analyst and Portfolio Manager on a diversified emerging market equity strategy. John Paul started his career as an Analyst and Associate at Citigroup Global Markets, Inc. John Paul earned both an M.A. and a B.S.F.S from the Walsh School of Foreign Service at Georgetown University. He is fluent in Spanish and conversational in French and Portuguese.
Alex Zarechnak is a Portfolio Manager at Mathews and manages the firm’s Emerging Markets Equity, Emerging Markets ex China Strategies and co-manages the Emerging Markets Small Companies Strategy. Prior to joining the firm in 2020, he spent a total of 15 years (1998 – 2006 and 2012 – 2019) at Wellington Management as an analyst for the firm’s flagship Emerging Markets Equity fund as a generalist first covering CEEMEA, then Latin America. From 2006-2012, he was a regional equity analyst at Capital Group, covering Emerging Markets with a focus on energy, telecoms and consumer sectors in Latin America and CEEMEA. Alex began his Emerging Markets career as a Russia equity analyst with Templeton Emerging Markets, based in Moscow. He earned a B.A. in Economics and Government from the College of William & Mary. Alex is fluent in Russian.
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.
Peeyush Mittal is a Portfolio Manager at Matthews and manages the firm’s India Strategy and co-manages the Emerging Markets Equity, Emerging Markets ex China and Asia Growth Strategies. Prior to joining the Matthews in 2015, he spent over three years at Franklin Templeton Asset Management India, most recently as a Senior Research Analyst. Previously, he was with Deutsche Asset & Wealth Management New York, from 2009 to 2011, researching U.S. and European stocks in the industrials and materials sectors. Peeyush began his career in 2003 with Scot Forge as an Industrial Engineer, and was responsible for implementing Lean Manufacturing systems on the production shop floor. Peeyush earned his M.B.A from The University of Chicago Booth School of Business. He received a Master of Science in Industrial Engineering from The Ohio State University and received a Bachelor of Technology in Metallurgical Engineering from The Indian Institute of Technology Madras. He is fluent in Hindi.
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 03/31/2023)
Sector Allocation
Country Allocation
Market Cap Exposure
Sector
Fund
Benchmark
Difference
Financials
24.1
21.0
3.1
Information Technology
21.4
20.5
0.9
Consumer Discretionary
12.3
13.8
-1.5
Materials
9.7
8.6
1.1
Industrials
6.6
6.0
0.6
Communication Services
5.3
10.6
-5.3
Energy
5.0
4.7
0.3
Real Estate
4.9
1.9
3.0
Consumer Staples
4.5
6.5
-2.0
Health Care
3.9
3.8
0.1
Utilities
0.0
2.6
-2.6
Cash and Other Assets, Less Liabilities
2.3
0.0
2.3
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
20.8
32.8
-12.0
India
14.1
13.0
1.1
Mexico
10.2
2.6
7.6
South Korea
7.1
11.9
-4.8
Brazil
7.1
4.9
2.2
Taiwan
6.4
15.1
-8.7
Vietnam
6.2
0.0
6.2
United States
5.2
0.0
5.2
France
2.7
0.0
2.7
United Kingdom
2.7
0.0
2.7
Australia
2.6
0.0
2.6
Philippines
2.5
0.7
1.8
Singapore
2.3
0.0
2.3
Indonesia
1.9
1.9
0.0
Poland
1.6
0.7
0.9
Kazakhstan
1.2
0.0
1.2
Zambia
1.2
0.0
1.2
United Arab Emirates
1.1
1.2
-0.1
Thailand
0.9
2.1
-1.2
Saudi Arabia
0.0
3.9
-3.9
South Africa
0.0
3.5
-3.5
Malaysia
0.0
1.5
-1.5
Kuwait
0.0
0.9
-0.9
Qatar
0.0
0.9
-0.9
Chile
0.0
0.6
-0.6
Turkey
0.0
0.6
-0.6
Greece
0.0
0.4
-0.4
Peru
0.0
0.3
-0.3
Czech Republic
0.0
0.2
-0.2
Hungary
0.0
0.2
-0.2
Colombia
0.0
0.1
-0.1
Egypt
0.0
0.1
-0.1
Cash and Other Assets, Less Liabilities
2.3
0.0
2.3
Not all countries are included in the benchmark index(es).
Equity market cap of issuer
Fund
Benchmark
Difference
Mega Cap (over $25B)
55.9
54.4
1.5
Large Cap ($10B-$25B)
12.4
20.9
-8.5
Mid Cap ($3B-$10B)
20.8
22.9
-2.1
Small Cap (under $3B)
8.7
1.8
6.9
Cash and Other Assets, Less Liabilities
2.3
0.0
2.3
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
$0.20142
$0.00000
$0.00000
$0.20142
1.7%
N.A.
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.
For the quarter ending March 31, 2023, the Matthews Emerging Markets Equity Fund returned 3.41% (Investor Class) and 3.41% (Institutional Class), while its benchmark, the MSCI Emerging Markets Index, returned 4.02%.
Market Environment:
Despite the shocking failures of Silicon Valley Bank and Signature Bank and serious concerns about other U.S. regional banks, most markets ended the quarter higher than the beginning of the year. Markets also weathered the Federal Reserve’s eighth and ninth rate hikes in its current cycle, which began in March 2022. The S&P 500 finished the quarter up 7.5%, and the MSCI All Country World Index was up 7.4%. The U.S. dollar index began the year at a strong 104.5, rallied to a peak of 105.6 in early March but had fallen to 102.5 by quarter end. The Chinese economy’s re-opening, more evidence of declining inflation in the U.S. and other countries and growing optimism that a global recession would be either mild or not happen at all, were all factors that helped lift markets around the world in the first quarter.
Performance Contributors and Detractors:
At the country level, our overweight and stock selection in Mexico – our largest country active position compared to the benchmark – was the biggest contributor to relative performance in the first quarter. Several stocks in Mexico were important positive contributors in the quarter and they rallied partly on optimism that Mexico is in store for a renewed Foreign Direct Investment (FDI) cycle given near-shoring trends. Stock selection in India was a positive contributor as there is no exposure to problematic investment groups. Our lack of holdings in Saudi Arabia and South Africa was also a contributor.
On the other hand, our overweight and stock selection in Brazil was the biggest detractor to performance. Investors were disappointed that newly elected President Lula began to push for far-left policies, including criticism of central bank austerity, and prepare for more government spending. We weren’t surprised by these moves and don’t expect them to derail the positive fundamentals of the companies we are invested in. Our underweights in Taiwan and South Korea were also detractors resulting from our lack of ownership of semiconductor and technology stocks that performed well in those markets.
At the sector level, stock selection in real estate was the biggest contributor to relative performance while stock selection in information technology was the biggest detractor.
Among individual holdings, our off-benchmark positions in U.S. semiconductor equipment company Applied Materials and French luxury goods company LVMH—which both derive a significant part of their earnings from emerging markets—were top contributors to relative performance. In contrast, the biggest detractor was Brazilian medical insurer and provider Hapvida, which failed to produce evidence that it is recovering from a challenging post-pandemic and post-merger reality. Call center company TDCX in Singapore and Indian restaurant operator Restaurant Brands Asia were also meaningful detractors.
Notable Portfolio Changes:
We added six new positions to the portfolio during the quarter. They included Thai hospital operator Bangkok Dusit, Indian cement company Ultratech and the Chinese biopharmaceutical Innovent Biologics. Bangkok Dusit is a leading hospital operator in Thailand and is benefiting from the return of health tourism and constructive changes in Thailand’s insurance market. Ultratech’s cement business is heavily geared towards consumption and general economic activity in India, where real GDP on consensus is north of 6% for the next few years. There are relatively high barriers to entry in many of Ultratech’s markets and we believe the company is at an accessible entry point for its potential growth. Innovent is a world-class biopharmaceutical company that develops, manufactures and commercializes high-quality, innovative medicines for the treatment of cancer, autoimmune metabolic and other major diseases. It also has an emerging business in diabetes and obesity that may have potential.
We exited seven positions in the quarter. They included Petrobras in Brazil, Qatar National Bank and BIM Birlesik Magazalar in Turkey. With Petrobras, the combination of high oil prices and a more meddlesome administration may constrain the potential upside to the stock. With QNB, we exited a bank that has not been positively geared to Qatar’s economic cycle, as we had expected. In the case of BIM, a Turkish discount retailer, the stock had done well and we exited as the Turkey election approached. We don’t know how the election will turn out but multiple potential policy outcomes could be challenging for Turkish consumers and the currency.
Outlook:
In our conversations with companies, few have strong predictions about what lies ahead for the world economy or in important political contests. But few are seeing meaningful stresses to their businesses from macro issues and most are continuing to invest for the future. These include companies in the whole range of industries we study, from mining to energy to consumer to finance. Our focus remains on good companies—those which can succeed in a variety of macroeconomic and political environments.
Top 10 holdings as of March 31, 2023. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MEGMX as of 03/31/2023
1YR
3YR
5YR
10YR
Since Inception
Inception Date
-7.69%
N.A.
N.A.
N.A.
9.70%
04/30/2020
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
1.58%
Net Expense Ratio
1.08%
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 emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
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.
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 March 31, 2023
For the quarter ending March 31, 2023, the Matthews Emerging Markets Equity Fund returned 3.41% (Investor Class) and 3.41% (Institutional Class), while its benchmark, the MSCI Emerging Markets Index, returned 4.02%.
Market Environment:
Despite the shocking failures of Silicon Valley Bank and Signature Bank and serious concerns about other U.S. regional banks, most markets ended the quarter higher than the beginning of the year. Markets also weathered the Federal Reserve’s eighth and ninth rate hikes in its current cycle, which began in March 2022. The S&P 500 finished the quarter up 7.5%, and the MSCI All Country World Index was up 7.4%. The U.S. dollar index began the year at a strong 104.5, rallied to a peak of 105.6 in early March but had fallen to 102.5 by quarter end. The Chinese economy’s re-opening, more evidence of declining inflation in the U.S. and other countries and growing optimism that a global recession would be either mild or not happen at all, were all factors that helped lift markets around the world in the first quarter.
Performance Contributors and Detractors:
At the country level, our overweight and stock selection in Mexico – our largest country active position compared to the benchmark – was the biggest contributor to relative performance in the first quarter. Several stocks in Mexico were important positive contributors in the quarter and they rallied partly on optimism that Mexico is in store for a renewed Foreign Direct Investment (FDI) cycle given near-shoring trends. Stock selection in India was a positive contributor as there is no exposure to problematic investment groups. Our lack of holdings in Saudi Arabia and South Africa was also a contributor.
On the other hand, our overweight and stock selection in Brazil was the biggest detractor to performance. Investors were disappointed that newly elected President Lula began to push for far-left policies, including criticism of central bank austerity, and prepare for more government spending. We weren’t surprised by these moves and don’t expect them to derail the positive fundamentals of the companies we are invested in. Our underweights in Taiwan and South Korea were also detractors resulting from our lack of ownership of semiconductor and technology stocks that performed well in those markets.
At the sector level, stock selection in real estate was the biggest contributor to relative performance while stock selection in information technology was the biggest detractor.
Among individual holdings, our off-benchmark positions in U.S. semiconductor equipment company Applied Materials and French luxury goods company LVMH—which both derive a significant part of their earnings from emerging markets—were top contributors to relative performance. In contrast, the biggest detractor was Brazilian medical insurer and provider Hapvida, which failed to produce evidence that it is recovering from a challenging post-pandemic and post-merger reality. Call center company TDCX in Singapore and Indian restaurant operator Restaurant Brands Asia were also meaningful detractors.
Notable Portfolio Changes:
We added six new positions to the portfolio during the quarter. They included Thai hospital operator Bangkok Dusit, Indian cement company Ultratech and the Chinese biopharmaceutical Innovent Biologics. Bangkok Dusit is a leading hospital operator in Thailand and is benefiting from the return of health tourism and constructive changes in Thailand’s insurance market. Ultratech’s cement business is heavily geared towards consumption and general economic activity in India, where real GDP on consensus is north of 6% for the next few years. There are relatively high barriers to entry in many of Ultratech’s markets and we believe the company is at an accessible entry point for its potential growth. Innovent is a world-class biopharmaceutical company that develops, manufactures and commercializes high-quality, innovative medicines for the treatment of cancer, autoimmune metabolic and other major diseases. It also has an emerging business in diabetes and obesity that may have potential.
We exited seven positions in the quarter. They included Petrobras in Brazil, Qatar National Bank and BIM Birlesik Magazalar in Turkey. With Petrobras, the combination of high oil prices and a more meddlesome administration may constrain the potential upside to the stock. With QNB, we exited a bank that has not been positively geared to Qatar’s economic cycle, as we had expected. In the case of BIM, a Turkish discount retailer, the stock had done well and we exited as the Turkey election approached. We don’t know how the election will turn out but multiple potential policy outcomes could be challenging for Turkish consumers and the currency.
Outlook:
In our conversations with companies, few have strong predictions about what lies ahead for the world economy or in important political contests. But few are seeing meaningful stresses to their businesses from macro issues and most are continuing to invest for the future. These include companies in the whole range of industries we study, from mining to energy to consumer to finance. Our focus remains on good companies—those which can succeed in a variety of macroeconomic and political environments.
Top 10 holdings as of March 31, 2023. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MEGMX as of 03/31/2023
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 emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.