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Catalysts that May Propel Asia’s Growth Stocks

Portfolio Manager Sharat Shroff, CFA, reviews the prospects for growth investors after the recent market style rotation. He shares his views on which sectors and countries may offer opportunity and discusses his approach for adjusting the Matthews Pacific Tiger Strategy portfolio.

  • Update on equity performance and valuation (00:35m)
  • How far have markets rotated from growth to value (02:00m)
  • What sectors are fairly priced given high earnings expectations for 2021 (04:20m)
  • What catalysts are necessary for markets to trade higher at this point (06:30m)
  • What has driven weakness in Chinese markets this year (10:00m)
  • How do you explain the resilience of Indian stocks year to date and what are their prospects (12:40)
  • How he adjusted the Pacific Tiger portfolio to market conditions this year (14:40)
  • Are innovative sectors still attractive if the cyclical recovery trade continues (19:40)

As of 3/31/2021 the Matthews Pacific Tiger Fund held 0.8% in Ashok Leyland and 1.9% in NAVER.

Definitions:

Earnings Before Interest and Taxation, Depreciation and Amortization (EBITDA): Earnings Before Interest and Taxation, Depreciation and Amortization (EBITDA) is a measure of a company’s earnings before considering the financing of that company (the share of equity capital and debt employed), and disregarding potential depreciation and amortization policies, which can be very different. EBITDA allows like-for-like comparisons between different companies’ performance.

Base effect: The base effect is the effect that the choice of a reference point when comparing two data points can have on the result of the comparison.

Book value: Book value is equal to the cost of carrying an asset on a company's balance sheet, and firms calculate it netting the asset against its accumulated depreciation. As a result, book value can also be thought of as the net asset value (NAV) of a company, calculated as its total assets minus intangible assets (patents, goodwill) and liabilities.

Forward Price-to-Earnings (P/E): Forward Price-to-Earnings (Forward P/E) is a measure of the price-to-earnings ratio (P/E) using forecasted earnings for the P/E calculation. While the earnings used are just an estimate and are not as reliable as current earnings data, there still may be benefit in estimated P/E analysis. The forecasted earnings used in the formula can either be for the next 12 months or for the next full-year fiscal period.

Index is for comparative purposes only and it is not possible to invest directly in an index. Index Definitions

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View the most recent holdings under each Fund's Composition page. Current and future portfolio holdings are subject to change and risk. 

Risk: 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. 


Performance 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. For the Fund's most recent month-end performance, please click here.

Visit our Glossary of Terms page for definitions and additional information.

There is no guarantee that a Fund or company will pay or continue to increase dividends.

Past performance is no guarantee of future results. The views and opinions in this 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.

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. Portfolio characteristics refer to the underlying securities in the Fund's portfolio and does not represent fund performance.

 

IMPORTANT INFORMATION

The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. Investment involves risk. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in small- and mid-size companies is more risky and volatile than investing in large companies as they may be more volatile and less liquid than larger companies. Past performance is no guarantee of future results. 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. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information.