Look to the Future With Your Emerging Markets Exposure
Investing in emerging markets is about looking forward. Representing nearly 80% of global growth and access to a huge and growing middle class, emerging markets equities can offer investors the biggest potential for long-term growth. As active bottom-up investors, we see three structural growth drivers shaping new opportunities:
COVID-19, conflict and supply-chain shocks have impacted trade around the world.
Some emerging markets, like India and Vietnam, are key beneficiaries from reassessed global supply chains, whereas a focus on re- or near-shoring drives opportunities in China and Mexico.
Robust R&D investments have helped emerging market companies get ahead in areas like technology, communications, financial services and e-commerce.
Increasingly these companies are targeting products and services toward their home audiences as well as abroad.
As the world moves toward a low-carbon and sustainable future, emerging markets need to effect major economic shifts.
From renewable energy, transportation, industry, e-commerce and finance, companies that drive sustainability enjoy a tailwind of secular growth.
Our Active Approach Is Key to Managing Risk and Return
In our experience, active security selection is key to generating returns and managing risks in emerging markets. Based on decades of investing in complex and dynamic markets, our approach is fundamental, company-led and long-term in nature.
Taking inherent volatility into account, we look for companies that can survive and thrive across a full market cycle. These include balance sheets appropriate to the nature of the business, strong competitive positions, and management teams who work on behalf of all shareholders.
Proprietary Sustainability Research for Emerging Markets
We believe the differences in disclosure and data availability between emerging markets and developed markets present significant opportunities for investors willing to sift through the noise.
Our proprietary ESG research helps us to identify poor governance practices, controversial behaviour, and controversial products using ESG data from various sources of information, including third-party ESG research and Matthews' own analysis. Our research also broadens the opportunity set by including companies that may not yet be rated by third-party providers, especially among small- and mid-cap companies in emerging and frontier markets.
Identify poor governance practices, controversial behavior and controversial products
Broaden the opportunity set through own analysis of unrated companies
Actively engage in open and constructive dialogue where appropriate
We Search Far and Wide for Exceptional Opportunities
Our portfolio teams leverage the full resources and expertise of the broader investment team to find attractive opportunities. Research trips to emerging markets countries and companies, as well as management discussions are a rich source of idea generation and form an essential part of the investment process.
Over our 30 years of investing in these markets, we have created deep connections with companies and their management teams. In our experience it’s only by looking at businesses close-up that we can identify quality companies capable of delivering sustainable growth through market cycles.
Experienced investment team with local knowledge
Proven investment process based on fundamental research and company visits
Active, bottom-up approach, macro-aware
Three Ways to Access Emerging Markets Growth
We recognize that investors seek diverse and differentiated approaches to the region. Our three portfolios are all based on the same active, bottom-up stock-picking approach, but offer distinct exposure to the region:
MEM
Emerging Markets Active Equity ETF
A core, quality-growth all-cap portfolio of 30 to 70 companies with a focus on firms that can serve the growing needs of domestic consumers within their market.
MSMLX
Emerging Markets Small Companies Fund
This high conviction Fund seeks to invest in innovative smaller companies early in their lifecycle and hold them until their growth slows.
MASGX
Emerging Markets Sustainable Future Fund*
A core, all-cap portfolio that enables investors to get greater exposure to emerging market growth companies that seek to contribute to a sustainable future.
* Formerly known as the Matthews Asia ESG Fund
The Fund's consideration of ESG factors in making its investment decisions materially impact the investment performance of the Fund. These and other risks associated with investing in the Fund can be found in the Prospectus.