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What is active share and why is it so important to Asia

Featuring Robert Horrocks, PhD, Chief Investment Officer

Asia: An Overlooked Opportunity Cover Photo

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Our guide for long-term investors to help demystify and evaluate the benefits of making a meaningful allocation to Asian investments.

Asia stands apart

While the rest of the world continues to struggle with low levels of economic growth, Asia stands apart

Projected GDP growth in 2019




Latin America





Source: World Economic Outlook, 
January 2019 estimates

Asia will account for:

Half of 
global GDP by 2050

Source: The Economist, 2015

Half of the 
world's population by 2050

Source: United Nations, 2017

Two-thirds of all 
middle-class spending by 2030

Source: Global Economy and 
Development at Brookings, February 2017

Missing the opportunity:
Too little Asia

Exposure to Asia has typically come from benchmarks which underrepresent the region


A typical investor portfolio with a 
35% international allocation…


would have a 6% allocation to 
Asia ex Japan if benchmarked 
to MSCI ACWI ex U.S.*


… and only 2% if benchmarked to 

Source:, August 14, 2018

  99% Less than 1% of the mutual fund market in the US is dedicated to Asia

Source: Strategic Insight, December 31, 2018

Missing the opportunity:
The wrong kind of Asia

Tech Travel Health care E-Commerce Banks Exporters Heavy industry

Banks, Exporters, Heavy Industry

Indices are heavily weighted in older
parts of the economy…

Tech, Travel, Health, E-Commerce

… neglecting consumption and services that
represent a growing part of the Asian economy

The right kind of Asia

Consumer spending

Rising consumption rates across Asia are expected to lead to a sharp increase in discretionary spending on non-essential purchases

Asia Pacific Region

Global consumption projected growth rates: 

0% U.S.
0 Latin America
0 Europe
0% Asia Pacific

Source: Mckinsey & Company: The global consumers to watch, April 2016


Rising discretionary spending: Projected annual growth rate, 2010-2020

Discretionary spending
Personal items, recreation, education, transport, communications
Apparel, health care, household products


Source: Mckinsey & Company, Meet the Chinese consumers of 2020, March 2012

Health care

Asia is expected to experience a sharp increase in health care spending, with countries 
like India leading the pack

Asia Pacific Region

Expected annual average increase in health care


Asia Pacific region


North America

Source: Deloitte Global Healthcare Outlook, 2018



16% Growth rate for 
India’s healthcare spending 
projection (2008‐2022)

US billion

$100 US billion Indian 
biotechnology including 
biopharmaceuticals market 
size is expected to grow to 
US$100 billion by 2025

Source: India Brand Equity Foundation, 2018


Rising personal wealth and spending on leisure are increasing intra Asia travel


South KoreaChinaIndiaJapanPhilippinesIndonesiaSingaporeMalaysiaThailandHong KongTaiwanVietnam

Source: Japan National Tourism Organization

Japan 0.0
Japan drew 20.9 million 
overseas visitors in 2017
2010 x0 This is more than double the 8.6 million overseas visitors it saw in 2010
Flights 0.0
Total visitors came 
from Asian countries


Smartphone ownership is on the rise across the continent, leading to a huge opportunity 
for tech-related industries

Asia Pacific Region

Internet users who own a smartphone (Q3 2016)

Asia Pacific Europe North America

Source: Emarketer

Spending $0
US trillion
Global e-commerce 
spending from Asia in 2016
2012 $0.0
US trillion
By 2020, that number 
is expected to grow to 
US$2.7 trillion…
Global eCommerce 0 … representing an 
estimated 60% of global
e-commerce spending

Discover the 
power of Asia

At Matthews Asia, we believe that many investors are under-allocated to the region and are therefore missing out on attractive investment opportunities.

For over 25 years, we have pursued an active, fundamental approach to investing in Asia, resulting in portfolios with an average active share of 85% and holdings that we believe represent a better exposure to the future growth of the region.

Put the power of Asia in your portfolio with Matthews Asia.