TOP
Growth

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

-1.98%

YTD Return

(as of 05/12/2021)

$34.25

Price

(as of 05/12/2021)

$9.40 billion

Fund Assets

(as of 04/30/2021)

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.

The risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 09/12/1994
Fund Assets $9.40 billion (04/30/2021)
Currency USD
Ticker MAPTX
Cusip 577-130-107
Portfolio Turnover 38.1%
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 1.08%
Net Expense Ratio 1.06%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 04/30/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund
MAPTX
1.21% -1.13% 2.80% 54.73% 10.08% 12.48% 7.98% 9.19% 09/12/1994
MSCI All Country Asia ex Japan Index
2.49% 1.15% 5.31% 48.39% 9.83% 14.88% 6.83% 5.54%
As of 03/31/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund
MAPTX
-2.72% 1.57% 1.57% 65.31% 9.10% 12.42% 8.33% 9.17% 09/12/1994
MSCI All Country Asia ex Japan Index
-2.52% 2.75% 2.75% 57.77% 9.20% 14.12% 6.96% 5.46%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Pacific Tiger Fund
MAPTX
28.83% 10.72% -11.11% 39.96% -0.16% -1.30% 11.79% 3.63% 21.00% -11.41%
MSCI All Country Asia ex Japan Index
25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34% 22.70% -17.07%

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 03/31/2021)

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 56 funds
  • 3 YEAR
  • out of 56 funds
  • 5 YEAR
  • out of 50 funds
  • 10 YEAR
  • out of 29 funds
  • 1 YEAR
  • 2nd
  • 16 out of 42 funds
  • 3 YEAR
  • 2nd
  • 21 out of 41 funds
  • 5 YEAR
  • 3rd
  • 25 out of 35 funds
  • 10 YEAR
  • 2nd
  • 8 out of 24 funds
  • SINCE INCEPTION
  • 1st
  • 1 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

Portfolio Characteristics

(as of 03/31/2021)
70
Number of Securities

Source: BNY Mellon Investment Servicing (US) Inc.

22.2x
P/E using FY1 estimates
19.5x
P/E using FY2 estimates
$171.5 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 04/30/2021)
Name Sector Country % Net Assets
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.7
Samsung Electronics Co., Ltd. Information Technology South Korea 5.5
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 5.3
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 4.1
MediaTek, Inc. Information Technology Taiwan 3.0
AIA Group, Ltd. Financials China/Hong Kong 2.8
Hong Kong Exchanges & Clearing, Ltd. Financials China/Hong Kong 2.2
ENN Energy Holdings, Ltd. Utilities China/Hong Kong 2.1
Tata Power Co., Ltd. Utilities India 2.0
Wuxi Biologics Cayman, Inc. Health Care China/Hong Kong 1.9
TOTAL 34.6

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 03/31/2021)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 24.9 23.5 1.4
Consumer Discretionary 14.0 18.2 -4.2
Communication Services 13.3 11.6 1.7
Financials 11.8 18.3 -6.5
Consumer Staples 9.7 4.8 4.9
Real Estate 6.7 4.1 2.6
Industrials 5.4 5.4 0.0
Utilities 5.0 2.2 2.8
Health Care 3.5 4.7 -1.2
Materials 2.6 4.5 -1.9
Energy 0.0 2.5 -2.5
Cash and Other Assets, Less Liabilities 3.2 0.0 3.2

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 45.8 50.4 -4.6
Taiwan 14.7 15.4 -0.7
South Korea 14.5 15.0 -0.5
India 11.1 10.9 0.2
Singapore 3.5 2.5 1.0
Indonesia 2.3 1.4 0.9
Thailand 2.2 2.1 0.1
Philippines 1.8 0.7 1.1
Vietnam 0.9 0.0 0.9
Malaysia 0.0 1.5 -1.5
Cash and Other Assets, Less Liabilities 3.2 0.0 3.2

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 54.5 64.8 -10.3
Large Cap ($10B-$25B) 17.4 19.1 -1.7
Mid Cap ($3B-$10B) 22.6 15.1 7.5
Small Cap (under $3B) 2.4 1.0 1.4
Cash and Other Assets, Less Liabilities 3.2 0.0 3.2

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)
12/15/2020 12/16/2020 $0.08242 $0.42745 $1.49657 $2.00644 6.0% 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 March 31, 2021

For the quarter ending March 31, 2021, the Matthews Pacific Tiger Fund returned 1.57% (Investor Class) and 1.60% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 2.75%.

Market Environment:

Asia’s equity markets started the year on a strong note continuing the trends experienced last year. However, the initial gains were nearly eroded as fears of a spike in inflation triggered a rotation among Asian equities from growth stocks toward more value-oriented stocks.

The rotation was driven by the relative attractiveness of valuations in sectors that were severely affected by the pandemic last year, as investors expect that there will be earnings recovery to be had. In particular, growth companies in China that experienced significant run ups in valuations last year saw their earlier gains reversed. Furthermore, investors continue to try to assess the potential impact of some regulatory proposals in China that seek to balance free flow of data and consumer privacy. Consumer discretionary was one of the weakest sectors during the sell-off as it is vulnerable to both these trends.

On a positive note, Taiwan’s equity markets held up well in the quarter. With significant exposure to the semiconductor technology, Taiwan benefited from continued strong demand for computer chips. As the global economy continues to get back on its feet, the outlook for semiconductors remains favorable. In addition, some of the worst performing markets, including Thailand, are starting to attract investor attention as the prospects for tourism is starting to look a bit better. With the economic recovery starting to gain pace and breadth, many small-cap companies may be well placed to benefit from more favorable economic conditions. Consequently, small caps outperformed large caps quite handily.

Performance Contributors and Detractors:

Stock selection in South Korea was a contributor to performance. Container shipping company HMM Co., Internet services provider Naver Corp. and beauty product manufacturer Amore Pacific are three examples of positive stock selection in South Korea in the quarter. HMM is a new position and Amore Pacific is a newly re-initiated position. Naver remains a steady performer with attractive long-term growth potential. Internet services in general got a boost from the pandemic and Naver’s e-commerce business continued to demonstrate strong market share gain.

On the other hand, stock selection in China was a detractor. Solar producer Xinyi Solar Holdings, power semiconductor producer StarPower Semiconductor Ltd. and health care company Jiangsu Hengrui Medicine each saw share price weakness in the quarter. In the case of Xinyi and StarPower, we have added to the positions as the risk-reward looks more favorable, and we look to build the weight in the portfolio. We exited Jiangsu Hengrui Medicine.

Notable Portfolio Changes:

During the quarter, we initiated a new position in Shandong Sinocera Functional Material Co., a Chinese specialty chemical company. In addition to making chemicals that are used for key components of autos and electric vehicles (EVs), the company also makes materials that go in to dental and orthopedic materials. Shandong Sinocera is the type of specialized company that might be more common in mature markets such as South Korea or Japan but we are increasingly starting to see this type of innovative company emerge out of China. While the company is classified in materials sector, the underlying exposure of the company’s business model is toward consumer-focused areas such as health care, which are very hard to get exposure to in China without paying high premiums on the valuations.

As mentioned earlier, South Korean container shipping company HMM was a new addition in the quarter. HMM is a unique business turnaround case as they went through cost rationalization exercise in recent years while going through the industry’s consolidation. HMM has emerged as a leading shipping company in South Korea and we believe that there will be more improvement to be delivered for the shareholders. Additionally, strong demand for physical goods during the pandemic, together with reduced supply of the shipping vessels, accelerated its earnings improvement. We also reinitiated a position in South Korean cosmetics company Amore Pacific in the fourth quarter of 2020, and continued to build the position in the first quarter of 2021. This consumer focused company is continuing to restructure, with improvements to the management team and a focus on contemporizing their brands to better meet the needs of sophisticated consumers.

Outlook:

Across the region, we see a return to normalcy, leading to better economic prospects for businesses. Parts of Asia have progressed from recovery to expansion, while others like India and Indonesia are still getting back to pre-pandemic levels of activity. Some of the economic indicators in India are pointing to a steady improvement but we await confirmation of the trend in stronger credit activity.

While there are some signs of an uptick in inflation, it remains to be seen if these pressures will persist. Some of the inflationary pressures may have been driven by supply chain disruption and, hence may be shorter-term in nature. Major central banks in Asia have opted to leave interest rates largely unchanged in the quarter.

There is some concern that Asian economies may suffer a liquidity crunch as interest rates start to rise in the U.S. It is worth noting that a change to interest rates is being driven by favorable growth expectations. Furthermore, compared to prior periods of an increase in interest rates, foreign exchange reserves have grown noticeably and current account deficits have switched from deficit to surplus for countries like India. Both India and Indonesia continue to receive inflows into equities from foreign institutional investors during recent periods of volatility.

Looking ahead, earnings growth, liquidity and valuations all appear supportive of Asia’s equity markets. We expect strong corporate earnings across Asia in 2021 as the global recovery continues to expand. Across the region we see sufficient liquidity. While we have not seen as much uptake in credit, any pick up in credit issuance should further support economic growth. And valuations, which started the year slightly elevated in parts of the market, have become more reasonable.

 

As of 3/31/21, the securities mentioned comprised the Matthews Pacific Tiger Fund in the following percentages: HMM Co. Ltd, 1.6%; Naver Corp., 1.9%; Amore Pacific Corp., 1.2%; Xinyi Solar Holdings Ltd., 1.1%; StarPower Semiconductor Ltd., 1.0%; Shandong Sinocera Functional Material Co., 1.0%. The Fund held no positions in Jiangsu Hengrui Medicine. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MAPTX as of 03/31/2021
1YR 3YR 5YR 10YR Since Inception Inception Date
65.31% 9.10% 12.42% 8.33% 9.17% 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 1.08%
Net Expense Ratio 1.06%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2022. 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.