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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

-6.40%

YTD Return

(as of 09/21/2023)

$18.87

NAV

(as of 09/21/2023)

-0.32

1 Day NAV Change

(as of 09/21/2023)

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.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 09/12/1994
Fund Assets $3.32 billion (08/31/2023)
Currency USD
Ticker MAPTX
Cusip 577-130-107
Portfolio Turnover 5.6%
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 1.10%
Net Expense Ratio 1.09%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 08/31/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund - MAPTX
09/12/1994
MAPTX
-7.33% 1.45% -2.73% -6.37% -4.44% -0.23% 4.77% 7.18%
MSCI All Country Asia ex Japan Index
-6.39% 2.21% 2.59% -0.24% -2.60% 1.15% 4.70% 4.05%
As of 06/30/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund - MAPTX
09/12/1994
MAPTX
3.00% -5.33% -1.24% -5.73% 0.40% 0.06% 4.43% 7.28%
MSCI All Country Asia ex Japan Index
2.81% -1.14% 3.19% -0.76% 1.49% 1.25% 4.80% 4.09%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Matthews Pacific Tiger Fund - MAPTX
MAPTX
-20.73% -4.41% 28.83% 10.72% -11.11% 39.96% -0.16% -1.30% 11.79% 3.63%
MSCI All Country Asia ex Japan Index
-19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34%

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 06/30/2023)

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.

Ratings

  • OVERALL
  • out of 48 funds
  • 3 YEAR
  • out of 48 funds
  • 5 YEAR
  • out of 46 funds
  • 10 YEAR
  • out of 33 funds
  • 1 YEAR
  • 4th
  • 35 out of 38 funds
  • 3 YEAR
  • 2nd
  • 17 out of 37 funds
  • 5 YEAR
  • 3rd
  • 26 out of 36 funds
  • 10 YEAR
  • 2nd
  • 9 out of 24 funds
  • SINCE INCEPTION
  • 2nd
  • 2 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

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Co-Manager

Portfolio Characteristics

(as of 06/30/2023)
Fund Benchmark
Number of Positions 51 1,229
Weighted Average Market Cap $126.2 billion $115.7 billion
Active Share 68.1 n.a.
P/E using FY1 estimates 20.5x 13.4x
P/E using FY2 estimates 16.7x 11.6x
Price/Cash Flow 13.3 7.0
Price/Book 3.0 1.6
Return On Equity 17.9 15.1
EPS Growth (3 Yr) 17.2% 18.2%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2023)
-0.87%
Alpha
1.08
Beta
105.15%
Upside Capture
106.82%
Downside Capture
-0.04
Sharpe Ratio
-0.21
Information Ratio
5.18%
Tracking Error
94.65

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 08/31/2023)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 7.5
Samsung Electronics Co., Ltd. Information Technology South Korea 6.2
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.0
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 4.6
Meituan Consumer Discretionary China/Hong Kong 4.0
Central Pattana Public Co., Ltd. Real Estate Thailand 3.4
ICICI Bank, Ltd. Financials India 3.3
PT Bank Central Asia Tbk Financials Indonesia 3.1
CITIC Securities Co., Ltd. Financials China/Hong Kong 2.6
Hong Kong Exchanges & Clearing, Ltd. Financials China/Hong Kong 2.6
TOTAL 42.3

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 06/30/2023)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 24.1 24.2 -0.1
Consumer Discretionary 18.0 14.2 3.8
Financials 17.9 20.9 -3.0
Consumer Staples 8.9 5.2 3.7
Real Estate 8.9 3.4 5.5
Industrials 7.7 7.2 0.5
Communication Services 5.7 9.7 -4.0
Materials 3.4 5.2 -1.8
Utilities 1.9 2.5 -0.6
Health Care 1.3 3.8 -2.5
Energy 0.0 3.7 -3.7
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 43.5 40.5 3.0
Taiwan 16.2 17.8 -1.6
India 16.0 16.8 -0.8
South Korea 10.6 14.1 -3.5
Indonesia 3.0 2.3 0.7
Thailand 3.0 2.2 0.8
Philippines 2.5 0.7 1.8
Vietnam 1.7 0.0 1.7
Singapore 1.3 3.8 -2.5
Malaysia 0.0 1.5 -1.5
Macau 0.0 0.2 -0.2
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) 57.7 58.4 -0.7
Large Cap ($10B-$25B) 22.2 21.3 0.9
Mid Cap ($3B-$10B) 15.6 18.5 -2.9
Small Cap (under $3B) 2.2 1.8 0.4
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 $0.00000 $0.09181 $1.62570 $1.71751 7.7% 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 June 30, 2023

For the first half of 2023, the Matthews Pacific Tiger Fund returned -1.24% (Investor Class) and -1.19% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 3.19% over the same period. For the quarter ending June 30, 2023, the Fund returned -5.33% (Investor Class) and -5.32% (Institutional Class), while the benchmark returned -1.14%.

Market Environment:

The Asian markets have been on a roller coaster largely because of the gyrations in Chinese equities as the post-COVID boost to the local economy is proving to be more gradual than previously expected. China lagged considerably as market participants remained underwhelmed with the pace of China’s recovery which has proven to be more ‘slow and steady’ than a ‘consumption led boom.’ As a result, Chinese equities were one of the worst performing during the quarter, and for the first half of the year. In addition, pessimistic sentiment in China has pushed the Chinese currency to its weakest level since October 2022, and close to its five-year lows versus the U.S. dollar. Contrary to expectations earlier in the year, Taiwanese and South Korean equities outperformed the rest of the region on the back of hopes for a recovery in semiconductor demand, and benign valuations.

Property and consumer stocks were among the weaker sectors year-to-date, largely reflecting the tepid recovery in China. Small caps outperformed large cap as ongoing geopolitical risks continued to push the embedded risk-premium in overseas listed Chinese American Depository Receipts (ADRs), many of which are larger sized stocks. Most of the Asian currencies weakened as rising interest rates spurred the U.S. dollar, while central banks in Asia have largely stopped raises rates.

Performance Contributors and Detractors:

From a country perspective, stock selection in China was the biggest detractor to performance during the quarter, and year-to-date periods, as the portfolio’s consumer related holdings continued their underperformance amid overall macroeconomic concerns on the pace of consumption recovery. However, we believe these companies are well positioned to lead the economic recovery over time given their resilient earnings. Stock selection in the Philippines also detracted from relative performance during the first half. On the other hand, information technology companies in South Korea and Taiwan contributed positively. The positive performance was attributed to the combination of better-than-expected earning and clear prospects in terms of demand as shown in the case of a Taiwan based datacenter component manufacturer. Indian consumer discretionary companies also contributed positively with continued strong earning deliveries.

At the individual holdings level, the top detractors to both relative and absolute performance for the first half of the year came from China, including the leading Chinese duty free shop operator China Tourism Group Duty Free. While the company went through the normalization process of operation after the pandemic, its earning improvement was slower than sales as discounting and inventory management takes time. This can be transitionary adjustment process rather than structural as the company’s market share is intact and management continues to make efforts to improve the company’s product mix. Another notable detractor was the leading food delivery and local service company in China, Meituan. The company executed well during the pandemic and the reopening phase, accelerating its path towards profitability ahead of the management’s original target. However, negative sentiment around the China’s consumption recovery and potential competitive pressure has outweighed, and Meituan’s share price did not react positively.

In contrast, one of the notable contributors was a Taiwanese datacenter component manufacturer Accton Technology. As datacenter upgrades continue, especially from global cloud service providers, Accton has been a beneficiary of secular upgrade demand in switches. As some of the supply chain bottlenecks that delayed the product delivery has been resolved, the company’s earning delivery has been robust. Another contributor during the period was India’s leading jeweler, Titan Company. The company delivered good results last year and, against the expectation of potential growth slow down, Titan continued to deliver robust growth and brand value helped by retail store expansion and continuous category expansion into watches and eyewears.

Notable Portfolio Changes:

The second quarter was a relatively quiet quarter as no major directional shifts were made. We increased the portfolio’s relative concentration in high conviction China names by slowly decreasing the weightings of holdings with less certain growth prospects. With a broad valuation correction in China, we continue to assess new high-quality opportunities. Overall, the biggest active risk in the portfolio is from an overweight to domestic consumption in China. The portfolio remains underweight South Korea reflecting some concerns on the global growth outlook.

Outlook:

Despite the divergence in Asia markets year-to-date performance, Asia equity markets are attractively positioned in terms of relative valuation especially with respect to its earnings prospects. We expect double-digit earnings growth in China and India over next two years. As post COVID activity continues to normalize in China, we believe there will be opportunities for domestically oriented growth. For Taiwan and South Korea, a mix of secular growth opportunities in the technology sector together with cyclicality continue to provide stock picking opportunities. With the U.S. Federal Reserve’s interest rate cycle coming into final stages and a mixed backdrop on global demand, we expect that domestic demand in Asia should show resiliency.

 

View the Fund’s Top 10 holdings as of June 30, 2023. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MAPTX as of 06/30/2023
1YR 3YR 5YR 10YR Since Inception Inception Date
-5.73% 0.40% 0.06% 4.43% 7.28% 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 1.10%
Net Expense Ratio 1.09%

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 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.