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
-2.79%
YTD Return
(as of 04/15/2024)
$18.10
NAV
(as of 04/15/2024)
-0.16
1 Day NAV Change
(as of 04/15/2024)
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 | $1.32 billion (03/31/2024) | |
| Currency | USD | |
| Ticker | MAPTX | |
| Cusip | 577-130-107 | |
| Portfolio Turnover | 14.8% | |
| Benchmark | MSCI All Country Asia ex Japan Index | |
| Geographic Focus | Asia Ex Japan - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan | |
Fees & Expenses
| Gross Expense Ratio | 1.10% | |
| Net Expense Ratio | 1.09% | |
| Objective | Long-term capital appreciation |
| Strategy | Under normal circumstances, the Matthews Pacific Tiger Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia Ex Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. |
| Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
The risks associated with investing in the Fund can be found in the prospectus |
Performance
- Monthly
- Quarterly
- Calendar Year
As of 03/31/2024
As of 03/31/2024
For the years ended December 31st
MSCI AC Asia ex Japan Index since inception value calculated from 08/31/94.
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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 $10,000 Investment Since Inception
(as of 03/31/2024)Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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
(as of 03/31/2024)
CATEGORY: Pacific/Asia ex-Japan Stk
| OVERALL | 2 stars | out of 47 funds |
| 3 YEAR | 2 stars | out of 47 funds |
| 5 YEAR | 1 stars | out of 46 funds |
| 10 YEAR | 3 stars | out of 33 funds |
(as of 03/31/2024)
CATEGORY: Pacific Ex Japan Funds
| 1 YEAR | 4th | 38 out of 39 funds |
| 3 YEAR | 4th | 30 out of 38 funds |
| 5 YEAR | 4th | 36 out of 37 funds |
| 10 YEAR | 3rd | 16 out of 24 funds |
| SINCE INCEPTION | 2nd | 2 out of 4 funds |
Ratings agency calculation methodology
Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.
The Overall Morningstar® Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings.
Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Lipper Analytical Services, Inc., rankings are based on total return, including reinvestment of dividends and capital gains for the stated periods. Funds are assigned a rank within a universe of funds similar in investment objective as determined by Lipper. For the absolute rankings shown the lower the number rank, the better the Fund performed compared to other funds in the classification group. Lipper also calculates a quartile ranking which divides the peer group into quartiles to identify funds of similar quality. Funds in the 1st or 2nd quartile had outperformed the average fund in the peer group while funds in the 3rd or 4th quartile had underperformed.
Portfolio Managers
Sean Taylor
Lead Manager
Sean Taylor
Chief Investment Officer and Portfolio Manager
Sean Taylor is Chief Investment Officer and Portfolio Manager at Matthews. As Chief Investment Officer, Sean oversees the firm’s investment process and investment professionals and sets the research agenda for the investment team. He manages the firm’s Pacific Tiger and Asia ex Japan Total Return Equity Strategies and co-manages the firm’s Emerging Markets Equity and Emerging Markets ex China Strategies. Prior to joining Matthews in October 2023, he was Chief Investment Officer APAC, Global Head of Emerging Markets Equity at DWS Group based in Hong Kong since he joined the company in 2013. From 2004 to 2011, he was an Investment Director at GAM, based in London and Dubai. From 1997 to 2004, he was at Societe Generale as Head of International and Emerging Markets. Sean has 30 years of experience, including more than a decade as CIO. He oversaw a number of emerging markets active strategies, including Latin America, India, China, Brazil, Russia as well as international and global strategies. He received his MBA from Manchester Business School and is a graduate of the Royal Military Academy, Sandhurst.
Inbok Song
Lead Manager
Inbok Song
Portfolio Manager
Inbok Song is a Portfolio Manager at Matthews and manages the firm’s Pacific Tiger and Asia ex Japan Total Return Equity Strategies and co-manages the Emerging Markets Sustainable Future and Asia Innovators Strategies. Prior to rejoining Matthews in 2019, Inbok spent three years at Seafarer Capital Partners as a portfolio manager, the firm’s Director of Research and chief data scientist. Previously she was at Thornburg Investment Management as an associate portfolio manager. From 2007 to 2015, she was at Matthews, most recently as a portfolio manager. From 2005 to 2006, Inbok served as an Analyst and Technology Specialist at T. Stone Corp., a private equity firm in Seoul, South Korea. From 2004 to 2005, she was a research engineer for Samsung SDI in Seoul. Inbok received both a B.A. and Masters in Materials Science and Engineering from Seoul National University. She received a Masters in International Management from the University of London, King’s College, and also an M.A. in Management Science and Engineering, with a concentration in finance from Stanford University. Inbok is fluent in Korean.
Winnie Chwang
Co-Manager
Winnie Chwang
Portfolio Manager
Winnie Chwang is a Portfolio Manager at Matthews and manages the firm’s China Small Companies, China Dividend and China Discovery Strategies and co-manages the China, Pacific Tiger and Asia Dividend Strategies. She joined the firm in 2004 and has built her investment career at the firm. Winnie earned an MBA from the Haas School of Business and received her B.A. in Economics with a minor in Business Administration from the University of California, Berkeley. She is fluent in Mandarin and conversational in Cantonese.
Andrew Mattock, CFA
Co-Manager
Andrew Mattock, CFA
Portfolio Manager
Andrew Mattock is a Portfolio Manager at Matthews and manages the firm’s China, China Small Companies, China A-Share and China Discovery Strategies and co-manages the Pacific Tiger, China Dividend and Emerging Markets Equity Strategies. Prior to joining Matthews in 2015, he was a Fund Manager at Henderson Global Investors for 15 years, first in London and then in Singapore, managing Asia Pacific equities. Andrew holds a Bachelor of Business majoring in Accounting from ACU. He began his career at PricewaterhouseCoopers and qualified as a Chartered Accountant.
Peeyush Mittal, CFA
Co-Manager
Peeyush Mittal, CFA
Portfolio Manager
Peeyush Mittal is a Portfolio Manager at Matthews and manages the firm’s India Strategy and co-manages the Emerging Markets Equity, Emerging Markets ex China, Asia Growth and Pacific Tiger Strategies. Prior to joining the Matthews in 2015, he spent over three years at Franklin Templeton Asset Management India, most recently as a Senior Research Analyst. Previously, he was with Deutsche Asset & Wealth Management New York, from 2009 to 2011, researching U.S. and European stocks in the industrials and materials sectors. Peeyush began his career in 2003 with Scot Forge as an Industrial Engineer, and was responsible for implementing Lean Manufacturing systems on the production shop floor. Peeyush earned his M.B.A from The University of Chicago Booth School of Business. He received a Master of Science in Industrial Engineering from The Ohio State University and received a Bachelor of Technology in Metallurgical Engineering from The Indian Institute of Technology Madras. He is fluent in Hindi.
Jeremy Sutch, CFA
Co-Manager
Jeremy Sutch, CFA
Portfolio Manager
Jeremy Sutch is a Portfolio Manager at Matthews and co-manages the firm’s Emerging Markets Equity, Emerging Markets ex China Equity, Emerging Markets Small Companies, Emerging Markets Discovery, Asia Small Companies, Asia ex Japan Total Return Equity and Pacific Tiger Strategies. Prior to joining Matthews in 2015, he was Director and Global Head of Emerging Companies at Standard Chartered Bank in Hong Kong from 2012 to 2015, responsible for the fundamental analysis of companies in Asia, with a particular focus on small- and mid-capitalization companies. From 2009 to 2012, he was Managing Director at MJP Capital in Hong Kong, which he co-founded. His prior experience has included managing small-cap equities at Indus Capital Advisors and serving as Head of Hong Kong Research for ABN AMRO Asia Securities. Jeremy earned an M.A. in French and History from the University of Edinburgh.
Portfolio Characteristics
(as of 03/31/2024)Sources: Factset Research Systems, Inc.
Risk Metrics (3 Yr Return)
(as of 03/31/2024)-4.53%
Alpha
1.03
Beta
89.54%
Upside Capture
108.51%
Downside Capture
-0.68
Sharpe Ratio
-0.92
Information Ratio
5.00%
Tracking Error
94.10
R²
Fund Risk Metrics are reflective of Investor share class.
Sources: Zephyr StyleADVISOR
Top 10 Holdings
(as of 03/31/2024)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 03/31/2024)- Sector Allocation
- Country Allocation
- Market Cap Exposure
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
Not all countries are included in the benchmark index(es).
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
Explore our Latest Research & Insights
Visit our Glossary of Terms page for definitions and additional information.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI Emerging Markets (EM) Asia Index is a free float-adjusted market capitalization weighted index of the stock markets of China, India, Indonesia, Malaysia, Pakistan, Philippines, South Korea, Taiwan and Thailand. The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The Korea Composite Stock Price Index (KOSPI) is a market capitalization–weighted index of all common stocks listed on the Korea Stock Exchange.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
The MSCI Korea Index is a free float-adjusted market capitalization-weighted index of Korean equities listed in Korea.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
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.
Commentary
Period ended December 31, 2023
For the year ending December 31, 2023, the Matthews Pacific Tiger Fund returned -4.87% (Investor Class) and -4.75% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 6.34% over the same period. For the fourth quarter, the Fund returned 1.85% (Investor Class) and 1.87% (Institutional Class), while the benchmark returned 6.48%.
Market Environment
The environment in 2023 was challenging especially for China. The market in China started with the hope of a strong recovery in the economy. This turned out to be short lived, leading to an adverse backdrop for the rest of the year. Earnings in the China universe adjusted down sequentially during 2023 and together with a challenging external environment, geopolitical tensions and slow policy reactions, this led to a valuation derating in China’s equity market. Elsewhere in the region, India was a strong performer, benefiting from domestic capital flows and sustained earnings delivery after reopening from pandemic lockdowns. Earnings delivery was widespread across several sectors such as financials, consumers and industrials. Though the South Korea and Taiwan markets started with concern over the demand environment and inventory digestion cycle, the technology heavy sectors in both countries performed well with the emergence of secular growth drivers such as data, artificial intelligence (AI) and batteries for electric vehicles (EVs). Therefore, those sectors in the two countries experienced a valuation re-rating.
Performance Contributors and Detractors
At the country level, stock selection in China/Hong Kong detracted the most from total and relative returns in 2023. China’s economic recovery has been weaker-than-expected and this resulted in earnings downgrades across sectors, especially consumer and industrials. Consequently, consumer discretionary stocks were derated, followed by consumer staples both of which affected the portfolio’s stock selection negatively. Stock selection in India and the Philippines also detracted from relative performance. At the sector level, stock selection in consumer discretionary was the largest detractor to relative returns while an overweight and stock selection in consumer staples as well as stock selection in industrials also detracted. On the other hand, stock selection in Taiwan and Indonesia contributed the most to relative returns for the year. At the sector level, information technology (IT) contributed the most to the Fund’s total return for the year.
Among individual holdings, JD.com, China’s leading e-commerce platform company, and pharmaceutical company Wuxi Biologics were notable detractors. Weak consumer sentiment as well as increasing competition in the e-commerce industry slowed down JD’s sales growth meaningfully. While the company achieved good cost controls leading to faster earnings growth, its slower revenue growth materially dragged valuation multiples down. Wuxi Biologics, which provides contract development and manufacturing services, experienced a slowdown of its earnings growth due to insufficient COVID-related manufacturing as well as slower development projects from the tight biotechnology funding environment.
Conversely, Accton Technology, a networking equipment provider in Taiwan, and Titan Company, India’s leading jeweler, were two notable contributors to the Fund’s overall performance. As supply disruption normalized into 2023, Accton Technology started to deliver its orders on schedule. Additionally, demand for its service has been robust due to customer’s datacenter upgrades. Titan Company continued to deliver resilient earnings growth and brand value, a reflection of the robust consumption environment in India. While Titan’s valuation has been at the high end of the range compared to other consumer companies in India, its category expansion and consistent execution has provided strong earnings visibility.
Notable Portfolio Changes
We continue to seek to capture the growing investment opportunities in Asia while assessing risks, especially when they are reflected in valuations. We added new positions from India given the country’s growth prospects remain robust and more structural, leading to broader investment opportunities. Tata Consumer Products, a leading beverage-focused fast-moving consumer goods company, is a good example of the increasing demand for premium products in India. We also added Taiwanese company ASE Technology, a globally leading back-end packing supplier as secular demand for AI and data processing-related semiconductors continue to require high-end manufacturing.
Outlook
Ambiguities remain in the outlook for the global economy including Asian countries. China continues to deal with challenges in its property market and weak consumer sentiment. South Korea and Taiwan are going through the uncertainties of global demand and the inventory digestion cycle. In India, a long-subdued CapEx cycle has restarted, and overall consumer demand has recovered though there are still urban and rural consumer divergences. At the global macro level, the U.S. Federal Reserve’s interest rate policy remains on an uncertain path and related changes in market expectations are causing volatility in equities.
However, Asia ex Japan valuations are favorably positioned at around 12 x FY24 earnings with EPS growth expected to be over 19% for the year. While earnings downgrade risks remain, we believe that, fundamentally, the Asia ex Japan region has many companies with earnings generation power. We continue to focus on keeping the portfolio invested in companies demonstrating durable earnings growth combined with reasonable valuations in this uncertain environment.
View the Fund’s Top 10 holdings as of December 31, 2023. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MAPTX as of 03/31/2024
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
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.