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Our Investment Approach

The foundation of our investment approach is built on developing deep insights through fundamental research, identifying the most attractive long-term investment opportunities.

Investment Philosophy

To best serve our clients, we seek alpha through active portfolio management and in-depth, on-the-ground fundamental research to identify the most compelling opportunities while aiming to minimize downside risk. This is how we built our successful track record in Asia and now underpins our global emerging markets strategies.

Our belief in the long-term growth of Asia was forged through decades of volatility, from the Asian Financial Crisis in the late 1990s and SARS to geopolitical scares, China’s equity bubble burst, and the 2008 Global Financial Crisis. These challenges have tested, and ultimately strengthened, Matthews’ unique investment philosophy.

Long-term Focus

We believe that to consistently capitalize on opportunities in Asia and Emerging Markets requires patience, conviction and a research-driven approach. Our insights are built through in-person, on-the-ground fundamental research, to develop our understanding of the economic forces driving growth in these markets into the businesses that are best positioned to thrive.

Active Management

Realizing the true potential for Asia and Emerging Markets calls for active portfolio management, rather than a passive, index-based approach. Active management is one way to generate alpha—the potential for excess return. Market-cap-weighted indices often reflect yesterday’s winning companies, overlooking tomorrow’s biggest opportunities.

We draw on our 30-plus years of experience in Asian equities to actively manage portfolios, building insights from the country level down to individual businesses.

We dig deep into lesser-known businesses, including assessing financials, capital allocations, incentives, ownership, and governance—to identify long-term opportunities that others miss. The result: portfolios that differ substantially from benchmarks.

Fundamental Research

In evaluating a prospective portfolio company, we seek solid companies with sound fundamentals, strong balance sheets, viable business models and the ability to maintain reasonable growth rates over the long term. Consistent with our multi-year orientation, we assess the value of the business as a whole, looking through the lens of future growth potential. When we engage with a company, we seek to assess not just its prospects, but a broader understanding of the entire ecosystem in which it operates.

A typical on-site company visit includes meetings with the CEO and decision-makers of a company, plus trips to their production facilities and warehouses. Our on-the-ground analysis extends to supply chain partners, competitors, and industry and economic experts. To gain a first-hand perspective on various segments of the economy, we also meet with local individuals including real estate professionals, trade association representatives, and government and central bank officials.

Our long-term approach paired with our extensive, on-the-ground research gives us conviction in the companies we invest and provides us with the confidence to manage portfolios through all market cycles.

Risk Management

Asia and Emerging Markets are inherently volatile—which is why risk management is central to how we operate. Over our three decades of experience in these markets, we’ve developed a disciplined, tested framework for managing risk across portfolios and the firm. Our Risk and Compliance Department is integral to our process, overseeing both investment and enterprise risk. It’s led by our Global Head of Risk, Compliance and Operations, who reports directly to the firm’s CEO.

We continually monitor portfolio risks at both the security and macro levels. Our investment process places emphasis on business risk, which we believe is the most important. If significant concerns arise, we re-examine affected holdings. We also revisit current positions when new ideas offer more compelling risk/return trade-offs and adjust our positions accordingly.