Matthews Asia Launches New Article 9 “Asia Sustainable Future Fund”
Matthews Asia today announces the launch of the Matthews Asia Sustainable Future Fund, its first Article 9 UCITS strategy under SFDR.
- Fund is Matthews Asia’s first UCITS fund classified as Article 9 under the Sustainable Finance Disclosure Regulation (“SFDR")
- Five further UCITS funds are categorized as Article 8
London, July 21, 2022 — Matthews Asia today announces the launch of the Matthews Asia Sustainable Future Fund, its first Article 9 UCITS strategy under SFDR (Class I Acc. USD ISIN: LU2459556697; Class I Acc. GBP ISIN: LU2459556770).
The Fund seeks to generate long-term capital appreciation by investing in companies that contribute to a sustainable future and are addressing global environment and social challenges while following good governance principals. Companies are evaluated through a sustainable investment framework, with a focus on their contribution to, or potential future contribution to, positive social and environmental outcomes. Positive outcomes pursued by companies in the Fund include:
- Climate change mitigation and adaptation
- Clean environment
- Sustainable production and consumption
- Health and well-being
- Human capital development, inclusive development or enablement of sustainable development
For investors building sustainable portfolios, Matthews Asia believes that it is critical to include a dedicated allocation to Asia. The region is the epicentre of many global sustainability challenges and solutions, such as climate change, poverty alleviation, access to affordable health care and housing, and financial inclusion. As such, Asia now has a deep universe of both domestic and global leaders that are addressing key sustainability challenges. In Matthews Asia’s view, investing in Asia through a sustainability lens has the potential not only to generate attractive long-term returns but also to drive positive social and environmental outcomes at scale.
The Matthews Asia Sustainable Future Fund follows a similar active investment approach as the Matthews Asia ESG Fund, which has been available to investors in the U.S. since 2015. Both Funds are managed by Vivek Tanneeru, Lead Manager, and supported by Kathlyn Collins, Analyst and Head of ESG at Matthews Asia.
Vivek Tanneeru, Lead Manager, said: “Asia is an extraordinarily diverse region and offers a deep universe of sustainable investment opportunities across frontier, emerging and developed markets. However, ESG research and rating providers have yet to adequately cover this universe, particularly when it comes to small and mid-cap companies and what is covered often fails to reflect local intricacies and context.
With a 30-year heritage in Asia, we have a deep understanding of this investment universe and our experience managing an outcomes-focused portfolio over the past seven years has demonstrated our ability to find overlooked companies that are helping to solve critical environmental and social challenges, while also generating attractive investment returns.
The Matthews Asia Sustainable Future Fund also looks to engage with companies in order to encourage sustainable practices that will help shape the world of tomorrow on topics such as climate risk disclosure, health and safety standards, the level of independent directors on boards, and gender diversity on boards.”
Jonathan Schuman, Global Head of Distribution, said: “We have seen a structural shift in investor priorities in recent years, with sustainability and outcome-based objectives becoming an important requirement when making investment decisions. We are therefore pleased to launch the Matthews Asia Sustainable Future Fund for our global clients, our first SFDR Article 9 strategy, and a strategy that is managed with a similar approach as our existing Asia ESG strategy in the United States. Along with the recategorisation of several of our existing UCITS funds to Article 8, this Fund launch underscores our commitment to providing sustainable investment solutions to clients and continuing our history of being responsible stewards of investor capital. We are excited to be able to make these strategies available to a wider, sustainability-conscious investor community.”
Five Matthews Asia UCITS funds categorized as Article 8
Matthews Asia also announces that five of its existing UCITS funds have been categorised as Article 8 funds under SFRD regulations, including the recently launched Matthews China A-Shares Fund:
- Matthews Asia ex Japan Dividend Fund
- Matthews Pacific Tiger Fund
- Matthews Japan Fund
- Matthews China Fund
- Matthews China A-shares Fund
Matthews Asia Sustainable Future Fund adopts the following screening process:
- Activity-based screening excludes direct investment in companies with exposure to weapons, tobacco, adult entertainment, arctic oil, gas exploration and extraction, shale energy, oil sands extraction methods (fracking), thermal coal extraction or that generate significant revenue from palm oil production and distribution.
- A norms-based screening process excludes companies in severe breach or non-compliance to any of the 10 principles of the UN Global Compact and the OECD Guideline for Multinational Enterprises.
- Each investment is also screened against the Principal Adverse Impacts (PAI’s) indicators under the EU Sustainable Finance Disclosure Regulation (SFDR). PAIs can be defined as negative material, or potentially negative material effects on sustainability factors that result from or are directly related to investment choices or advice performed by a legal entity. Examples can include GHG emissions and carbon footprint.
- Matthews Asia assesses the contribution of each investment to its positive outcome-oriented environmental and social focus areas: climate change mitigation and adaptation, clean environment, circular economy, or sustainable production and consumption; health and well-being, human capital development, inclusive development or enablement of sustainable development; and/or good governance practices that demonstrate a strong commitment to integration of ESG principles.
Article 8 Matthews Asia UCITS funds will continue to apply ESG integration
- The investment team applies a robust ESG framework to the portfolio, with an exclusion policy applied for certain business activities and compliance with global norms, as well as enhanced reporting on EU taxonomy eligibility and alignment and Principal Adverse Impact indicators.
- The portfolios commit to being less carbon intensive than the respective benchmark.
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About Matthews Asia
Since 1991, we have focused our efforts and expertise within the Asia and the emerging markets, investing through a variety of market environments. As an independent, privately owned firm, Matthews Asia is the largest dedicated Asia investment specialist in the United States. With approximately US$17.4 billion in assets under management as of June 30, 2022, Matthews Asia employs a bottom-up, fundamental investment philosophy, with a focus on long-term investment performance. For more information, please visit matthewsasia.com.
This announcement is for informational purposes only and does not, in any way, constitute investment advice or an offer to sell or a solicitation of an offer to buy any security or product mentioned herein. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation.
This release does not constitute or contain an offer, solicitation, recommendation or investment advice with respect to the purchase of the Funds described herein or any security and such document has not been approved in any jurisdiction. Prospective investors should carefully review the information contained in the prospectus and any related offering document and consult their professional legal, tax and financial advisers as to the suitability of any investment in light of their particular circumstances and applicable citizenship, residence or domicile, including any tax or foreign exchange control restrictions. No securities commission or regulatory authority has in any way passed upon the merits of an investment in the Funds or the accuracy or adequacy of this information or the material contained herein or otherwise. Neither the prospectus nor any related offering document has been approved in any jurisdiction where the Funds have not been registered for public offer and sale. This information is not, and under no circumstances is to be construed as, a prospectus, a public offering or an offering memorandum as defined under applicable securities legislation. Application for shares may only be made by way of the Funds’ most recent prospectus which is available from Matthews International Capital Management, LLC. The Funds’ shares may not be sold to citizens or residents of the United States or in any other state, country or jurisdiction where it would be unlawful to offer, solicit an offer for, or sell the shares.
Matthews Asia is the brand for Matthews International Capital Management, LLC and its direct and indirect subsidiaries. Matthews International Capital Management, LLC is the Investment Manager to the Matthews Asia Funds, and is a U.S.-based investment adviser registered with the U.S. Securities and Exchange Commission who has not represented and will not represent that it is otherwise registered with any other regulator or regulatory body.
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