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Growth

Matthews Pacific Tiger Fund

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

30/04/2010

Inception Date

7.91%

YTD Return (USD)

(as of 26/01/2021)

$27.02

Price (USD)

(as of 26/01/2021)

$468.20 million

Fund Assets

(as of 31/12/2020)

Objective

Seeks to achieve long term capital appreciation.

Strategy

The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in equities of companies located in Asia, and may invest the remainder of its net assets in other permitted assets on a worldwide basis. For the purpose of this policy, Asia includes China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.

Risks

The value of an investment in the Fund can go down as well as up and possible loss of principal is a risk of investing. Investments in international and emerging market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. The Fund invests in holdings denominated in foreign currencies, and is exposed to the risk that the value of the foreign currency will increase or decrease. The Fund invests primarily in equity securities, which may result in increased volatility.

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

Fund Facts
Inception Date 30/04/2010
Fund Assets $468.20 million (31/12/2020)
Base Currency USD
ISIN: LU0491816475 (USD) LU0594555756 (GBP) LU0491816129 (EUR) LU1576347550 (JPY)
Bloomberg Symbol MATAPTI:LX (USD) MATAPGI:LX (GBP) MAPTFIE:LX (EUR) MPACTIJ:LX (JPY)
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia Ex Japan: Consists of all countries and markets in Asia, excluding Japan but including all developed, emerging and frontier countries and markets in Asia
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2020 1.12% ( USD ) 1.12% ( GBP ) 1.25% ( EUR ) 1.11% ( JPY )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
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As of 31/12/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund (USD)
9.87% 22.03% 30.48% 30.48% 9.01% 12.49% 7.92% 8.98% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 7.85%
Matthews Pacific Tiger Fund (GBP)
7.10% 14.52% 25.96% 25.96% 8.61% 14.34% n.a. 10.88% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
4.35% 12.23% 21.49% 21.49% 8.09% 15.63% n.a. 9.37%
Matthews Pacific Tiger Fund (JPY)
8.75% 18.95% 23.94% 23.94% 5.85% n.a. n.a. 11.66% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
5.79% 16.09% 19.10% 19.10% 5.36% n.a. n.a. 11.23%
Matthews Pacific Tiger Fund (EUR)
7.17% 16.33% 19.40% 19.40% n.a. n.a. n.a. 12.93% 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
4.45% 13.73% 15.01% 15.01% n.a. n.a. n.a. 11.44%
As of 31/12/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund (USD)
9.87% 22.03% 30.48% 30.48% 9.01% 12.49% 7.92% 8.98% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 7.85%
Matthews Pacific Tiger Fund (GBP)
7.10% 14.52% 25.96% 25.96% 8.61% 14.34% n.a. 10.88% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
4.35% 12.23% 21.49% 21.49% 8.09% 15.63% n.a. 9.37%
Matthews Pacific Tiger Fund (JPY)
8.75% 18.95% 23.94% 23.94% 5.85% n.a. n.a. 11.66% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
5.79% 16.09% 19.10% 19.10% 5.36% n.a. n.a. 11.23%
Matthews Pacific Tiger Fund (EUR)
7.17% 16.33% 19.40% 19.40% n.a. n.a. n.a. 12.93% 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
4.45% 13.73% 15.01% 15.01% n.a. n.a. n.a. 11.44%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Pacific Tiger Fund (USD)
30.48% 11.18% -10.71% 39.47% -0.29% -1.91% 11.22% 4.86% 18.65% -12.40%
MSCI All Country Asia ex Japan Index (USD)
25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34% 22.70% -17.07%
Matthews Pacific Tiger Fund (GBP)
25.96% 7.87% -5.71% 27.14% 19.96% 3.14% 18.00% 2.56% 13.54% n.a.
MSCI All Country Asia ex Japan Index (GBP)
21.49% 13.94% -8.78% 29.78% 26.15% -3.63% 11.65% 1.42% 17.31% n.a.
Matthews Pacific Tiger Fund (JPY)
23.94% 9.79% -12.83% n.a. n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan (JPY)
19.10% 17.39% -16.36% n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Matthews Pacific Tiger Fund (EUR)
19.40% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan Index (EUR)
15.01% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
For the period ended 31/12/2020
Name 2020 2019 2018 2017 2016 Inception Date
Matthews Pacific Tiger Fund (USD)
30.48% 11.18% -10.71% 39.47% -0.29% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Pacific Tiger Fund (GBP)
25.96% 7.87% -5.71% 27.14% 19.96% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
21.49% 13.94% -8.78% 29.78% 26.15%
Matthews Pacific Tiger Fund (JPY)
23.94% 9.79% -12.83% n.a. n.a. 27/03/2017
MSCI All Country Asia ex Japan (JPY)
19.10% 17.39% -16.36% n.a. n.a.
Matthews Pacific Tiger Fund (EUR)
19.40% n.a. n.a. n.a. n.a. 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
15.01% n.a. n.a. n.a. n.a.

Source: Brown Brothers Harriman (Luxembourg) S.C.A.

Since inception performance for share classes with less than one year of history represents actual performance, not annualised. In addition, for share classes less than a year old, Year to Date Return is calculated since inception. Where no past performance is shown there was insufficient data available in that year to provide performance.

Performance details provided are based on a NAV-to-NAV basis with any dividends reinvested, and are net of management fees and other expenses. Performance data has been calculated in the respective currencies stated above, including ongoing charges and excluding subscription fee and redemption fee you might have to pay.

All performance quoted represents past performance and is not indicative of future performance. Investors may not get back the full amount invested. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal.

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.

Portfolio Characteristics

(as of 31/12/2020)
64
Number of Securities

Source: Brown Brothers Harriman (Luxembourg) S.C.A

30.2x
P/E using FY1 estimates
24.2x
P/E using FY2 estimates
$165.9 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 31/12/2020)
Name Sector Country % Net Assets
Samsung Electronics Co., Ltd. Information Technology South Korea 6.6
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 6.0
Tencent Holdings, Ltd. Communication Services China/Hong Kong 6.0
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 5.0
AIA Group, Ltd. Financials China/Hong Kong 4.1
Hong Kong Exchanges & Clearing, Ltd. Financials China/Hong Kong 3.3
China Resources Beer Holdings Co., Ltd. Consumer Staples China/Hong Kong 2.4
LG Chem Ltd. Materials South Korea 2.4
Wuxi Biologics Cayman, Inc. Health Care China/Hong Kong 2.4
ENN Energy Holdings, Ltd. Utilities China/Hong Kong 2.4
TOTAL 40.6

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: Brown Brothers Harriman (Luxembourg) S.C.A

Portfolio Breakdown (%)

(as of 31/12/2020)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 29.3 23.1 6.2
Consumer Discretionary 18.2 19.1 -0.9
Financials 14.9 17.9 -3.0
Consumer Staples 11.9 5.0 6.9
Communication Services 11.0 11.5 -0.5
Real Estate 6.5 3.9 2.6
Health Care 6.4 5.0 1.4
Utilities 4.8 2.2 2.6
Materials 3.2 4.3 -1.1
Industrials 2.8 5.3 -2.5
Energy 0.0 2.8 -2.8
Liabilities in Excess of Cash and Other Assets -8.9 0.0 -8.9

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 52.3 51.6 0.7
South Korea 15.7 15.2 0.5
Taiwan 15.6 14.2 1.4
India 13.3 10.4 2.9
Indonesia 3.2 1.5 1.7
Singapore 2.7 2.4 0.3
Philippines 2.0 0.8 1.2
Thailand 1.8 2.1 -0.3
Vietnam 1.2 0.0 1.2
Malaysia 1.1 1.7 -0.6
Liabilities in Excess of Cash and Other Assets -8.9 0.0 -8.9

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

Asset Type Fund
Common Equities and ADRs 109.0
Liabilities in Excess of Cash and Other Assets -8.9
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 64.9 64.0 0.9
Large Cap ($10B-$25B) 20.1 19.7 0.4
Mid Cap ($3B-$10B) 19.5 14.9 4.6
Small Cap (under $3B) 4.4 1.5 2.9
Liabilities in Excess of Cash and Other Assets -8.9 0.0 -8.9

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.

Ratings

  • OVERALL
  • 3 YEAR
  • 5 YEAR
  • 10 YEAR
(as of 22/01/2021)

Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.

Overall Morningstar RatingTM is reflective of the USD Accumulation Share class. Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Copyright ©2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is provided for reference purposes only.

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.

Portfolio Managers

Sharat  Shroff, CFA photo
Sharat Shroff, CFA

Lead Manager

Raymond Z. Deng photo
Raymond Z. Deng

Co-Manager

Inbok  Song photo
Inbok Song

Co-Manager

Commentary

Period ended 31 December 2020

For the year ending 31 December 2020, the Matthews Pacific Tiger Fund returned 30.48%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned 25.36%. For the fourth quarter of the year, the Fund returned 22.03% versus 18.66% for the Index.

Market Environment:

The pandemic created notable disruptions and opportunities in 2020, providing markets and companies with a major accelerant and catalyst for change. The pandemic accelerated the move into areas such as e-commerce, software services and digital platforms into warp speed, creating new opportunities for innovative businesses. Another significant trend is the acceleration of labor reform in India and Indonesia. And finally, we continued to see further deregulation and liberalization of China’s capital markets including greater openness towards foreign investment, which is providing additional liquidity and support for China’s rapidly growing bond and equity markets.

In 2020, corporate earnings across Asia dropped much less than analysts initially feared and we believe that earnings may rebound strongly in 2021. Taiwan and South Korea, for example, contributed significantly to Asia’s growth in 2020. Doing a strong job in containing the pandemic, both economies are also home to companies that are benefiting from the accelerated update in e-commerce and digital services. Another positive trend during the year was companies and management teams’ agility in cutting down costs and reining in capital expenditures. Free cash flow was resilient in the course of 2020.

While small cap stocks slightly outperformed large caps in 2020—the first time we’ve seen that dynamic in the past five years—the impact of the pandemic was disproportionately felt by small and medium-size businesses. As the economic recovery starts to broaden out, small and mid-sized companies may be able to participate more fully in economic growth.

Performance Contributors and Detractors:

During the year, contributors to performance included stock selection in China, Taiwan and South Korea. North Asian economies contained the pandemic relatively faster and companies in these countries responded proactively to the uncertain demand environment. The Fund’s holdings in IT hardware and software, health care and leading consumer brands such as Mediatek, Naver, Wuxi Biologics and China Resources Beer have shown strong core business operation and contributed positively during the year. From the strong equity market, the Fund’s financial holdings in Hong Kong Exchanges & Clearing Ltd. had positive performance too. Coupled with a strong equity market, capital raising activities by mainland Chinese companies have led greater trading volume on the exchange.

On the other hand, the Fund’s relative overweight in India and ASEAN detracted from performance during the year, as these economies took more time to recover from the pandemic and recovery has been more gradual. The Fund’s holdings in the shopping mall operators in Thailand, such as Central Pattana Public Co. Ltd, and the Philippines such as SM Prime Holdings, Inc. were also affected negatively during the year as traffic was restricted to those malls and tenants’ revenue shrunk. Additionally, the impact of the lock down on the asset quality of the banking sector weighed on investors’ sentiment, impacting the Fund’s holdings in India banks, such as HDFC Bank Limited (which we sold during the year), and Indonesian banks, such as PT Bank Central Asia. Our approach continues to maintain exposure to those shopping malls and banks with strong balance sheets as we believe long term structural demand is still intact.

Notable Portfolio Changes:

During this year, we continued to diversify the portfolio to capture secular growth opportunities that we believe can persist in coming years while maintaining focus on domestically oriented growth in Asia. The continued evolution in the business landscape especially in China, and pandemic-induced volatility in the capital markets allowed us to capture newer growth opportunities for the portfolio.  As a result, our weight in consumer discretionary, health care and IT sectors has increased. Meanwhile, the Fund’s weight in financials and consumer staples sectors decreased.

In the fourth quarter, we initiated some new positions, including in Yageo, a Taiwanese listed company that produces computer chips and other electronic components. As a small to mid-cap stock, Yageo appears undervalued relative to its global peers. We also see a strong turnaround story with the company, as its management is focused on new areas of growth and improving its execution. Some of these new positions were funded from capital released from positions like DKSH which we exited during the fourth quarter. The company has taken notable steps to improve cost structure but we believe there may be better growth opportunities elsewhere in the portfolio.

Outlook:

Looking ahead, uncertainty remains in terms of the pace of Asia’s economic recovery. Given the uncertainty of how quickly vaccines can be distributed, how quickly daily patterns may return to normal remain unknown and the strength of the economic recovery in different markets where we invest may not be immediately evident. Valuations for Asia ex-Japan equities are above their historic averages and in some areas of the market, we believe investors have already priced in a high level of anticipated future growth. All of these emphasize the importance of investing with a long-term view.

At the same time, we see many reasons for optimism. There are three important drivers for equity prices—growth, valuation and liquidity. From a growth perspective, Asia is on a path to economic recovery and the sheer size of the consumer base in Asia works in its favor. Valuations for Asia ex-Japan equities rose in 2020, so there is less valuation support for the broader market, but we continue to see pockets of opportunity. Finally, turning to market liquidity, we see good liquidity across Asia. We believe the confluence of these drivers will support medium to long-term growth across many parts of Asia.

Rolling 12 Month Returns For the period ended 31/12/2020 - I (Acc)
Name 2020 2019 2018 2017 2016 Inception Date
Matthews Pacific Tiger Fund (USD)
30.48% 11.18% -10.71% 39.47% -0.29% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Pacific Tiger Fund (GBP)
25.96% 7.87% -5.71% 27.14% 19.96% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
21.49% 13.94% -8.78% 29.78% 26.15%
Matthews Pacific Tiger Fund (JPY)
23.94% 9.79% -12.83% N.A. N.A. 27/03/2017
MSCI All Country Asia ex Japan (JPY)
19.10% 17.39% -16.36% N.A. N.A.
Matthews Pacific Tiger Fund (EUR)
19.40% N.A. N.A. N.A. N.A. 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
15.01% N.A. N.A. N.A. N.A.

Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg

Performance figures discussed in the Fund Manager Commentary above reflect that of the Institutional Accumulation Class Shares and has been calculated in USD. Performance details provided for the Fund are based on a NAV-to-NAV basis, with any dividends reinvested, and are net of management fees and other expenses. Past performance information is not indicative of future performance. Investors may not get back the full amount invested.

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. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information.

Information contained herein is sourced from Matthews Asia unless otherwise stated. The views and opinions in this commentary were as of the report date, subject to change and may not reflect the writer’s 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.

Investors should not invest in the Fund solely based on the information in this material alone. Please refer to the Prospectus for further details of the risk factors. 

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