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
A focus on Asia—and providing compelling investment solutions for our clients—is what we believe distinguishes us among investment managers. Our insights into investment opportunities and risks are backed by proprietary research, a collaborative culture and 30 years of experience.
30/04/2010
Inception Date
-19.28%
YTD Return (USD)
(as of 10/08/2022)
$19.59
NAV (USD)
(as of 10/08/2022)
-0.19
1 Day NAV Change
(as of 10/08/2022)
Seeks to achieve long term capital appreciation.
The Sub-Fund promotes environmental and social characteristics according to Article 8 of SFDR. Furthermore, the Sub-Fund uses both activity- and norm-based exclusions. Information relating to the environmental and social characteristics of this Sub-Fund is available in the prospectus.
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.
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, emerging and frontier market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation, which may adversely affect the value of the Fund's assets. 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.
These and other risks associated with investing in the Fund can be found in the prospectus.
Inception Date | 30/04/2010 | |
Fund Assets | $339.44 million (31/07/2022) | |
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 | |
SFDR Classification | Article 8 |
Management Fee | 0.75% | |
Total Expense Ratio As of 31/03/2022 | 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR ) 0.90% ( JPY ) |
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, emerging and frontier market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation, which may adversely affect the value of the Fund's assets. 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 |
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.
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Class I USD ACC shares.
Sources: Zephyr StyleADVISOR
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
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.
Lead Manager
Portfolio Manager
Sharat Shroff is a Portfolio Manager at Matthews Asia and manages the firm’s Pacific Tiger Strategy and co-manages the India Strategy. Prior to joining Matthews Asia in 2005, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology from the Institute of Technology in Varanasi, India and an MBA from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.
Lead Manager
Portfolio Manager
Inbok Song is a Portfolio Manager at Matthews Asia and manages the firm’s Pacific Tiger Strategy. Prior to rejoining the firm 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 Asia, 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.
Co-Manager
Portfolio Manager
Winnie Chwang is a Portfolio Manager at Matthews Asia and manages the firm’s China Small Strategy and co-manages the China and Pacific Tiger 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.
Co-Manager
Portfolio Manager
Andrew Mattock is a Portfolio Manager at Matthews Asia and manages the firm’s China and China Small Companies Strategies and co-manages the firm’s Pacific Tiger Strategy. Prior to joining the firm 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.
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.
The Markit iBoxx Asian Local Bond Index tracks the total return performance of a bond portfolio consisting of local-currency denominated, high quality and liquid bonds in Asia ex-Japan. The Markit iBoxx Asian Local Bond Index includes bonds from the following countries: China (on- and offshore markets), Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.
The J.P. Morgan Asia Credit Index (JACI) tracks the total return performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and is partitioned by country, sector and credit rating. JACI includes bonds from the following countries: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand.
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 China A Onshore Index captures large and mid cap representation across China securities listed on the Shanghai and Shenzhen exchanges. Index is for comparative purposes only and it is not possible to invest directly in an index.
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 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).
Commentary
Period ended 30 June 2022
For the first half of 2022, the Matthews Pacific Tiger Fund returned -18.95%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -16.14% over the same period. For the quarter ending June 30, 2022, the Fund returned -9.44%, while the benchmark returned -8.90%.
Market Environment:
The first half of the year was a challenging period. The Asia ex Japan region experienced a largely similar rate of decline in the first and second quarters but the factors influencing the decline were quite different. In the first quarter, Chinese equities and the financials sector were the worst performing but recovered nicely to be the best performing in the second quarter. On the flip side, the contributions of Vietnam, Taiwan and South Korea deteriorated in the second quarter with latter the biggest detractor to the Fund in the period. The biggest driver of this change is the ongoing evolution of investor perception of China, and the uncertainty around its zero-COVID policy which is curbing domestic consumption. High energy prices are an additional tax for consumers and companies in South Asia and has weighed on equity returns particularly in the second quarter. In addition, small caps have continuously underperformed this year reflecting concerns around rising cost of capital and weak domestic demand in many parts of Asia but this follows past few years of outsized returns.
Foreign exchange trends have remained consistent through the first half reflecting some depreciation for Southeast Asia currencies and the Indian rupee. However, there was a sharp change in the trend for the Chinese renminbi which depreciated by about 3% late in April—in spite of that move, the renminbi trades at roughly the same level compared to three years ago.
Performance Contributors and Detractors:
For the first half of 2022, stock selections in Thailand, the Philippines and Indonesia contributed the most to the Fund’s relative performance. Southeast Asian countries have shown late but sustained economic recovery from the pandemic. On the other hand, stock selection within Taiwan and South Korea detracted the most from relative performance. There has been a general technology sector correction amid a growth-to-value style rotation in Taiwan and global macro concerns over the interest rate hiking cycle have negatively affected South Korea. It is notable that underperformance within China was more concentrated in the first quarter. Some of that relative underperformance was recovered during the second quarter, given the emergence of supporting policies from the Chinese government. Thus, during the second quarter, the Fund’s holdings such as China Tourism Group, a China-based company principally engaged in the travel agency and duty-free businesses, and Kweichow Moutai, China’s premier white liquor business, contributed positively. Expectations for travel resumption with China Tourism Group and the resilient operations of Kweichow Moutai with relatively attractive valuations supported the performance of these companies. On the other hand, continuous concern over the macro environment further dragged down South Korea holdings in the second quarter. For example, industrial holdings such as Doosan Bobcat, a South-Korean construction machinery manufacturer, underperformed amid worries over upcoming headwinds though current earnings have been resilient.
From a sector perspective, real estate and consumer staples were positive contributors during the first half, helped by our holdings in shopping mall companies in the Philippines and Thailand with improved foot traffic, and Kweichow Moutai in China as its push towards direct sales progressed well. Meanwhile, financials, information technology (IT) and communication services detracted from the fund’s performance in the first half. The Fund’s holdings in South Korea’s communication services sector, such as Naver, a search engine and internet content provider, and Hybe, an artist management company, underperformed with potentially weakening demand and increased cost burdens combined with relatively high valuations to begin with.
Notable Portfolio Changes:
We increased the portfolio’s weight in China by adding to existing holdings such as China Tourism Group and Meituan, a web-based shopping platform company, as valuations became more attractive while long-term earnings generation capability remains intact. We believe these companies are likely to benefit from a recovery in domestic consumption. This was funded by trimming positions in the IT sector in South Korea and Taiwan. Though these IT companies have strong fundamentals, near-term earnings uncertainty risk has increased as these companies are exposed to the global demand environment.
We also exited positions with demanding valuations and deteriorating earnings visibility. This is a part of efforts to manage the downside risk and reallocate capital into areas where we see better earnings visibility with certain valuation supports. SEA, an internet gaming and e-commerce company in Singapore, is an example. While the company has achieved an impressive track record in establishing sizable market share across different countries, increased uncertainty around its internet gaming as a “cash cow” may delay the expected profitability goal amid continuous needs for e-commerce investment.
Although the portfolio’s number of holdings has decreased to a near-term low, especially in China, it is quite likely that the position count may increase into the second half of 2022 as we look to benefit from cheaper valuations.
Outlook:
Looking ahead, the Asia ex Japan region is in a relatively better situation from a macroeconomic standpoint as the inflationary pressures are not as severe as in the West, and several countries are still in the process of recovering fully from COVID-19 related disruptions. In particular, China is positioned well for a pickup in domestic activity as the government is starting to support consumers and small and medium-sized enterprises (SMEs) through gradual release of stimulus programs. Unlike the interest rate cycle in the West, interest rates are easing in China which may help lower the cost of capital for companies. In other parts of the region, shopping mall operators like in Southeast Asia, stand to benefit from resumption of tourism activities.
The earnings picture looks a bit mixed largely because of downgrades earlier in the year in China as several key cities were locked down but that is changing for the better. Valuations have eased to a low-teens P/E ratio while the projected earnings growth (average) over the next two years for the MSCI Asia ex Japan Index is in the high single digits. We are sanguine about the potential economic recovery in parts of Asia and are looking to position the portfolio to participate in that growth.
Rolling 12 Month Returns For the period ended 30/06/2022 - I (Acc)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg