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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

-18.95%

YTD Return (USD)

(as of 05/12/2022)

$19.67

NAV (USD)

(as of 05/12/2022)

+0.34

1 Day NAV Change

(as of 05/12/2022)

Objective

Seeks to achieve long term capital appreciation.

Sustainability

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.

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.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 30/04/2010
Fund Assets $313.70 million (31/10/2022)
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
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2022 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR ) 0.90% ( JPY )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
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As of 31/10/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund (USD)
-8.06% -19.31% -34.24% -36.72% -4.00% -2.40% 3.11% 3.81% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
-6.09% -18.02% -32.03% -33.74% -4.51% -3.05% 2.70% 3.04%
Matthews Pacific Tiger Fund (GBP)
-11.77% -14.79% -22.93% -24.13% -0.13% 0.39% 6.65% 6.52% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
-8.95% -13.36% -20.04% -21.11% -0.71% -0.24% 6.21% 5.46%
Matthews Pacific Tiger Fund (JPY)
-5.47% -10.10% -15.05% -17.33% 6.74% 3.04% n.a. 6.10% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
-3.57% -8.83% -12.27% -13.63% 6.19% 2.30% n.a. 6.13%
Matthews Pacific Tiger Fund (EUR)
-9.63% -16.92% -24.86% -25.62% -0.21% n.a. n.a. -0.95% 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
-6.92% -15.43% -21.80% -22.42% -0.57% n.a. n.a. -1.06%
As of 30/09/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Pacific Tiger Fund (USD)
-12.19% -11.74% -28.47% -29.43% -0.85% 0.26% 4.05% 4.54% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
-12.73% -13.69% -27.62% -28.48% -1.03% -0.91% 3.32% 3.58%
Matthews Pacific Tiger Fund (GBP)
-7.49% -3.15% -12.64% -14.01% 2.82% 4.20% 8.13% 7.73% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
-9.03% -6.10% -12.18% -13.61% 2.29% 2.80% 7.21% 6.36%
Matthews Pacific Tiger Fund (JPY)
-8.44% -6.30% -10.14% -8.84% 9.32% 5.43% n.a. 7.29% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
-8.87% -8.04% -9.03% -7.22% 9.10% 4.20% n.a. 6.93%
Matthews Pacific Tiger Fund (EUR)
-9.86% -5.81% -16.86% -16.14% 2.90% n.a. n.a. 2.00% 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
-10.42% -7.89% -15.98% -15.39% 2.56% n.a. n.a. 1.00%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews Pacific Tiger Fund (USD)
-3.08% 30.48% 11.18% -10.71% 39.47% -0.29% -1.91% 11.22% 4.86% 18.65%
MSCI All Country Asia ex Japan Index (USD)
-4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34% 22.70%
Matthews Pacific Tiger Fund (GBP)
-1.74% 25.96% 7.87% -5.71% 27.14% 19.96% 3.14% 18.00% 2.56% 13.54%
MSCI All Country Asia ex Japan Index (GBP)
-3.58% 21.49% 13.94% -8.78% 29.78% 26.15% -3.63% 11.65% 1.42% 17.31%
Matthews Pacific Tiger Fund (JPY)
8.30% 23.94% 9.79% -12.83% n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan (JPY)
6.56% 19.10% 17.39% -16.36% n.a. n.a. n.a. n.a. n.a. n.a.
Matthews Pacific Tiger Fund (EUR)
5.06% 19.40% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan Index (EUR)
2.79% 15.01% n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
For the period ended 30/09/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Pacific Tiger Fund (USD)
-29.43% 19.88% 15.22% 0.28% 3.62% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
-28.48% 14.73% 18.16% -3.15% 1.74%
Matthews Pacific Tiger Fund (GBP)
-14.01% 14.31% 10.60% 6.19% 6.43% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
-13.61% 10.00% 12.63% 2.49% 4.67%
Matthews Pacific Tiger Fund (JPY)
-8.84% 26.99% 12.84% -4.52% 4.46% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
-7.22% 21.30% 15.38% -7.85% 2.66%
Matthews Pacific Tiger Fund (EUR)
-16.14% 21.18% 7.23% n.a. n.a. 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
-15.39% 16.08% 9.85% 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 31/10/2022)
Fund Benchmark
Number of Positions 60 1,205
Weighted Average Market Cap $71.6 billion $77.8 billion
Active Share 72.1 n.a.
P/E using FY1 estimates 17.0x 10.4x
P/E using FY2 estimates 15.5x 10.2x
Price/Cash Flow 11.8 6.0
Price/Book 2.7 1.4
Return On Equity 15.8 14.9
EPS Growth (3 Yr) 10.0% 11.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2022)
1.22%
Alpha
1.09
Beta
109.66%
Upside Capture
103.28%
Downside Capture
-0.23
Sharpe Ratio
0.11
Information Ratio
4.71%
Tracking Error
95.23

Fund Risk Metrics are reflective of Class I USD ACC shares.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/10/2022)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 5.0
Samsung Electronics Co., Ltd. Information Technology South Korea 4.8
ICICI Bank, Ltd. Financials India 3.9
Central Pattana Public Co., Ltd. Real Estate Thailand 3.1
Meituan Consumer Discretionary China/Hong Kong 2.9
PT Bank Central Asia Tbk Financials Indonesia 2.5
Shenzhen Inovance Technology Co., Ltd. Industrials China/Hong Kong 2.4
AIA Group, Ltd. Financials China/Hong Kong 2.3
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.2
China Tourism Group Duty Free Corp., Ltd. Consumer Discretionary China/Hong Kong 2.2
TOTAL 31.3

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 31/10/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 23.3 22.4 0.9
Consumer Discretionary 19.4 13.5 5.9
Financials 15.0 21.7 -6.7
Consumer Staples 7.7 5.6 2.1
Real Estate 7.5 3.6 3.9
Industrials 6.1 7.0 -0.9
Communication Services 4.7 8.5 -3.8
Materials 3.7 5.8 -2.1
Health Care 2.4 4.3 -1.9
Utilities 2.3 3.3 -1.0
Energy 0.0 4.3 -4.3
Cash and Other Assets, Less Liabilities 8.0 0.0 8.0

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 38.4 38.7 -0.3
India 18.0 19.1 -1.1
Taiwan 13.6 15.8 -2.2
South Korea 9.8 14.1 -4.3
Indonesia 3.6 2.7 0.9
Thailand 3.1 2.6 0.5
Philippines 2.2 0.9 1.3
Singapore 2.1 4.1 -2.0
Vietnam 1.2 0.0 1.2
Malaysia 0.0 1.9 -1.9
United States 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 8.0 0.0 8.0

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

Asset Type Fund
Common Equities and ADRs 92.1
Cash and Other Assets, Less Liabilities 8.0
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 43.5 53.9 -10.4
Large Cap ($10B-$25B) 21.3 22.4 -1.1
Mid Cap ($3B-$10B) 16.0 20.2 -4.2
Small Cap (under $3B) 11.2 3.5 7.7
Cash and Other Assets, Less Liabilities 8.0 0.0 8.0

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 03/02/2021)

View the Report

(as of 28/07/2022)

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

The Elite RatingTMsystem is proprietary to FundCalibre Ltd, but should not be taken as a recommendation.

Overall Morningstar RatingTM is reflective of the noted share class. Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Copyright ©2021 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.

The Morningstar Analyst Rating™ is subjective in nature and reflects Morningstar's current expectations of future behavior of the fund. Morningstar does not guarantee that a fund will perform in line with its Rating. Likewise, the Rating should not be seen as a guarantee/assessment of the creditworthiness of a fund or its underlying securities and should not be used as the sole basis for making any investment decisions.

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

Inbok  Song photo
Inbok Song

Lead Manager

Winnie  Chwang photo
Winnie Chwang

Co-Manager

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Co-Manager

Commentary

Period ended 30 September 2022

For the quarter ending 30 September 2022, the Matthews Pacific Tiger Fund returned -11.74%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -13.69%. 

Market Environment:

The third quarter was negative across emerging and Asian equity markets, and they fell victim to a confluence of actions including the U.S. FED’s increased hawkishness, China’s zero-COVID policy, geopolitical tensions and fear of a tightening-led slowdown in global growth. The Asian region’s weakness was led by China as investors continue to wrestle with the uncertainty arising from zero-COVD policy and worries about a spillover of the county’s real estate woes into its broader economy. South Korea and Taiwan fell in sympathy with some of the global concerns around economic growth and a slowdown in the IT hardware sector.  All sector indices were negative for the quarter. 

Asian currencies also depreciated but it seems to be more of a case of a stronger U.S. dollar.  On a trade-weighted basis, Asian currencies are still proving to be resilient barring the South Korean won as the country struggles to manage inflation and weakening current account. 

Foreign investor flows have remained negative for the year with the exception of some of the smaller markets in the region like Thailand and Indonesia. 

Performance Contributors and Detractors:

From a country perspective, India was the biggest contributor to the portfolio’s absolute performance driven by continuous strong demand in real estate, consumer discretionary and financials sectors.  On a relative basis, China was the top contributor driven by stock selection, especially in the consumer sector. On the other hand, stock selection in South Korea, especially in the battery materials sector detracted the most from absolute performance.

From a sector perspective, stock selection in the consumer discretionary, consumer staples and information technology sectors contributed the most to relative performance while stock selection in the industrials sector and the portfolio’s zero exposure to the energy sector detracted the most from relative performance.

Turning to individual securities, one of the portfolio’s longstanding holdings, India-based Titan Company, was among the top contributors to performance. Titan manufactures fashion accessories and has strengthened its moat by reinforcing trust and transparency in the branded jewelry business which is allowing the company to gain market share from mom-and-pops. Fast-food restaurant company Yum China was another contributor within the consumer discretionary sector. Though domestic consumption recovery has been non-linear with China’s dynamic zero-COVID policy, the company was able to improve same store sales growth via strong execution through online delivery, appropriate quarantine measures for store employees and continued store openings. On the other hand, South Korea-based SK IE Technology and Singapore-based SATS were two notable detractors to performance due to company specific issues. Delayed ramp up of the initial production of the battery component for SK IE technology and a large size acquisition to change balance sheet profile for SATS were major culprits for their underperformance. 

Notable Portfolio Changes:

During the quarter, we took advantage of market volatility to rotate capital and make adjustments to the portfolio. We continue to find opportunities in China/Hong Kong market and initiated positions in a Chinese real estate company KE Holdings, a housing transaction platform provider. Although the Chinese property market is undergoing a difficult period catalysed by the government’s deleveraging policies, the company is emerging as a significant sales platform for not only new homes but increasingly, used homes which is well aligned with the healthy development of the China property market in the long run. We also initiated a position in Pinduoduo, a consumer discretionary platform company. Pinduoduo is positioned as a leader in the development of e-Commerce in lower-tier cities in China and provides more “value for money” products to consumers. The company’s ability to drive operational leverage may continue to surprise investors as there is an increasing emphasis on quality of growth. Valuation of these companies are more favorable compared to their history, and more so based on the future prospect of profitable growth. New positions were funded by rotating capital out of holdings in South Korea, Taiwan and India.

Outlook:

The bulk of the weakness across the region has been driven by a compression in valuation, but there has also been some erosion in earnings—most notably in China although (at the time of writing) analysts are still projecting some EPS growth for C2022.  The consumer sector in China has felt the brunt of the country’s zero-COVID policy, and the impact on platform type business models has been further exacerbated by regulatory impact. Companies listed in the onshore (mainland) market in China are proving to be slightly more resilient due to the diversity in business models.  Across the rest of the region, credit growth in India hit a near-term peak, and the trend in earnings is still holding up but valuations remain a reason to rotate capital away. The Asian region may be able to cope with some of the challenges faced by global economy due to a relatively better macro-backdrop compared to prior periods of the U.S. dollar strength. With valuations becoming more attractive, the portfolio management team is continuously looking for business models that have the staying power to deliver growth for the next many years. 

Rolling 12 Month Returns For the period ended 30/09/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Pacific Tiger Fund (USD)
-29.43% 19.88% 15.22% 0.28% 3.62% 30/04/2010
MSCI All Country Asia ex Japan Index (USD)
-28.48% 14.73% 18.16% -3.15% 1.74%
Matthews Pacific Tiger Fund (GBP)
-14.01% 14.31% 10.60% 6.19% 6.43% 28/02/2011
MSCI All Country Asia ex Japan Index (GBP)
-13.61% 10.00% 12.63% 2.49% 4.67%
Matthews Pacific Tiger Fund (JPY)
-8.84% 26.99% 12.84% -4.52% 4.46% 27/03/2017
MSCI All Country Asia ex Japan (JPY)
-7.22% 21.30% 15.38% -7.85% 2.66%
Matthews Pacific Tiger Fund (EUR)
-16.14% 21.18% 7.23% N.A. N.A. 30/04/2019
MSCI All Country Asia ex Japan Index (EUR)
-15.39% 16.08% 9.85% 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. 

Index Definitions