Investing in Asia with an Expert: Matthews Funds
The hype of recent years has been that Asia is the accelerating growth story of the world and the developed western countries are headed for slow and steady (or worse) performances. The worldwide recession that hit in 2008 only seemed to strengthen this sentiment. The problem is, how should one go about investing in Asia? One option is investing with an Asia specialist such as The Matthews Funds.
Since 1991, Matthews International Capital Management, the advisor to The Matthews Funds, has focused exclusively on Asia. In fact, it claims to be “the largest dedicated Asia-only investment specialist in the United States.” While you could probably nit pick about this claim, the fact remains that it does one thing and one thing only—invest in Asia. And, historically, it has done a pretty good job.
The team at Matthews holds a few core beliefs that drive their investments. The leading belief is that Asia’s growth will continue as the region’s economies mature. This will allow new markets and industries to take hold and drive the region’s growth. On a finer note, Matthews has recently been focusing on companies that will benefit as the spending power of consumers in the region increases, not just on companies that export to western nations.
Matthews also believes that a long-term view is vital when investing in Asia. Based on the firm’s long-term growth expectation for the region, this core belief makes complete sense. When one takes note of the volatility of the markets in Asia over the years, this type of long-term commitment increases in importance regardless of the fund or fund family with which one invests. Indeed, the vast majority of the nations in Asia fall into the emerging market category, which is generally regarded as one of the highest risk asset classes.
Not surprisingly, Matthews also believes that active management is important as a tool in avoiding both less desirable companies that might be included in index-based investment offerings, such as exchange traded funds, and to allow for portfolio changes when markets or stocks are moving quickly. The merits of active versus index-based management can be debated, but if you fall on the active management side of the equation, this core belief will sit well.
The funds offered by Matthews span a broad range, from country-focused offerings to ones that provide exposure to the entire region, and from growth-oriented funds to income-oriented ones. (Note that Matthews is one of the few families to offers a fund focused exclusively on India.)
Below is a list of funds in the Matthews family. The company’s website provides a great deal of information about its investment outlook, so interested investors should take the time to read through the research updates published by the fund managers before making investment decisions.
Matthews Asia Dividend (MAPIX)
Matthews Asia Pacific (MPACX)
Matthews Asia Small Companies (MSMLX)
Matthews Asian Growth and Income (MACSX)
Matthews Asian Technology (MATFX)
Matthews China (MCHFX)
Matthews China Dividend (MCDFX)
Matthews India (MINDX)
Matthews Japan (MJFOX)
Matthews Korea (MAKOX)
Matthews Pacific Tiger (MAPTX)