Matthews Asia has launched the Matthews Emerging Markets Equity Fund. The launch of this fund represents an important milestone in the firm’s history, as this will be the first Matthews Asia strategy to invest in broad emerging markets.
For 29 years, Matthews Asia has focused its research and investment capabilities within a region that now dominates the emerging markets. Asia’s representation within the MSCI Emerging Market Index has risen to over 75 per cent, with the increasing inclusion of China’s domestically listed A-shares driving recent changes in benchmark weightings. The firm believes that the ascendance of Asia, and the long-term potential of China in particular, makes it increasingly important for emerging market investors to have an investment manager with deep experience of the region. As an Asia investment specialist, Matthews Asia has significant experience investing in the complex and diverse range of countries and economies that comprise the largest segment of emerging markets. The firm believes it can leverage this expertise in other emerging markets and apply the same established fundamental investment process in order to evaluate a company, its management team, corporate governance, and valuation.
While Matthews Asia continues to believe that a dedicated allocation to Asia is the most effective approach to gain exposure to the region, the firm also recognises that many investors manage their asset allocation to Asia using a broader emerging markets investment solution. With Asia comprising the core of emerging markets, the distinction between dedicated Asia and emerging markets is not as distinct as it was when the firm was founded in 1991. Matthews Asia recognises that investors may want a portfolio with exposure to broad emerging markets opportunities.
Using a fundamental, bottom-up investment approach, the Matthews Emerging Markets Equity Fund seeks to provide investors with a core, quality-growth portfolio. The investment team typically look for companies that have higher growth metrics, as well as higher quality metrics, than the broader market. The Fund also tends to focus on companies that generally can serve the growing needs of domestic consumers within their market, exhibit less cyclicality and have long-term structural growth potential.
Lead managers on the Fund are John Paul Lech and Beini Zhou. Before joining Matthews Asia, Lech spent 10 years at OppenheimerFunds (subsequently acquired by Invesco) as an analyst and portfolio manager on a diversified emerging market equity strategy. Zhou joined Matthews Asia in 2013 from Artisan Partners and has extensive experience researching companies in Asia.
William Hackett, CEO, comments: “At Matthews Asia, our mission has always been to provide our clients with Asia investment solutions that can generate attractive returns and build wealth over the long term. With Asia’s growing prominence in emerging markets, I believe this is the right time for an Asia specialist to launch an emerging market strategy that takes advantage of our 29 years of investment experience in the region and apply that to markets outside of Asia. We are excited to be broadening our Asia investment solutions for our investors that I believe will enable them to benefit from our distinctive long-term investment perspectives.”