Matthews International Capital Management, LLC, advisor to the Matthews Asia Funds, has expanded its fund lineup to include the firm’s first dedicated fixed income investment strategy, the Matthews Asia Strategic Income Fund.
Managed by Teresa Kong, CFA, and co-managed by Gerald Hwang, CFA, and Robert Horrocks, PhD, the Matthews Asia Strategic Income Fund will seek total return over the long term, with an emphasis on income. The Fund invests primarily in bonds and other debt securities of Asian corporate and sovereign issuers in both local and hard currencies, and seeks high, risk-adjusted return by investing across the capital structure and across currencies.
Matthews believes the growth of Asia’s bond markets is one of the region’s most important and remarkable economic developments of the past decade. The region’s significant structural reforms have led to steady upgrades in Asia’s sovereign credit ratings while several developed Western countries have recently suffered downgrades. In addition, Asia’s bond markets have experienced improvements in liquidity, transparency and diversification.
"Investors’ fixed income portfolios tend to be underinvested in Asia since widely used global debt benchmarks generally allocate to the most indebted countries as opposed to the most creditworthy," said Teresa Kong. "At Matthews, we take an active, bottom up approach and weight our portfolio in proportion to a country’s creditworthiness, price stability and currency appreciation."
The Matthews Asia Strategic Income Fund is intended as a lower volatility product than the firm’s other Funds, offering the potential for attractive yield and diversification. Both Investor (MAINX) and Institutional (MINCX) Class Shares are available for this Fund.
"Foreign investors have increasingly gained access to Asian bonds. This increase has come as more overseas investors seek to reallocate assets into emerging countries in a quest for higher returns and diversification away from the potentially diminishing purchasing power of the US dollar," says Matthews Chief Investment Officer, Robert Horrocks (pictured). "We are pleased that the enhanced breadth and depth of Asia’s bond markets, coupled with their strong fundamentals, now enable us to offer our first fixed income investment strategy."