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Matthews plans to launch two new funds..Asia Focus Fund and Emerging Asia Fund.
Emerging Asia seems to be a frontier markets fund managed by a relative newcomer. Focus will invest in 25-35 stocks managed by a long-time Matthews employee. Both (and several other intriguing new launches) will be highlighted in the March Funds in Registration.
I think I get the distinction of the Emerging Asia Fund:
Although the Fund may invest in companies located in any country in Asia Ex Japan, once fully invested and under normal market conditions, the Fund is expected to invest a substantial portion of its total net assets in the emerging countries and markets in the Asian region, including, but not limited to, Bangladesh, Cambodia, China, India, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Pakistan, Papua New Guinea, Philippines, Sri Lanka, Thailand and Vietnam (“Emerging Asian Countries”). The list of Emerging Asian Countries may change from time to time. The Fund may invest in companies of any market capitalization, including micro-cap companies (i.e., market capitalization of $250 million or less).
At this point, less obvious what distinguishes the so-called Asia Focus Fund from the current thirteen Asia-focused funds already in Matthew's shop, except higher ER.
Reply to @Charles: It looks like unlike the other funds this one will invest in smaller markets, countries and probably relatively illiquid assets. There is an liquidity premium in such stocks but in bad times comes the carnage.
Last time, a year after Wasatch launched their successful emerging markets small cap fund WAEMX, they launched MSMLX. At first, these two funds were marching in a lockstep, but then MSMLX slowed down, perhaps because of its China concentration. In the beginning of 2012 Wasatch launched the frontier markets fund WAFMX. Probably they know some dark secret how to do things like that: This fund is up almost 40% during the last year. Is the Emerging Asia Fund a proper answer?
Reply to @andrei: Time will tell on whether it's a "proper" response, but I suspect the fund market demands Matthews offer something comparable at this juncture.
Reply to @David_Snowball: Thanks David. That sounds a little better. I struggle a bit with the "focused" concept. I never really saw the benefit of Mr. Yacktman having both YAFFX and YACKX. Seems like concentration is either intrinsic to the house's overarching philosophy or not. In any case, will look forward to your preview in next month's commentary, as always.
One more thing, Wasatch opened an emerging market focussed fund after closing WAEMX, so looks advisors/planners for both shops are either same or close friends. Mathews starting similar funds (focussed and frontier) at Asia level after Wasatch did in the recent past.
Reply to @AndyJ: My sentiments, too. I take you to mean that we don't want Matthews to be inventing and manufacturing new funds, just because, without much rationale or logic or purpose.
Matthews also manages part of the multi-manager Witan Pacific Investment Trust, which is an investment trust on the London market. (it's co-managed by Aberdeen and MW Gavekal)
The Trust’s portfolio is outsourced to three managers, Aberdeen Asset Management Limited, Matthews International Capital Management, LLC and MW GaveKal Asia Limited, each managing Asia cum Japan mandates aiming to outperform the MSCI AC Asia Pacific Free Index (£). In Aberdeen, Matthews and MW GaveKal the Trust has a blend of strong managers with distinctive and sucessful records who will seek to deliver a well-defined, balanced portfolio with an attractive mix of quality, growth and dividend yield. Each manager has a distinct investment approach:
Aberdeen - stock specific, unconstrained, growth at an attractive price
GaveKal - unconstrained, actively managing exposure to equities, bond and cash
Strategy Use an active multi-manager approach to add value and diversify risk. Manage the fund for growth predominantly through capital return. Employ share buy-backs when the Company's shares are standing at an anomalous discount to their net asset value. Deploy moderate levels of gearing to augment long-term returns while giving discretion to the Investment Managers to hold cash. Aim to grow the dividend per share in real terms, subject to market circumstances and an overriding test of prudence. Control costs and expenses to maintain a total expense ratio (excluding performance fees) of less than 1%.
Reply to @scott: Why would one buy a foreign trust when an American Fund Company offers equal or better returns, coupled with cheaper expenses. Buy American !!!
Reply to @MaxBialystock: That would be the apartment on the dark side that's next door to Royce. Not that I think these launches are evidence that it's really going to go that way, but it would be a very big disappointment por moi if it did.
Reply to @Ted: Not saying that anyone should buy it, just saying that - in a discussion talking about Matthews opening up another two funds - that there's another fund that they manage that people aren't likely aware of.
Reply to @scott: Cool stuff Scott. Thanks for finding...
I too learned when doing the Matthews Asia MAINX piece last month that when it comes to funds that invest in Asia, houses like Aberdeen may have different offerings for investors in say London or Hong Kong than those available to US investors stateside.
On the recent MFO Seafarer teleconference with fund manager Andrew Foster, he alluded to Seafarer "the business" growing outside the pure fund. Perhaps private accounts or trusts, like your Witan Pacific Investment announcement above.
I wouldn't be surprised to see a GrandeurPeak Frontier Emerging Markets fund when they decide to close one or both of their funds. They even alluded to wanting to limit the amount in light of other offerings.
Comments
As ever,
David
Regards,
Ted
Compare Matthews Fund Side-By-Side
http://us.matthewsasia.com/our-funds/compare-funds.fs
http://www.witanpacific.com/
The Trust’s portfolio is outsourced to three managers, Aberdeen Asset Management Limited, Matthews International Capital Management, LLC and MW GaveKal Asia Limited, each managing Asia cum Japan mandates aiming to outperform the MSCI AC Asia Pacific Free Index (£). In Aberdeen, Matthews and MW GaveKal the Trust has a blend of strong managers with distinctive and sucessful records who will seek to deliver a well-defined, balanced portfolio with an attractive mix of quality, growth and dividend yield. Each manager has a distinct investment approach:
Aberdeen - stock specific, unconstrained, growth at an attractive price
Matthews - stock specific, unconstrained, long-term strategy blending yield with growth potential
GaveKal - unconstrained, actively managing exposure to equities, bond and cash
Strategy
Use an active multi-manager approach to add value and diversify risk.
Manage the fund for growth predominantly through capital return.
Employ share buy-backs when the Company's shares are standing at an anomalous discount to their net asset value.
Deploy moderate levels of gearing to augment long-term returns while giving discretion to the Investment Managers to hold cash.
Aim to grow the dividend per share in real terms, subject to market circumstances and an overriding test of prudence.
Control costs and expenses to maintain a total expense ratio (excluding performance fees) of less than 1%.
I too learned when doing the Matthews Asia MAINX piece last month that when it comes to funds that invest in Asia, houses like Aberdeen may have different offerings for investors in say London or Hong Kong than those available to US investors stateside.
On the recent MFO Seafarer teleconference with fund manager Andrew Foster, he alluded to Seafarer "the business" growing outside the pure fund. Perhaps private accounts or trusts, like your Witan Pacific Investment announcement above.
I wouldn't be surprised to see a GrandeurPeak Frontier Emerging Markets fund when they decide to close one or both of their funds. They even alluded to wanting to limit the amount in light of other offerings.
Mike_E