Global CIO & Pres Yu-Ming Wang is leaving after 6 months - Robert Horrocks will (again?) be CIO. August saw the departure of Tiffany Hsiao, who ran Matthews China Small Companies MCMSX and Matthews Asia Small Companies MSMLX & co-managed Asia Innovators MATFX/MITEX, and of Beini Zhou, who managed the about-to-close Matthews Value Fund MAVRX and co-managed Matthews Asia Small Companies and Matthews Emerging Markets MEASX funds (& has now turned up at Artisan.) As far as I can tell Asia Innovators and Emerging Markets each still have kept a manager, but the other funds are getting new leaders.
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Also, as of today, an Artisan spokesperson confirmed that Hsiao has also joined Artisan, but in what capacity, we don't know. The Barron's article is behind a paywall "'A Leading Money Manager for Asian Stocks Is Seeing a Big Exodus." You can probably read it via a private window.
https://www.investmentweek.co.uk/news/4020713/tiffany-hsiao-joins-artisan-partners-md#:~:text=Former manager of the Matthews,Yuanyuan Ji and Beini Zhou.
And I just found out about the Global CIO (what's difference wit CIO Robert Horrocks?) and President departing yesterday from FundFire! Has there been any explanation for his 6 month tenure? Fundfire mentioned two other executives, COO being one of them, also left this year after a very short tenure. President/Global CIO, COO and PMs all leaving in the span of 6 months. Feels like something is off? Big exodus sounds about right.
https://www.pionline.com/money-management/matthews-asias-presidentglobal-cio-resigns
Stay Safe, Derf
I looked at MAPIX earlier this year. Performance had struggled a bit over the last 12 months. IIRC, the 3-year return number was below the benchmark, which shocked me. It's since recovered some, but compared to other active funds in that category, Columbia Pacific Asia (USPAX) and Fidelity Pacific Basin (FPBFX) have superior return numbers for 1, 3 and 5 year trailing. I went with FPBFX as the return numbers were better and the expense ratio was 97 bps vs MAPIX 102 bps.
The recent spate of personnel turnover is very concerning.
Does anyone know the true root cause?
So that's 5 very senior PMs departing in the span of 6 months, plus the President/Global CIO, COO and CHRO. I see smoke!
https://citywireusa.com/professional-buyer/news/fund-files-matthews-managers-depart-invesco-fund-under-review-after-index-error/a1354995
https://www.linkedin.com/in/lydia-so-cfa-b9b0171b3/
Fidelity® Emerging Asia (FSEAX) Performance | Morningstar
https://www.morningstar.com/funds/xnas/fseax/performance
Stay Safe, Derf
Asset managers as businesses may face rocky roads ahead. In fact, from its IPO in 2013 until the present, Artisan Partners stock hasn’t seen any appreciation. While it’s hard to draw conclusions from the last 12 months or so, Schwab’s stock has disappointed at a time when the company has expanded its asset base. Personally, I am drawn to small MF firms for my actively managed holdings. Therefore, I own funds at Artisan, DF Dent, Brown Capital, Brown Advisory, and Grandeur Peak. With the exception of GP, I use Schwab for our Roths and taxable MF accounts. I just recently decided to part ways with the Bruce Fund, in part for the purpose of consolidating accounts. The redemption check arrived quickly enough via the USPS, but BOA has placed a 10-day hold on my deposit. Shades of “Hotel California.” Needless to say, investing in a boutique MF company that has no presence in the fund supermarkets has its drawbacks.
Matthews Emerging Asia (MEASX), on the other hand, has had a harder time with three lean years and a couple years of outflows, though the management team has remained unchanged.
I had a chance to chat with some of the Matthews reps. They're a bit concerned that headlines ("Exodus!") will override the substance of the stories: a couple really good managers (and their seconds) moved took plum positions elsewhere, a less excellent manager might have been replaced, and cancelled business initiative in China might have displaced another, all of which is pretty normal in the industry. They admitted to not knowing much about the administrative departure, but promised to try to find out.
For what that's worth,
David
In addition, losing someone like Tiffany, who is a great fit for a firm like Matthews, is quite shocking. How did they not retain her? And why did they all leave at the same time? 5 PM departures in the span of 5 months, and all of them were up-and-coming PMs. Dare I say next generation leaders.
Lastly, executives departing < 15 months is weird. I have long been investing in boutiques, and can tell you this is not normal at all. I get retreating from China, but surely a COO does more than just china expansion, no? If not, why did they hire them?
That against the backdrop of huge outflows...something smells funny. Either these departures are just shockingly coincidental, or something seems broken internally. And yes, MEGMX seems to be off to a roaring start, however, Mr. Zhang was a co-lead on that and he just left. So, how does one think of that performance without him there? Worst case scenario: he was the driver of much of the returns! Regardless, I try and not get too excited with such a short track record. There are alot of good emerging markets managers, Baillie Gifford and Ashmore are two from Europe that have been building good track records over here.
I like Baillie Gifford as an investment firm.
The firm is privately owned, their funds are team-managed with reasonable expenses, and fund performance is often good. I previously owned BGEGX via Fidelity. I believe Baillie Gifford's distribution agreement with Fidelity has lapsed. Baillie Gifford is a subadvisor for several Vanguard funds although I don't believe they are the sole subadvisor for any of these funds.