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MACSX yield 3.03 and MAPIX yield 2.93. Why go with either as opposed to the other?
If you go to their web, site, they have a compare option where you can pu,t the discriptions side by side. Mapix invests in dividend paying equities. Macsx uses dividend paying securities and fixed income products like convertible bonds and corporate bonds.
In my view, macsx should be more flexible and able to adjust better to economic conditions. But hey, they both seem to be great conservative options for investing in Asia.
Pacific Tigers, MAPTX, is ex-Japan. I don't think MACSX was ever ex-Japan. In response to OP's question: I've not been able to figure that out. Perhaps MAPIX is less volatile if one's investing horizon is shorter/closer.
You can't put too much stock in the category or benchmark with these funds. MACSX says that its benchmark is MSCI All Country Asia ex Japan (and M* classifies it that way), while MAPIX says its benchmark is MSCI All Country Asia Pacific (and M* classifies it accordingly).
But, compare MSCI AC Asia ex Japan with the countries MACSX currently says it is focused on:
Index Fund China China HK HK India India Indonesia Indonesia Korea Korea Japan Malaysia Malaysia Pakistan Philippines Philippines Singapore Singapore Sri Lanka Taiwan Taiwan Thailand Thailand Vietnam
The point is that these funds will go where they want. That said, MACSX still invests a lot less in Japan than MAPIX.
Another difference is that MACSX includes convertible bonds as part of its charter (where it must put 80% of its portfolio). MAPIX also invests in convertible bonds, but only as part of the 20% it can play with outside of its principal strategy.
You asked about what MACSX used to do. All of what I wrote above is highlighted in the 2002 annual report.
M* quote in that 2002 report: "This fund [MACSX] is as conservative as they come in the Pacific/Asia ex-Japan category. For starters, Paul Matthews is the only manager in the group who readily considers convertible bonds, and he normally invests one to two thirds of the portfolio in these tame securities."
And back then, the fund's portfolio included: China/HK, Indonesia (0.63%), Singapore, Korea, Thailand (and bonds in Taiwan). Quite a bit different from now, where it has significant equity in all the target countries (plus Australia), except for India/Pakistan and Sri Lanka.
Reply to @MaxBialystock: Ah. I own a little bit left of it, but I haven't looked at the details on the website in two or three years. One of the few funds that I don't feel the need to watch more closely.
Lots of work, thought and information. And CLEARLY expressed. MACSX is still about the most conservative Asia fund you can find? I thought so. MACSX has a much longer history than MAPIX. Morningstar rates MACSX at the moment much lower/stinkier than MAPIX, however.
Per your post, it appears you are also attempting to compare the dividend, and/or are focused on the dividend.
Keep in mind that this is not neccessarily a compartive tool for these or other funds. As the underlying values of the equity holdings of these funds change; so will the dividend.
I recently sold all of MACSX and reinvested most in MAPIX. I just did not feel addiitonal fund was giving me substantial different exposure anymore. Also, during the period that both funds existed, MAPIX did better and has better Sharpe ratio, etc.
Ya, well, I kinda hogtied myself. I got 11 X more in MAPIX than MACSX, and MACSX is our only regular, normal, taxable, ordinary investment in mutual funds. we "raid" MACSX for vacations and unpleasant surprises. I still like the very low volatility in MACSX. Volatility in MAPIX isn't such a big problem, anyhow. I'm not about to pull the plug on MACSX cuz I'm already right at the moment way too concentrated. Two funds, just TWO--- hold 75.58% of my total. (MAPIX and PREMX.) I'm looking to EXPAND the number of funds I own.....Incidentally, the latest on M* shows MAPIX with 27.44% in Japan, and MACSX with 13.74%. "Asia-ex Japan?" Not any more...... I caught a video interview last week at Bloomberg. Woman saying in 2012 it will be China, Japan and Taiwan which will outperform compared to other Asian countries.
Reply to @Investor: as mentioned before, i have done the same at the end of December. As the Murphy law would have it, YTD MACSX is handily outperforming MAPIX -- probably for the first time in their combined history. -:)
Though figures show long term performance of MAPIX to be better, there have been significant (one year) periods where MACSX has outperformed. 2007 (21.54% to 18.05%), and 2nd quarter 2010 through 1st quarter 2011 (14.59% to 11.75%). In these four quarter spans, MACSX outperformed each calendar quarter (which is why this was so easy to spot).
In 2011, MAPIX barely outperformed MACSX (-10.02% vs -10.62%). Starting from 2nd quarter 2010 to Jan 27, 2011 (7 quarters plus a month), the cumulative performance of each has been 7.74% (MACSX) to 5.24% (MAPIX).
It's all in how one picks the time frames, when looking at short term performance (even over nearly two years).
"As we enter the Year of the Dragon, worries over a drawn-out resolution to Europe’s debt crisis and a slowdown in China’s economic growth, will likely continue. While Asian equity markets on the whole look cheap compared to history, it masks the fact that companies with better structural growth prospects, stronger balance sheets and less volatile business models—such as consumer staples, health care and utilities—now trade at a significant premium to the market’s more cyclical components. Given our ongoing underweight to cyclical businesses, this does pose a risk to the Fund in terms of relative performance, vis-à-vis its benchmark, should the equities of cyclical businesses experience a rally. That said, we are committed to our basic investment philosophy despite the risk of temporary relative underperformance. We will continue to invest in companies that we believe offer our investors an attractive combination of income and dividend growth. From that perspective, we believe companies in Asia continue to deliver on both."
Obviously, these are both great funds, and one cannot go wrong owning either or both.
Like you stated, the yield difference is a wash. The AUM and expense ratios are also a wash (MAPIX: $2.3B, 1.14%; MACSX $2.9B, 1.13%).
Concerning standard deviations/sharpe ratios over the past 1-, 3-, and 5-year periods, MAPIX (12.76/-0.77, 16.66/1.06, 17.88/0.41) has more attractive values than MACSX (13.22/-0.79, 15.12/0.97, 17.56/0.26).
MAPIX has a lower average market cap of $4.58B compared to MACSX's $6.97B, and their M* portfolio x-rays indicate that MAPIX has greater exposures to MC/SC as follows:
MAPIX:
LC: 20/22/13 MC: 16/12/7 SC: 4/4/1
MACSX:
LC: 29/32/14 MC: 8/8/5 SC: 4/0/0
Finally, during the period of Q1 2007 through Q4 2011, MAPIX has had more attractive Upside/Downside capture ratios (relative to ADRA) of 107/51 compared to 88/49 for MACSX. ADRA is not a perfect ETF for comparison, but it was the best ETF I could find having a long record.
Bottom line: if I had to choose between these two beauties, I would buy MAPIX.
Let me reiterate and amplify a point (that MikeM made as well) - MACSX is not a pure equity fund. If I had to classify/analogize it, I would call it Aggressive Allocation (70-90% equity), and analogize it to TRowePrice Cap App PRWCX.
The traditional (before last manager change) PRWCX kept a healthy slug (over 20%) in convertibles. Currently, it's still got over 20% in bonds and convertibles, but the vast majority of that is in nonconvertible bonds. (If you want to see what a "traditional" PRWCX portfolio looked like, take a look at Prospector Cap App PCAFX, which is run by Richard Howard, who managed PRWCX from 1989 to 2001.) PRWCX is a moderate allocation fund; I put MACSX into the aggressive allocation camp as it seems to keep a few percent less in convertibles (and a smidgeon of nonconvertible bonds).
Like PWRCX, I think its reliance on convertibles makes it unique in its space. Whether that's something you want or not is a different story.
Regarding its holdings in Japan - M* got it wrong, or at least misleading. M* reported 13.74% in Japan (see Max's post above). But that's the percentage of the equity in Japan (as of 9/30), not the percentage of the portfolio in Japan. Only 78.1% of the portfolio was in equities. And none of the convertibles or bonds were Japanese. So the actual Japanese percentage was 10.8% (per Matthews, or you can just compute 13.74% x 78.1% yourself).
M* says that it partially counts convertibles toward equity (that's in the PCFAX analyst report). But even if it did this, it would still be overstating MACSX's Japan weight. And it doesn't even seem to do this (unless the weight it accords convertibles toward equity is about 5% of their value).
The other part of the problem with this figure is that it represents a high point in Japanese holdings, and does not appear to be average. The current position (12/31) has dropped from 10.8% to 8.3%. For example, Hisamitu Pharma (which Matthews highlighted in its 3Q report), a multinational benefiting from sales in emerging Asia and the rest of the world, grew to become 3.8% of the portfolio in Q3 (from 2.8% the previous quarter). But by the end of Q4, it was back down to 3.1% of the portfolio.
Japanese portion of the portfolio (not just equity), quarter by quarter (2011) Q1: 9.4% Q2: 9.9% Q3: 10.8% Q4: 8.3%
(By contrast, MAPIX had 20.6%, 21.1%, 27.0%, and currently 25.8%). M* calls a fund with under 10% in Japan an Asia/Pacific ex-Japan fund.
MAPIX is 95%+ equity, vs 80%- for MACSX. Different asset allocation, different attention to Japan. These are not funds investing the same way. No more so than PRWCX and TRowePrice Div Growth (PRDGX), the latter of which has a yield about 1/10% less than PRWCX (just as MAPIX's yield is about 1/10% less than MACSX), and is slightly growthier (just as MAPIX is slightly growthier than MACSX). The TRP funds sit in different categories because they approach investing differently.
msf: that's very clear, very interesting. And very accurate. THANKS for being so precise and focused. I'm planning to continue to hold BOTH. I appreciate all the responses. Matthews is the best we'll find for Asia. I figured it would be good to look again at what's there.
FWIW,i am looking to add the new Seafarer's growth and income fund once it is available.This is expected to be a diversified EM version of MACSX. This fund is starting on Feb 15th.
I second your praise for msf. He is very informative and precise, as always. Always read his posts and almost always learn some details and subtleties I have overlooked.
On the equities portion of MACSX (Growth & Income) --- it reminds me of a cross or blend between MAPIX and MAPTX based on the type of stocks I see and the country allocations.
Reply to @scott: I cannot bring myself to settle for any sort of generic, milquetoast thing, if you know what I mean. As mentioned below, with a bunch of new money expected soon, I'm leaning toward adding the new Seafarer fund--- Andrew Foster's. I certainly WILL be adding DODIX to go along with my PREMX. My only domestic equity holding at this moment is PFE Pfizer. I plan to add MSCFX Mairs & Power small-cap, out of Twin Cities. I like small-caps. That fund is rather new. I figure to buy-in while the share price is still quite low. I see that M & P does NOTHING rashly or quickly. I am attracted to that pedigree. If there's any leftover, BERIX is on my list.
Reply to @MaxBialystock: I don't understand, after learning so much about mutual funds, why you look at the absolute values of NAV price or dividends in dollars. In mutual fund world, these absolute values mean very little. Forget the fund has a price. Look at what is the percentage change, what is the percent dividend, in particular what is the percent total return.
In particular starting fund NAV is an arbitrary price. $10/share typical to get it going.
Reply to @msf: Thanks for the detailed analysis. But despite different investment strategies over the co-existance of both funds they managed to provide very similar portfolio characteristics. I personally think there is not enough difference to add to the diversification to my overall portfolio.
Thus, after much deliberation, I decided to get rid of MACSX.and move monies to MAPIX. In the short time since then MACSX is doing better with bigger Chinese equities exposure and rally of such equities.
I believe while convertibles had provided a good performance for MACSX and also allowed reduced volatility, the convertible market in Asia is not as much discounted as it used to be so I am not sure at this time. Also, just like Convertible bonds are providing an indirect equity participation in emerging Asian markets, Japan equities are also providing such indirect exposure too. Both are helping reduce the volatility of emerging market equities. So, the classification might not be correct but end result is remarkably similar.
Reply to @Investor: I suppose I'm not even trying to be so very precise. When I speak of a low share price in dollars, I'm just reflecting its newness in this case. I certainly do look at total return, I notice (on funds with longer history) "downside capture," yield, risk/reward. Whether or not a fund follows the pack or is out in front... all that stuff. I'm aware. Fear not, "grasshopper." I've learned a LOT in here.
Comments
In my view, macsx should be more flexible and able to adjust better to economic conditions. But hey, they both seem to be great conservative options for investing in Asia.
In response to OP's question: I've not been able to figure that out. Perhaps MAPIX is less volatile if one's investing horizon is shorter/closer.
But, compare MSCI AC Asia ex Japan with the countries MACSX currently says it is focused on: The point is that these funds will go where they want. That said, MACSX still invests a lot less in Japan than MAPIX.
Another difference is that MACSX includes convertible bonds as part of its charter (where it must put 80% of its portfolio). MAPIX also invests in convertible bonds, but only as part of the 20% it can play with outside of its principal strategy.
You asked about what MACSX used to do. All of what I wrote above is highlighted in the 2002 annual report.
M* quote in that 2002 report: "This fund [MACSX] is as conservative as they come in the Pacific/Asia ex-Japan category. For starters, Paul Matthews is the only manager in the group who readily considers convertible bonds, and he normally invests one to two thirds of the portfolio in these tame securities."
And back then, the fund's portfolio included: China/HK, Indonesia (0.63%), Singapore, Korea, Thailand (and bonds in Taiwan). Quite a bit different from now, where it has significant equity in all the target countries (plus Australia), except for India/Pakistan and Sri Lanka.
Yes, it's SUPPOSED to be....
Per your post, it appears you are also attempting to compare the dividend, and/or are focused on the dividend.
Keep in mind that this is not neccessarily a compartive tool for these or other funds.
As the underlying values of the equity holdings of these funds change; so will the dividend.
Regards,
Catch
Though figures show long term performance of MAPIX to be better, there have been significant (one year) periods where MACSX has outperformed. 2007 (21.54% to 18.05%), and 2nd quarter 2010 through 1st quarter 2011 (14.59% to 11.75%). In these four quarter spans, MACSX outperformed each calendar quarter (which is why this was so easy to spot).
In 2011, MAPIX barely outperformed MACSX (-10.02% vs -10.62%). Starting from 2nd quarter 2010 to Jan 27, 2011 (7 quarters plus a month), the cumulative performance of each has been 7.74% (MACSX) to 5.24% (MAPIX).
It's all in how one picks the time frames, when looking at short term performance (even over nearly two years).
"As we enter the Year of the Dragon, worries over a drawn-out resolution to Europe’s debt crisis and a slowdown in China’s economic growth, will likely continue. While Asian equity markets on the whole look cheap compared to history, it masks the fact that companies with better structural growth prospects, stronger balance sheets and less volatile business models—such as consumer staples, health care and utilities—now trade at a significant premium to the market’s more cyclical components. Given our ongoing underweight to cyclical businesses, this does pose a risk to the Fund in terms of relative performance, vis-à-vis its benchmark, should the equities of cyclical businesses experience a rally. That said, we are committed to our basic investment philosophy despite the risk of temporary relative underperformance. We will continue to invest in companies that we believe offer our investors an attractive combination of income and dividend growth. From that perspective, we believe companies in Asia continue to deliver on both."
Obviously, these are both great funds, and one cannot go wrong owning either or both.
Like you stated, the yield difference is a wash. The AUM and expense ratios are also a wash (MAPIX: $2.3B, 1.14%; MACSX $2.9B, 1.13%).
Concerning standard deviations/sharpe ratios over the past 1-, 3-, and 5-year periods, MAPIX (12.76/-0.77, 16.66/1.06, 17.88/0.41) has more attractive values than MACSX (13.22/-0.79, 15.12/0.97, 17.56/0.26).
MAPIX has a lower average market cap of $4.58B compared to MACSX's $6.97B, and their M* portfolio x-rays indicate that MAPIX has greater exposures to MC/SC as follows:
MAPIX:
LC: 20/22/13
MC: 16/12/7
SC: 4/4/1
MACSX:
LC: 29/32/14
MC: 8/8/5
SC: 4/0/0
Finally, during the period of Q1 2007 through Q4 2011, MAPIX has had more attractive Upside/Downside capture ratios (relative to ADRA) of 107/51 compared to 88/49 for MACSX. ADRA is not a perfect ETF for comparison, but it was the best ETF I could find having a long record.
Bottom line: if I had to choose between these two beauties, I would buy MAPIX.
Kevin
The traditional (before last manager change) PRWCX kept a healthy slug (over 20%) in convertibles. Currently, it's still got over 20% in bonds and convertibles, but the vast majority of that is in nonconvertible bonds. (If you want to see what a "traditional" PRWCX portfolio looked like, take a look at Prospector Cap App PCAFX, which is run by Richard Howard, who managed PRWCX from 1989 to 2001.) PRWCX is a moderate allocation fund; I put MACSX into the aggressive allocation camp as it seems to keep a few percent less in convertibles (and a smidgeon of nonconvertible bonds).
Like PWRCX, I think its reliance on convertibles makes it unique in its space. Whether that's something you want or not is a different story.
Regarding its holdings in Japan - M* got it wrong, or at least misleading. M* reported 13.74% in Japan (see Max's post above). But that's the percentage of the equity in Japan (as of 9/30), not the percentage of the portfolio in Japan. Only 78.1% of the portfolio was in equities. And none of the convertibles or bonds were Japanese. So the actual Japanese percentage was 10.8% (per Matthews, or you can just compute 13.74% x 78.1% yourself).
M* says that it partially counts convertibles toward equity (that's in the PCFAX analyst report). But even if it did this, it would still be overstating MACSX's Japan weight. And it doesn't even seem to do this (unless the weight it accords convertibles toward equity is about 5% of their value).
The other part of the problem with this figure is that it represents a high point in Japanese holdings, and does not appear to be average. The current position (12/31) has dropped from 10.8% to 8.3%. For example, Hisamitu Pharma (which Matthews highlighted in its 3Q report), a multinational benefiting from sales in emerging Asia and the rest of the world, grew to become 3.8% of the portfolio in Q3 (from 2.8% the previous quarter). But by the end of Q4, it was back down to 3.1% of the portfolio.
Japanese portion of the portfolio (not just equity), quarter by quarter (2011)
Q1: 9.4%
Q2: 9.9%
Q3: 10.8%
Q4: 8.3%
(By contrast, MAPIX had 20.6%, 21.1%, 27.0%, and currently 25.8%). M* calls a fund with under 10% in Japan an Asia/Pacific ex-Japan fund.
MAPIX is 95%+ equity, vs 80%- for MACSX. Different asset allocation, different attention to Japan. These are not funds investing the same way. No more so than PRWCX and TRowePrice Div Growth (PRDGX), the latter of which has a yield about 1/10% less than PRWCX (just as MAPIX's yield is about 1/10% less than MACSX), and is slightly growthier (just as MAPIX is slightly growthier than MACSX). The TRP funds sit in different categories because they approach investing differently.
I second your praise for msf. He is very informative and precise, as always.
Always read his posts and almost always learn some details and subtleties I
have overlooked.
Similar beta, SD, sharpe ratio, and r-squared
http://www.gurufocus.com/news/159668/heart-of-china-bull-beats-strong
Heart of China Bull Beats Strong
I cannot bring myself to settle for any sort of generic, milquetoast thing, if you know what I mean. As mentioned below, with a bunch of new money expected soon, I'm leaning toward adding the new Seafarer fund--- Andrew Foster's. I certainly WILL be adding DODIX to go along with my PREMX. My only domestic equity holding at this moment is PFE Pfizer. I plan to add MSCFX Mairs & Power small-cap, out of Twin Cities. I like small-caps. That fund is rather new. I figure to buy-in while the share price is still quite low. I see that M & P does NOTHING rashly or quickly. I am attracted to that pedigree. If there's any leftover, BERIX is on my list.
In particular starting fund NAV is an arbitrary price. $10/share typical to get it going.
Thus, after much deliberation, I decided to get rid of MACSX.and move monies to MAPIX. In the short time since then MACSX is doing better with bigger Chinese equities exposure and rally of such equities.
I believe while convertibles had provided a good performance for MACSX and also allowed reduced volatility, the convertible market in Asia is not as much discounted as it used to be so I am not sure at this time. Also, just like Convertible bonds are providing an indirect equity participation in emerging Asian markets, Japan equities are also providing such indirect exposure too. Both are helping reduce the volatility of emerging market equities. So, the classification might not be correct but end result is remarkably similar.
I suppose I'm not even trying to be so very precise. When I speak of a low share price in dollars, I'm just reflecting its newness in this case. I certainly do look at total return, I notice (on funds with longer history) "downside capture," yield, risk/reward. Whether or not a fund follows the pack or is out in front... all that stuff. I'm aware. Fear not, "grasshopper." I've learned a LOT in here.
Thank you for the article! I thought it was very insightful and makes a lot of sense to a lay-person like myself.
I continue to invest in EM with half invested in Asia. I'm convinced that the next decade will be profitable, albeit, will several peaks and valleys!!
Continued happy investing to all.