Portfolio Management
Asia-Pacific markets saw a jolt of euphoria on the last trading day of October after the Bank of Japan announced it would be ramping up its ongoing stimulus measures in an effort to spur economic growth in the country. The Federal Reserve-like liquidity pump announcement is still resonating well among investors overseas, which is why this week we’re turning our spotlight to a mutual fund focused on opportunities across Asian markets.
Given the export-heavy nature of most economies in the region, namely Japan, the recent stimulus announcement should serve as a tailwind as it offers strength for the U.S. dollar; this should in turn increase consumption of foreign goods, which would drive up the profits of exporters, especially Japanese firms with a global presence.
In light of the central bank-induced euphoria in the region, this week we will be focusing on foreign equities by taking a look at the Matthews Asia Growth Fund (MPACX) – our fund of the week for November 12.
Inside the Fund
The Matthews Asia Growth Fund was launched in October of 2003 and is managed by Taizo Ishida. The fund currently has approximately $862 million in assets under management (AUM).
The fund features exposure to all countries and markets in Asia, including developed and emerging nations. With that being said, over 40% of the fund’s asset are allocated to Japanese stocks, with China accounting for the second largest allocation at around 15%.
Historical Performance
| 2010 | 2011 | 2012 | 2013 | YTD |
|---|---|---|---|---|
| 26.85% | -12.70% | 17.47% | 19.35% | 5.01% |
Matthews Asia Growth Fund’s Largest Holdings
This fund is fairly well-balanced seeing as how the top five holdings account for less than 20% of total assets. In terms of sectors, MPACX is heavily skewed towards consumer-focused stocks, with staples and discretionary companies each accounting for 20% of total assets.
| Ticker | Stock | Portfolio Weight | YTD Performance |
|---|---|---|---|
| TOYOF | Toyota Motor Corp | 4.94% | 8.30% |
| ORXCF | Orix Corp | 4.74% | -13.90% |
| SSMXF | Sysmex Corporation | 2.65% | 56.55% |
| SFTBF | SOFTBANK Corp | 2.43% | -13.90% |
| MBFJF | Mitsubishi UFJ Financial Group Inc | 2.41% | -6.59% |
The Bottom Line
This fund offers a fairly well-balanced portfolio for anyone looking to access Asian markets. The fund’s bias towards Japan might make it more appealing to conservative investors who are otherwise wary of dipping their toes in neighboring emerging markets. This fund warrants a closer look from anyone looking to favorably position themselves in anticipation of continued strength across Asian markets.
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