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Emerging Markets Via MAPIX

Long-Short Manager profile picture
Long-Short Manager


  • Previous articles on Emerging Markets have found favorable prospective long-term returns, particularly in Asia.
  • I have discussed the benefits of choosing well-run active funds in this space over ETFs, which can have oversized exposure to trade wars or overpriced tech darlings.
  • This article recommends one such fund, Matthews Asia Dividend Fund, based on its exposure to domestic consumption growth and value approach.


Based on Shiller PE, along with a hold of other short-term valuation metrics, including current PE, PS and PB ratios, many emerging markets (EM) and some developed markets are at about a 50% sale price relative to the US.

Source: PE Map & Table

While in the past, I have cautioned against jumping into emerging markets such as Greece or Turkey, where currency volatility or government finances leave much to be desired, a closer look at the full list above shows that a number of countries with sound budget and current account policies, much higher levels of expected economic growth than the US over the next 5-10 years, are significantly cheaper than US markets, even after October's correction.

While my prior articles pointed out parts of EM that were starting to look interesting, in this article, I'd like to recommend one actively managed mutual fund, Matthews Asia Dividend Fund (MUTF:MAPIX) that has met my needs for over a decade, that is a core part of my international exposure, and is well worth the management expenses.

My Criteria

In a world where I see a lot of overvaluation in many different sectors and regions, market-cap weighted index investing seems dangerous over the next 5-10 years. Additionally, I believe that in Asia in particular, long-term profit growth will accrue disproportionately to companies that meet the needs of the growing middle classes in those regions. Focusing on such companies has the added benefit that such companies will be relatively immune to whatever trade-related actions the current administrations MAGA policies take.

Therefore, I looked for an Asia-Pacific-focused fund, that took company governance, valuations and sustainability of profit margins all into account, and favored companies that were much more exposed to the domestic developing middle classes of those regions rather than exporting companies in the commodities or industrial

This article was written by

Long-Short Manager profile picture
I run two funds, one a diversified global income fund targeting about a 4-4.5% annual withdrawal rate for life, and a long-short aggressive fund that is a global cross asset class fund.

Analyst’s Disclosure: I am/we are long MAPIX. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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