Two small IPOs and three SPACs debuted this week, as the US government shutdown finally came to an end. Five IPOs and four SPACs submitted initial filings. Three deals are on the calendar for the week ahead.
We initiate coverage on Matthews Pacific Tiger Active ETF (ASIA) with a Sell rating. Our concerns about the fund include its high investment team turnover, significant exposure to China, and poor long-term absolute and relative performance. In light of these concerns, we're hard-pressed to find a reason for performance to improve.
| CXA Exchange | US Country |
The fund stands as a specialized investment vehicle, focusing squarely on the vast and diverse Asian market, excluding Japan. This strategic approach allows it to encompass a wide range of investment opportunities spanning developed, emerging, and frontier markets throughout Asia. Its investment mandate is clear: to allocate at least 80% of its net assets, which importantly includes any borrowings made for the purpose of investment, towards the acquisition of common and preferred stocks within its targeted geographical demarcation. This broad yet focused investment philosophy underpins the fund's objective to harness the dynamic economic landscape of Asia for potential growth and returns.
The fund offers a distinct range of investment products centered on the Asian excluding Japan equity markets. Each product is tailored to meet different investor needs, leveraging the fund's strategic focus and in-depth regional expertise.
The cornerstone of the fund's strategy lies in investing in common and preferred stocks of companies located within the Asian region, excluding Japan. This includes nations across all levels of economic development from burgeoning frontier markets to well-established economies. The broad selection criteria allow for a diversified portfolio that seeks to mitigate regional risks while capturing growth opportunities.
An integral part of the fund's investment approach involves leveraging borrowings to amplify its investment capabilities. This strategy is employed judiciously, aiming to enhance returns on equity investments within the prescribed operational framework. It reflects the fund's proactive stance on capitalizing on investment opportunities, albeit with a careful consideration of the associated risks.