Matthews India Active ETF (INDE)

Overview

The specified company operates a fund that predominantly concentrates on investments linked to India. This fund's primary strategy revolves around allocating at least 80% of its net assets, which encompasses borrowings designed for investment purposes, into a spectrum of securities. These securities include common stocks, preferred stocks, and convertible securities of varying durations and credit qualities. The fund is poised to invest in securities that are unrated or would be classified as below investment grade, commonly known as "junk bonds." It targets companies situated in India, navigating through the complexities of the Indian market to derive value for its investors. The fund characterizes itself as non-diversified, suggesting a focused investment approach in a specific geographical and economic zone, rather than spreading its investments across multiple regions or sectors.

Products and Services

• Common Stocks

  The fund commits a significant portion of its portfolio to common stocks of companies based in India. Common stocks represent shares of ownership in a company and entitle holders to vote at shareholder meetings and receive dividends. The selection of common stocks is premised on potential growth and value creation in the burgeoning Indian market, aiming to capitalize on the economic dynamics and growth prospects of selected companies.

• Preferred Stocks

  Another key component of the fund's investment strategy is the allocation of assets into preferred stocks. Preferred stocks are a type of stock which generally provides a fixed dividend, paid out before any dividends are paid to common stockholders. This type of investment appeals to those seeking income along with a higher claim on assets and earnings than common stockholders should the company be liquidated. The investment in preferred stocks of Indian companies seeks to leverage stable income streams while potentially benefiting from market growth.

• Convertible Securities

  Convertible securities constitute a significant strategy within the fund's portfolio, blending the features of bonds and common stocks. These instruments can be converted into a predetermined number of a company's common stock or cash of equal value, at the choice of the investor, typically at a specified time. The inclusion of convertible securities aims at providing the fund's investors with the flexibility to participate in the equity appreciation of the issuing company while also offering a fixed income characteristic of bonds. This strategy is particularly leveraged to optimize the balance between risk and reward in the volatile Indian market environment.

• Junk Bonds

  The fund does not shy away from high-risk, high-reward investments, notably in junk bonds. Junk bonds are issued by companies considered to be of lower credit quality, carrying a higher risk of default than investment-grade bonds but offering higher interest rates to compensate for this risk. By including junk bonds of Indian companies in its portfolio, the fund aims to achieve higher income and the potential for significant capital appreciation, albeit at a higher risk. This strategy is indicative of the fund's aggressive investment stance to maximize returns through calculated risks in the Indian market.