Matthews Emerging Markets Equity Fund Investor Class Shares (MEGMX)

Overview

The fund referred to invests predominantly in emerging markets, aiming to achieve its investment objectives by allocating at least 80% of its net assets—including those obtained through borrowing for investment purposes—to both common and preferred stocks of companies based in these regions. It has a strategy that at times involves concentrating its investments, which means putting more than 25% of its assets into companies located in a single country, with a notable focus on China among others. This indicates a willingness to embrace both the high-growth potential and the increased risk associated with emerging markets and specific countries within them.

Products and Services

• Common and Preferred Stock Investments

  The fund primarily invests in the common and preferred stocks of emerging market companies. Common stocks offer ownership in a company and the potential for dividends and capital appreciation, while preferred stocks provide a fixed dividend but with less risk and volatility than common stocks. This dual approach allows the fund to aim for both growth through capital appreciation and income through dividends, adapting its strategy to the evolving opportunities within emerging markets.

• Emerging Market Focus

  With a strategic commitment to investing at least 80% of its assets in emerging markets, the fund targets regions that exhibit potential for rapid economic growth compared to more mature markets. These markets, however, come with higher risk due to political instability, currency fluctuations, and less transparent markets. The fund leverages in-depth research and local insights to navigate these risks, seeking to capitalize on the growth opportunities present in these dynamic regions.

• Concentrated Investments

  Occasionally, the fund chooses to concentrate more than 25% of its assets in businesses within a single country, like China. This concentration strategy can lead to higher volatility and risk due to the fund's exposure to the economic and political idiosyncrasies of that country. However, it also presents an opportunity for substantial returns if the selected country's market performs well. This approach reflects the fund's aggressive investment strategy, targeting potential high-reward outcomes from specific emerging markets.