It wasn't that long ago that Asian economies could do no wrong, what with their double-digit growth rates, expanding middle classes and legions of educated young people eager to spend.

Now that these onetime firecrackers have mellowed out, however, the key question for managers is how to approach Asia now. Robert Horrocks and Kenny Lowe, managers of the $4.1 billion Matthews Asian Growth & Income (MACSX) fund, believe the region still has great promise. The factors that drove the region's explosive growth earlier in the century are still at play, Horrocks says: high savings rate, improving educational systems and openness to new ideas. "Asia has that in spades," Horrocks says.

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