“While large state-owned enterprises have long dominated China’s investment universe, we are seeing small companies benefiting from the country’s shift to a market economy,” said Richard Gao, the lead manager of the fund. “Matthews has a long history of investing in China, and in our experience, investing in the initial stages of a company’s growth can be very rewarding. Small companies often provide opportunities for higher growth at lower valuations.”
The fund will invest in companies in China, Hong Kong and Taiwan with market capitalizations of less than $3 million. The number of publicly listed small companies in the region has nearly doubled in the past five years to more than 1,000. The new fund is Matthews’ third China-focused fund. The two existing funds centered on the region are the Matthews China and Matthews China Dividend funds.
“In our view, the world’s most populous country is an asset class in itself and affords the opportunity to pursue a variety of strategies,” said Matthews Chief Investment Officer Robert Horrocks. “We are excited to be able to offer a new strategy with which investors can access China’s rapidly expanding universe of small companies.”
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