Download - Gl.pt006 montreux0511.final
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Seeking Dividends from Asia’s Growth
Robert Horrocks, PhD
Chief Investment Officer
May 2011
Performance results, portfolio characteristics, and holdings information in this presentation are of the largest accounts managed by Matthews International Capital Management LLC. The Performance results are net of advisory and other fees.
Performance results and valuations presented are in U.S. dollars. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. The standard fees are described in Part II of Matthews Form ADV. All performance is in US $ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees.
Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Please see important disclosures at the end of this presentation.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Matthews Overview
About Matthews
Largest dedicated Asia investment specialist in
the United States
Investing in Asia since 1991 through a variety
of market environments
Independent, privately owned firm with significant
employee ownership
Range of Asia investment strategies across the
risk-reward spectrum
Offering a unique investment perspective from a strategic
location in San Francisco
1
KEY FACTS
As of 31 March 2011
Total assets under management$18.1 billion
Regional strategies$13.8 billion
Single-country strategies$ 4.3 billion
Investment team members25
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Matthews History
2
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1991G. Paul Matthewsfounds MatthewsInternational CapitalManagement 1994
Matthews Asiaintroduces Asia ex-Japan and Asian Growth & Income
1998China inception
1998Japan inception
2003Asia Growth
inception
2005India inception
2008Asia Small Companies
inception
2006Asia Dividend inception
1999Asia Science and Technology inception
1995Korea inception
1992Firm launches an investment vehiclefor the Asiaex-Japan region
Matthews has chosen to launch new strategies when there are compelling investment opportunities
2009China Dividend
inception
2010Matthews Asia
introduces off-shore funds for non-U.S.
investors
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Strategies for Investing in Asia
Matthews Asia offers a range of strategies across the risk-reward spectrum
3
Regional strategy designed for use as a core portfolio holding
Asian Growth and Income
Asia Dividend*
China Dividend
ASIA GROWTH AND INCOME
Asia Growth
Pacific Tiger*
ASIA GROWTH
Asia Science and Technology
ASIA SPECIALTY
Asia Small Companies
ASIA SMALL COMPANY
China*
India
Japan
Korea
Asian strategy designed to complement core portfolio holding
* Strategy currently available as a Luxembourg-domiciled SICAVClosed to most new investors
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Investment Philosophy and Approach
Active management
We believe many of the region’s widely used indices are backward looking and are not representative of the
industries and companies that will be successful in the future. We look to invest in companies whose
potential has yet to be fully recognised by the market.
Long-term focus on Asia
We believe a long-term approach is the most effective way to capitalise on Asia’s evolution. Matthews has
been investing in Asia since 1991 and we draw on our experience to identify companies that stand to benefit
from the growth and development of markets throughout the region.
Bottom-up research
We employ a fundamental, bottom-up investment process that seeks to identify companies with sustainable
long-term growth prospects, strong business models, quality management teams and reasonable valuations.
This research process involves more than 1,800 company meetings each year.
Defining Asia’s investment strategies
We strive to provide investors a range of Asia strategies across the risk-reward spectrum and launch new
strategies when there are compelling investment opportunities in the region.
The foundation of Matthews’ investment philosophy is our belief in the long-term economic growth and development of the countries in Asia.
4
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
5
The Value of the Pit Stop:
Commonalities between Grand Prix racing and dividend investing
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Dividends—Like a Well-executed Pit Stop—are Critical to Investment Performance
Dividends demonstrate discipline in the management of a business and the allocation of capital
Dividends serve as a means of realising tangible value in an investment
Dividends provide a signal that the interests of minority shareholders are valued by management
6
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
7
Why Dividends Matter: A Case Study
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Decides on No Pit Stop
Seems about to win World Championship, then tire blows up
8
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Going Too Fast, Too Soon
Dividends put a brake on reckless spending and may signal future growth
9
QUINTILE 1 QUINTILE 2 QUINTILE 3 QUINTILE 4 QUINTILE 5
Payout 109.3 55.4 35.9 21.2 7.0
Trailing yield 5.3 3.4 2.6 2.1 1.3
Next 3-yr EPS Growth
14.9 7.7 8.5 (1.2) 7.8
Source : CLSA. Data represents 10 year average (1997-2006) payout , trailing yield and forward 3-year EPS Growth for companies in CLSA’s Asia ex Japan universe.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Reverses in Pit Lane While Own Crew Blocking the Way
Disqualified from race
10
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Corporate Governance
Dividends and corporate governance at the country level
11
Country Dividend YieldCorporate Governance Rank
Singapore 2.7 1
Hong Kong 1.9 2
Japan 1.6 3
Taiwan 3.0 4
Thailand 2.4 4
Malaysia 2.4 6
China 1.1 7
India 1.0 7
South Korea 1.3 9
Indonesia 1.5 10
Philippines 1.4 11
Source: FactSet. Note: Dividend yield represents the average 5 year dividend yield for the period 1/1/2006-31/12/10 and includes companies with market capitalizations of US$5B and over. ACGA Corporate Governance Rank as of September 2010, CLSA.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
The Impact of Dividends on Long-term Returns
12
For periods 31/12/87–31/12/10. The MSCI All Country Asia Pacific Index is a free float-adjusted, market capitalisation-weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand. It is not possible to invest directly in an index.
Sources: MICM, MSCI
GROWTH OF $10,000 FOR THE MSCI ALL COUNTRY ASIA PACIFIC INDEX
$5,000
$7,000
$9,000
$11,000
$13,000
$15,000
$17,000
$19,000
$21,000
$23,000
$25,000
87 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
DIVIDENDS REINVESTED
PRICE INDEX
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Wheel is not Put on Properly in Pit Stop
Disqualified from race
13
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Signal vs. Noise
Dividends as representation of sustainable core earnings growth
14
EARNINGS AND DIVIDENDS OF COMPANIES IN ASIA PACIFIC*
*MSCI AC Asia Pacific Index members as of 30/06/10. To be included these companies must have had an average operating income during the three previous fiscal years of a minimum of US$50 million. Companies must also have a ten year financial history.Sources: Matthews, FactSet and Bloomberg
$0
$50
$100
$150
$200
$250
$300
$350
$400
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
US$
B
TOTAL EARNINGS
TOTAL DIVIDENDS
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Dividends and Volatility
Dividends may help to reduce volatility
15
Dividend Yield
Volatility
Quintile 1 0.3 7.2
Quintile 2 0.8 7.4
Quintile 3 1.4 5.3
Quintile 4 2.4 4.7
Quintile 5 5.2 4.2
Note: Dividend yield and volatility for companies in Asia ex Japan with market capitalizations of US$5B and over. Average five year dividend yield for the period1/1/2006-31/12/10. Average volatility of stocks in each quintile as expressed by quarterly price changes over a five year period (1/1/2006–31/12/10). Source: FactSet
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
What This Equates to for Investors
16
No pit stop—Overdoing it and trying to go too fast
Ignoring the crew—Improper alignment of minority shareholders and management
Poor technical skills—Lack of value and sustainability of the business
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
17
Asia’s Dividend Universe and Portfolio Management
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
China (MSCI China Index)
Asia (MSCI AC Asia Pacific Index)
U.S. (S&P 500 Index)
Dividends—How Asia Compares to the U.S.
18
$59
$195
Size of Dividend Pool
$212
18%
16%
6%
Dividend Growth
Sources: Factset, MSCI, I/B/E/S, JPMorgan, S&P
*As of 2009.**Dividend growth for MSCI China is derived using index members as of 31/12/05 for improved index representation; for reference S&P 500 andMSCI Asia Pacific Index members grew dividends at 1% CAGR and 10% CAGR, respectively, during the same period.All performance quoted represents past performance and is no guarantee of future results. It is not possible to invest directly in an index.
(Bil US$)* 2002-2009**
3.0%
2.7%
1.9%
Dividend Yield
(as of 2/2011)
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Asia’s Dividend-Paying Universe has Grown
19
1998 US$B 2009 US$B
Japan 18.9 Japan 58.7
Australia 8.7 China 43.2
Hong Kong 7.4 Australia 38.1
Taiwan 1.9 Hong Kong 33.1
Singapore 1.7 Taiwan 20.9
Other 5.3 Other 56.6
Total 43.9 Total 250.6
Data represents Asia Pacific dividend-paying stock universe with market cap over US$100 million as of end of 1998 and 2009 respectively.
Sources: FactSet, MICM
Note: Excluding China A-share market.
Two-thirds of dividends paid within China/Hong Kong in 2009 from companies listed after 1998
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Crossing the Finish Line Implementing a dividend focused total return strategy
20
-10%
0%
10%
20%
30%
40%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%
3-Y
EA
R D
IVID
EN
D G
RO
WT
H
DIVIDEND YIELD
60%
100% PAYOUT RATIO
Red 80+%
Amber 50-80%
Blue 30-50%
Green 0-30%
Dividend yield and dividend growth data depicted are for all securities held in the largest account managed by Matthews using anAsia Dividend Strategy. Each point represents a plotting of the portfolio company’s trailing dividend yield as of 02/03/11 and its 3-year annual dividend growth rate based on MICM estimates. Color depiction represents a portfolio company’s dividend payout ratiobased on company dividend policy, if available. Otherwise 5-year average payout ratio is utilised (or longest available for companies with less than 5-year history) adjusted for extreme temporary outliers. There is no guarantee that the companies in the portfolio will achieve their forecasted dividend growth rates, maintain or grow their dividend pay-out ratio, or pay dividends. Source: MICM
DIVIDEND YIELD VS. DIVIDEND GROWTH
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
21
Matthews Asia Dividend Strategy
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Profile | Asia Dividend Strategy
Investment Objective
Total return with an emphasis on providing current income.
Strategy
Seeks to provide a level of income that is higher than the yield
generally available in Asia equity markets over the long term.
Invests primarily in companies that are paying high dividends
relative to their current share price, or are well positioned to do so
in the future.
Lead Manager Co-Manager
22
STRATEGY FACTS
Inception Date31/10/06
Cap RangeAll Cap
Number of Holdings50 to 80
Turnover Range20% to 50%
BenchmarkMSCI All Country Asia Pacific Index
JESPER MADSEN, CFA YU ZHANG, CFA
There is no guarantee that portfolio companies held in the strategy will pay or continue to pay dividends.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Strategy | Asia Dividend Strategy
Current Strategy
— Focus on Asian companies that deliver sustainable dividend growth
through:
• Exposure to rising domestic household income
• Strong competitive position
• Improving dividend policies
Looking Forward
— Asian companies continue to look attractive relative to other regions
based on current dividend yield and growth outlook
— Interdependence of monetary policies in Asia with that of the U.S.,
combined with asymmetric global economic growth, increases the
risk of capital controls in Asia Pacific
— Inflationary pressures arising from asset prices and soft commodities
increase the risk of policy response (i.e. tighter monetary policies
and/or direct price controls)
— Focus on companies that we believe can deliver either:
• Stable, defensive dividend growth to provide a solid pillar for
dividend income (e.g., higher-yielding telecom, utilities and
consumer-related firms)
• Strong growth in dividends as earnings rise, business
investments mature and/or payout ratios expand
23
ASIA GROWTH AND INCOME STRATEGIES
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Investment Returns| Asia Dividend Strategy
Annual returns for the years ended 31 December
18.05%
-25.97%
47.59%
22.83%
14.64%
-41.62%
37.86%
17.25%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
2007 2008 2009 2010
Asia Dividend Strategy MSCI AC Asia Pacific Index
24
Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
Sources: BNY Mellon Investment Servicing, Bloomberg, MICM
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
-0.39%
11.75%11.33%
12.82%
-0.65%
11.36%
1.73%
3.10%
3 Months 1 Year 3 Year Since Inception
Asia Dividend Strategy
MSCI AC Asia Pacific Index
Investment Returns | Asia Dividend StrategyAs of 31 March 2011
25
AVERAGE ANNUAL TOTAL RETURNS
Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
Sources: BNY Mellon Investment Servicing, Bloomberg, MICM
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Dampening Downside Volatility—A Welcome Side-benefit
26
DrawdownNovember 2006 - March 2011
-60%
-50%
-40%
-30%
-20%
-10%
0%
Oct 2006 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Mar 2011
Matthews Asia Dividend
MSCI AC ASIA PACIFIC
Sources: Zephyr Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Strategy Performance
27
Manager Performance
November 2006 - March 2011 (Single Computation)
4000
6000
8000
10000
12000
14000
16000
18000
Oct 2006 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Mar 2011
Matthews Asia Dividend
MSCI AC ASIA PACIFIC
Custom TableNovember 2006 - March 2011: Summary Statistics
Matthews Asia Div idend
Return
12.81%
MSCI AC ASIA PACIFIC 3.10%
Standard
Dev iation
18.04%
21.81%
Excess Return
v s.
Market
9.71%
0.00%
Tracking
Error
v s.
Market
7.69%
0.00%
Inf ormation
Ratio
v s.
Market
1.26
0.00
R-Squared
v s.
Market
88.91%
100.00%
Sources: Zephyr Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Portfolio Characteristics | Asia Dividend StrategyAs of 31 March 2011
28
Country Breakdown (%)
China/Hong Kong 24.4%
Japan 20.6%
Taiwan 10.6%
Australia 10.3%
South Korea 8.4%
Thailand 8.2%
Singapore 5.0%
Indonesia 4.3%
United Kingdom 3.1%
Philippines 1.6%
Malaysia 0.4%
India 0.0%
New Zealand 0.0%
Cash and Other 3.1%
Sector Breakdown (%)
Financials 17.7%
Consumer Discretionary 17.0%
Consumer Staples 15.5%
Telecom Services 11.4%
Information Technology 9.4%
Utilities 7.0%
Industrials 6.6%
Health Care 6.2%
Energy 4.1%
Materials 2.0%
Cash and Other 3.1%
Source: FactSet Research Systems
Relative to Index (%) Relative to Index (%)
-9.9%
5.4%
10.0%
7.0%
-3.7%
3.7%
-7.1%
3.1%
-1.7%
-9.9%
3.1%
MATTHEWS ASIA DIVIDEND STRATEGY VS. MSCI AC ASIA PACIFIC INDEX
7.8%
-16.8%
3.5%
-6.0%
-1.0%
7.1%
1.9%
2.7%
3.1%
1.2%
-1.5%
-4.9%
-0.2%
3.1%
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Portfolio Characteristics | Asia Dividend StrategyAs of 31 March 2011
29
Market Cap Exposure Strategy Relative to Index (%)
Large Cap ($5B+) 43.5%
Mid Cap ($1B–$5B) 28.2%
Small Cap (<$1B) 25.2%
Cash and Other 3.1%
Portfolio Characteristics Strategy
Assets $2.2 billion
Weighted Average Market Cap $19.2 billion
P/E using FY1 Estimates 11.8x
P/E using FY2 Estimates 10.5x
3.1%
25.1%
13.8%
-42.0%
MATTHEWS ASIA DIVIDEND STRATEGY VS. MSCI AC ASIA PACIFIC INDEX
Source: FactSet Research Systems, MICM
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
To learn more about Matthews or how our strategies can complement
globally diversified portfolios, please visit global.matthewsasia.com or
contact us directly:
Jonathan Schuman James Campion
Executive Vice President Senior Vice President
Head of Global Business Development Head of Asia Business Development
+1-415-984-5366 +852-3798-2686
[email protected] [email protected]
Contacting Matthews Asia
30
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Appendix I | Investment Team Bios
31
Portfolio Managers
ROBERT J. HORROCKS, PhD
Chief Investment Officer,
Portfolio Manager
Robert Horrocks is Chief Investment Officer at Matthews International Capital Management, LLC and a Portfolio Manager. He manages the firm’s Asian Growth and Income strategy. As Chief Investment Officer, Robert oversees the firm’s investment process and investment professionals and sets the research agenda for the investment team. Before joining Matthews in 2008, Robert was Head of Research at Mirae Asset Management in Hong Kong. From 2003 to 2006, Robert served as Chief Investment Officer for EverbrightPramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securitiesin Hong Kong before moving on to spend eight years working in several different Asian jurisdictions for Schroders, including stints as Country General Manager in Taiwan, Deputy Chief Investment Officer in Korea and Designated Chief Investment Officer in Shanghai.Robert earned his PhD in Chinese Economic History from Leeds University in the United Kingdom, and is fluent in Mandarin.
RICHARD H. GAO
Portfolio Manager Richard Gao is a Portfolio Manager at Matthews International Capital Management, LLC. He manages the firm’s China and Pacific Tiger strategies and co-manages the China Dividend strategy. Richard joined Matthews in 1997 as a China Analyst. He began his career at the Bank of China in 1989, first as a loan officer, then as a FOREX Trader in the Treasury Department. In 1993, he became Assistant Manager at the Bank of China, where he was in charge of FOREX trading for import/export companies. Richard received a B.A. inLiterature from Guangdong University of Foreign Studies and an M.B.A. in International Business from the Dominican University ofCalifornia. He is fluent in Mandarin, Cantonese and Shanghainese.
JESPER O. MADSEN, CFA
Portfolio Manager Jesper Madsen is a Portfolio Manager at Matthews International Capital Management, LLC, and manages the firm’s Asian Growth and Income, Asia Dividend and China Dividend strategies. Prior to joining Matthews in 2004 as a Research Analyst, Jesper was an Analyst at Charter Equity Research and also worked with the Fixed Income group at Barclays Global Investors. He has traveled extensively, including living and working in China. Jesper received a B.A. in Politics, Philosophy and Economics from the University of York in the United Kingdom.
SHARAT SHROFF, CFA
Portfolio Manager Sharat Shroff is a Portfolio Manager at Matthews International Capital Management, LLC. He manages the firm’s Pacific Tiger and India strategies and co-manages the Asia Pacific strategy. Prior to joining Matthews in 2005 as a Research Analyst, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology fromthe Institute of Technology in Varanasi, India and an M.B.A. from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Appendix II | Client Services Team Bios
32
JONATHAN D. SCHUMAN
Executive Vice President,
Head of Global Business
Development
Jonathan Schuman joined Matthews International Capital Management, LLC in 2010 as an Executive Vice President. He is responsible for leading the firm’s international business development strategy, developing relationships with key distribution partners and directing the firm’s global sales efforts. Prior to joining the firm, Jonathan was a Managing Director at PineBridge Investments (formerly AIG Investments) in Tokyo, responsible for institutional sales and client relations, product development, marketing and RFP functions for AIG’s third-party investment management business in Japan. He also served as Assistant General Counsel for Legal and Government Affairs for AIG Companies, Japan and Korea. Jonathan earned a J.D. from Harvard Law School, a M.A.L.D from The Fletcher School of Law and Diplomacy and a B.A. in Asian Studies from Williams College. He has served as Co-Chair of the Financial Services Committee at the American Chamber of Commerce in Japan, and is fluent in Japanese.
JAMES E. CAMPION
Senior Vice President,
Head of Asia Business
Development
James Campion joined Matthews International Capital Management, LLC in 2010 as a Senior Vice President and leads the firm’s business development efforts in Asia. Most recently, James was Head of Asia Distribution for Threadneedle Portfolio Services in Hong Kong, responsible for setting up its Hong Kong office and developing the firm’s Asia distribution strategy. Prior to this, he served as Allianz Global Investor’s Head of Mutual Funds for the Asia Pacific region and was a Managing Director for New Star International. From 1998 to 2004, James also held several positions with Schroder Investment Management (Hong Kong) Limited, including Regional Headof Mutual Funds, Asia ex Japan.
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
-0.90%
18.19%
9.18%
12.55%
16.86%
9.68%
1.22%
19.80%
5.32%
11.44%
13.99%
4.56%
3 Months 1 Year 3 Years 5 Years 10 YearsSince Inception
(12/9/94)
Pacific Tiger Strategy
MSCI AC Asia ex Japan Index
Appendix III | Pacific Tiger Strategy Investment ReturnsAs of 31 March 2011
33
1 Index return calculated from 31/8/94.
Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
Sources: BNY Mellon Investment Servicing, Bloomberg, MICM
AVERAGE ANNUAL TOTAL RETURNS
1
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
- 1.09%
11.33%10.36%
19.48%
17.66%
13.33%
2.89%
9.58%
4.17%
16.65% 16.12%
4.34%
3 Months 1 Year 3 Years 5 Years 10 YearsSince inception
(19/2/98)
China Strategy
MSCI China Index
1
As of 31 March 2011
34
1 Index is calculated from 28/02/98.
Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.
Sources: BNY Mellon Investment Servicing, Bloomberg, MICM
AVERAGE ANNUAL TOTAL RETURNS
Appendix IV | China Strategy Investment Returns
For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.
© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511
Disclosure
35
Investing in international markets may involve additional risks, such as social and political instability, market illiquidity,
exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country and sector
strategies may be subject to a higher degree of market risk than diversified strategies because of concentration in a specific
industry, sector or geographic location. Investing in small- and mid-size companies is more risky than investing in large
companies as they may be more volatile and less liquid than large companies.
The information contained in this presentation is for informational purposes only and does not, in any way, constitute
investment advice or an offer to sell or a solicitation of an offer to buy any security or product mentioned herein. No
representation is given that shares, products or services mentioned herein are suitable for any particular investor.
Investors should ascertain from their professional advisers the consequences of investing with Matthews under the
relevant laws of the jurisdictions to which they are subject including the tax consequences and any exchange control
requirement. Investors should carefully consider the investment objectives, risks, charges and expenses of any strategy
before making an investment decision.
The MSCI All Country Asia Pacific Index is a free float-adjusted market capitalisation–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan and Thailand. The Asia Dividend Strategy invests in countries that are not included in the MSCI All Country Asia Pacific Index. It is not possible to invest directly in an index.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalisation–weighted index of the stock of markets of China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand. The Pacific Tiger Strategy may invest in countries that are not included in the MSCI All Country Asia ex Japan Index. It is not possible to invest directly in an index.
The MSCI China Index is a free float–adjusted market capitalisation–weighted index of Chinese equities that include China-affiliated corporations and H shares listed on the Hong Kong exchange, and B shares listed on the Shanghai and Shenzhen exchanges. It is not possible to invest directly in an index.