G. Paul Matthews,
Chairman and Chief Investment Officer Matthews Asian Funds
"Asia," Hubert Humphrey once remarked, "is rich in people, rich in culture and rich in resources. It is also rich in trouble."
Any investor who has dipped a toe in the region during the past decade can appreciate that sentiment. No one understands the complexities of investing in Asia better than the subject of this week's 10 Questions, G. Paul Matthews.
Matthews founded Matthews International Capital Management in 1991 on the belief that Asia "will be the most dynamic growth region of the 21st century." The course of dynamic growth never does run smooth, but the firm's six no-load Asian funds have turned in a most-impressive long-term performance. For a five-year period, the Matthews Korea fund is in the top 1% of its peers (27.6% average annual return), the Growth & Income fund ranks in the top 2% (15.63%) and the Pacific Tiger fund makes the top 4% (11.25%), according to Morningstar. The three-year performance of the newer Matthews funds is stellar as well: The China fund beats all but 2% of its peers (3.95%), the Asian Technology fund is in the top 21% (-29.79%), and the Japan fund is in the top 36% (-21.6%).
In the interview, the Britain-bred, San Francisco-based Matthews offers his unique insights on the multi-faceted Asian landscape. For instance, Matthews says: South Korea's economy is more immediately threatened by Iraq than North Korea; he remains bullish on the prospects for both Asia's technology sector and China; and that Japan still hasn't taken drastic enough measure to emerge from its lengthy funk.If you believe in Asia's prospects, you should believe in Matthews Funds. But rather than taking our word for it, read on. 1. What is the outlook for Asian markets in 2003 and how are you investing accordingly? In general, the outlook for 2003 is for some of the trends that took hold in 2002 to continue. The two significant ones, from our perspective, are the continued strength of the domestic economies in mainland China, South Korea, Thailand and, to a lesser extent, other non-Japan countries. That has gone a long way toward offsetting what has continued to be a difficult global environment for manufacturing exporters. We see no reason to expect that second trend to change dramatically over the next year or so.