Look to Asia for growth; funds that focus on Asian markets excelled last year and could do well in the future. (Mutual Fund Focus).If you've read the newspapers or looked at broadcast news lately, you might not think Asia is a great place to invest. Think again. Yes, the Japanese economy remains in recession. And true enough, the region's economies--including South Korea, Indonesia, Taiwan, and others--took a bath in 1998 when "the Asian Flu Asian Flu may refer to:
n. Maine Sustained noise, as from hammering: "Hark that reeling, now, you'll wake the baby!" Anonymous. . Still, focusing on those past troubles may be shortsighted short·sight·ed adj. 1. Nearsighted; myopic. 2. Lacking foresight. short  sight .
Japan's woes are well documented but haven't brought down the
entire region. The island nation's Nikkei index--the Tokyo
market's equivalent of the Standard & Poor's 500
index--sputtered to a 31.7% loss last year, but elsewhere, things
weren't as grim. In fact, other countries in the region were busy
rebounding from 1998's fiasco with a vengeance with great violence; as, to strike with a vengeance s>.- Hudibras. with even greater intensity; as, to return one's insult with a vengeance s>. See also: Vengeance Vengeance . South Korea ended the year up a whopping 47%. Taiwan's stock market rose 24.9%, while Thailand logged a 29.3% gain. Indonesia and Malaysia both saw their indexes rise 5% or more in 2002. Overall, Morningstar Inc. of Chicago reports mutual funds investing in Asia outside of the Japanese market finished an average -4.7%. That figure is far better than the numbers turned in by other overseas fund categories. Morningstar reports foreign stock funds were down an average 21.9%, while portfolios combining U.S. and foreign stocks averaged -17.6% in 2001. Over the long term, there are compelling reasons to invest in Asia. For one, over the past 20 years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time region has averaged gross domestic product growth of 4.4% annually, compared to 3.2% annually for the U.S. and 2.3% for Europe over the same stretch. And since 1998, many economies in the region adopted financial reforms to trim government deficits and make their exports more attractive to the world market. "I think economies in the region are headed toward a lower-growth, yet more-stable period ahead," says Mark Headley, president of Matthews International Capital Management, a fund company that specializes in Asian securities in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . "Instead of the 5% to 10% annual GDP GDP (guanosine diphosphate): see guanine. growth you might have seen from 1985 to 1997, we may likely see 3% to 5% gains, compared to 1% to 2% for the U.S. and Europe." Headley thinks that could translate into 15% annual earnings. Such potential led us to Morningstar, looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. funds with strong track records over the last three years, a sampling that spans both the 1998 debacle and the region's recovery afterward af·ter·ward also af·ter·wards adv. At a later time; subsequently. Adv. 1. afterward - happening at a time subsequent to a reference time; "he apologized subsequently"; "he's going to the store but he'll be back here . We focused on Pacific Rim Pacific Rim, term used to describe the nations bordering the Pacific Ocean and the island countries situated in it. In the post–World War II era, the Pacific Rim has become an increasingly important and interconnected economic region. and Asian funds that excluded Japan, given that nation's stumbles over the past decade. Finally, we decided to include both country-specific offerings and regional plays in our screen for a wide array of options. At the top of our list were funds run by Matthews. First place went to the Matthews Korea fund Korea Fund is a USA based mutual fund created in the 1980s to let U.S. retail investors buy a stake in the South Korean economy. Korea Fund is a closed-end fund - different from regular mutual funds, since you buy and sell shares of an open-end fund by dealing directly with the (MAKOX), which focuses on shares trading in South Korea. Thanks to a strong year by the semiconductor manufacturer Samsung and financial outfits such as Kookmin Bank Kookmin Bank (hangul:국민은행) is the largest bank by both asset value and market capitalization in South Korea. The bank is led by Kang Chung-Won who previously worked for Seoulbank and oversaw its sale to competitor Hana Bank before moving to , the fund generated a total return of 75.3% in 2001. Over the past three years, Matthews Korea gained an average 30.6%. For most investors, however, wed recommend a look at the Matthews Asian Growth & Income fund (MACSX) for a couple of reasons. Growth and Income's track record isn't quite as dazzling as that of its Korea-based cousin, but with a portfolio that has holdings spread widely around the region, it offers investors good diversity and a mix that could cushion bumps bumps a term used to describe a variety of papulonodular dermatoses in horses, including 'heat bumps', 'feed bumps', 'protein bumps', 'wheat bumps' and others. No specific disease or etiology has been assigned to the term and veterinary dermatologists wish it would disappear from use. . The fund tends to gravitate grav·i·tate intr.v. grav·i·tat·ed, grav·i·tat·ing, grav·i·tates 1. To move in response to the force of gravity. 2. To move downward. 3. toward solid, conservative holdings in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , where 31% of its assets are invested, and South Korea, which accounts for 14% of the fund's money in equities. Management has also opted to hold convertible bonds, securities that pay dividend income and are less volatile than stocks. Asia Growth and Income has averaged a solid 24.5% annual total return over the past three years and logged a 17.2% gain in 2001.
Top Asian Mutual Funds
Year-to-Date 1-Year Ann. 3-Year Ann.
Fund Name (Ticker) Total Return * Total Return * Total Return *
Matthews Korea (MAKOX) 21.23% 75.29% 30.56
Matthews China (MCHFX) 3.39 5.93 27.47
Matthews Asian Growth &
Income (MACSX) 7.41 17.24 24.46
Dreyfus Premier Greater
China A (DPCAX) 7.08 3.44 22.60
Matthews Pacific Tiger
(MAPTX) 8.97 7.37 21.69
Liberty Newport Greater
China A (NGCAX) 3.66 -9.71 19.82
Fidelity Advisor Korea
A (FAKAX) 22.22 44.38 18.82
Fidelity Southeast
Asia (FSEAX) 12.75 4.84 14.74
Pacific Capital New
Asia A (PNAAX) 7.61 5.70 14.72
Fidelity China
Region (FHKCX) 1.62 -8.23 12.21
5-Year Ann. Toll-Free Minimum Initial
Fund Name (Ticker) Total Return * Number Investment
Matthews Korea (MAKOX) 7.10 800-789-2742 $2,500
Matthews China (MCHFX) N/A 800-789-2742 2,500
Matthews Asian Growth &
Income (MACSX) 7.94 800-789-2742 2,500
Dreyfus Premier Greater
China A (DPCAX) N/A 888-338-8084 1,000
Matthews Pacific Tiger
(MAPTX) -1.31 800-789-2742 2,500
Liberty Newport Greater
China A (NGCAX) N/A 800-322-2847 1,000
Fidelity Advisor Korea
A (FAKAX) N/A 800-522-7297 2,500
Fidelity Southeast
Asia (FSEAX) -3.58 800-544-8888 2,500
Pacific Capital New
Asia A (PNAAX) -1.67 800-258-9232 1,000
Fidelity China
Region (FHKCX) 0.61 800-544-8888 2,500
* AS OF MARCH 6, 2002
SOURCE: MORNINGSTAR INC.
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