Matthews Emerging Markets Discovery Active ETF (MEMS)

Overview

The Matthews Emerging Markets Discovery Active ETF (EMDI) is an actively managed ETF that seeks to provide long-term capital appreciation by investing primarily in equity securities of companies located in emerging market countries. The fund focuses on companies with unique growth opportunities that may be overlooked by broader market indices. Its asset allocation is concentrated on equities in emerging markets, with a strategy driven by fundamental research and active security selection.

Reputation and Reliability

Matthews Asia is a well-established investment firm with a long history of focusing on Asian and emerging markets, known for its dedicated research and active management approach.

Management Expertise

The ETF is managed by a team of experienced portfolio managers with deep expertise in emerging markets, leveraging Matthews Asia's extensive on-the-ground research capabilities.

Goal

To achieve long-term capital appreciation.

Investment Approach and Strategy

Strategy: The ETF is actively managed and does not track a specific index. It aims to identify and invest in companies demonstrating unique growth potential within emerging markets.

Composition The ETF primarily holds equity securities of companies located in emerging market countries. Holdings can include large, mid, and small-cap companies.

Market Share: Specific market share data for EMDI within the broader emerging markets ETF landscape is not readily available as it's an actively managed niche product, making direct comparison to index-based ETFs difficult.

Total Net Assets (AUM): 127679717

Key Competitors

• iShares Core MSCI Emerging Markets ETF (IEMG)
• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares MSCI Emerging Markets Small-Cap ETF (EEMS)

Competitive Landscape

The emerging markets ETF space is dominated by large, passive index-tracking funds offering broad diversification at low costs. Actively managed ETFs like EMDI operate in a more specialized segment, appealing to investors seeking alpha through active management and a focus on discovery opportunities. EMDI's advantage lies in its focused research and potential to uncover hidden gems, while its disadvantage is the higher expense ratio and the inherent risks of active management relative to passive ETFs.

Historical Performance: Detailed historical performance data for EMDI across various timeframes (e.g., 1-year, 3-year, 5-year, 10-year) would typically show its performance against its benchmark and peers. (Data not provided in request, would require external data source)

Benchmark Comparison: As an active ETF, EMDI aims to outperform its benchmark, typically an emerging markets equity index. Its success is measured by its ability to generate alpha relative to such a benchmark. (Specific comparison data not provided)

Expense Ratio: 0.75

Average Trading Volume

The ETF's average trading volume is generally moderate, indicating reasonable liquidity for most investors.

Bid-Ask Spread

The bid-ask spread for EMDI is typically within a range that is manageable for most investors, though it can fluctuate with market conditions.

Market Environment Factors

EMDI is influenced by global economic growth, geopolitical stability in emerging markets, currency fluctuations, commodity prices, and investor sentiment towards risk assets. Growth prospects in specific emerging economies and sector-specific trends within those markets are also critical.

Growth Trajectory

The ETF's growth trajectory is tied to its success in identifying and capitalizing on emerging market growth opportunities. Changes in strategy and holdings would reflect evolving market conditions and the portfolio management team's outlook on specific countries and companies.

Competitive Edge

EMDI's competitive edge stems from its dedicated emerging markets research team at Matthews Asia, its active management strategy focused on 'discovery' opportunities, and its deep understanding of nuanced local market dynamics. This allows it to potentially identify undervalued or high-growth companies not typically found in broad market indices. The active management also provides flexibility to adapt to changing market conditions.

Volatility

Emerging markets are inherently more volatile than developed markets. EMDI's historical volatility is expected to be higher than diversified global equity ETFs due to its concentrated focus and exposure to emerging market risks.

Market Risk

Specific risks include political instability, currency depreciation, economic downturns in emerging economies, regulatory changes, and potential for lower liquidity and transparency compared to developed markets. Concentration risk can also be a factor if the portfolio becomes heavily weighted in a few sectors or countries.

Ideal Investor Profile

The ideal investor for EMDI is one with a higher risk tolerance, a long-term investment horizon, and a belief in the potential for alpha generation through active management in emerging markets. They should be comfortable with the inherent volatility of these markets.

Market Risk

EMDI is best suited for long-term investors seeking capital appreciation who are looking for active management to navigate the complexities and opportunities within emerging markets. It is less suitable for short-term traders or risk-averse investors.

The Matthews Emerging Markets Discovery Active ETF (EMDI) is an actively managed fund targeting long-term capital appreciation by identifying unique growth opportunities in emerging markets. Managed by Matthews Asia, it leverages deep research and on-the-ground expertise. While facing competition from large passive ETFs, EMDI's niche focus and active strategy aim to deliver alpha. Investors should be aware of the higher volatility and specific risks associated with emerging markets.

Data Sources:

• Matthews Asia Official Website (for ETF details, AUM, Expense Ratio)
• Financial Data Providers (e.g., ETF.com, Morningstar for market share and competitor data)

Disclaimers:

This information is for informational purposes only and does not constitute investment advice. Performance data, market share, and competitor analysis are subject to change and may require real-time data access for complete accuracy. Investing in emerging markets involves significant risks, including political and economic instability, currency fluctuations, and market volatility.