Matthews Emerging Markets Ex China Active ETF (MEMX)

Overview

The Matthews Emerging Markets Ex China Active ETF (MEMX) is an actively managed ETF focused on providing long-term capital appreciation by investing primarily in equity securities of companies located in emerging market countries, excluding China.

Reputation and Reliability

Matthews Asia is a well-regarded investment firm specializing in Asian and emerging markets investments with a long track record.

Management Expertise

The management team at Matthews Asia possesses extensive experience and expertise in emerging markets investing, employing a bottom-up, fundamental research-driven approach.

Goal

Seeks long-term capital appreciation.

Investment Approach and Strategy

Strategy: Actively managed, focusing on fundamental research to identify companies with sustainable growth potential in emerging markets (ex-China).

Composition Primarily holds equity securities of companies located in emerging market countries excluding China. May also invest in companies that derive a significant portion of their revenue or profits from emerging market countries.

Market Share: MEMX's market share within the emerging markets ex-China ETF category is still growing and relatively small compared to broad EM ETFs.

Total Net Assets (AUM): 109000000

Key Competitors

• VWO
• IEMG
• EEM

Competitive Landscape

The emerging markets ETF landscape is dominated by large, passively managed ETFs. MEMX differentiates itself through active management and its exclusion of China, which can be an advantage for investors seeking diversification away from China. MEMX faces the challenge of competing with lower-cost passive funds while needing to demonstrate superior stock selection to justify its higher expense ratio.

Historical Performance: Historical performance data should be assessed based on the ETF's inception date (May 30, 2023). Limited long-term historical data is available. To be added once sufficient data is available.

Benchmark Comparison: To be added once sufficient performance data is available to compare the ETF's performance to a suitable benchmark like the MSCI Emerging Markets ex China Index.

Expense Ratio: 0.79

Average Trading Volume

The average trading volume of MEMX is moderate, which might affect the ease of buying or selling large quantities of shares.

Bid-Ask Spread

The bid-ask spread can vary depending on market conditions but is generally reasonable for an actively managed emerging markets ETF.

Market Environment Factors

Economic indicators, political stability, and currency fluctuations in emerging market countries (excluding China) significantly affect the ETF's performance. Global trade policies and commodity prices also play a crucial role.

Growth Trajectory

As a relatively new ETF, MEMX's growth trajectory will depend on its ability to attract assets by demonstrating strong performance relative to its benchmark and its ability to provide diversification away from China.

Competitive Edge

MEMX's competitive advantage lies in its active management strategy and its specific focus on emerging markets excluding China. This allows for a more targeted investment approach, potentially capturing growth opportunities outside of China. Matthews Asia's expertise in emerging markets adds credibility to the fund's stock selection process. Furthermore, MEMX's active approach provides flexibility to adapt to rapidly changing market conditions compared to passive ETFs.

Volatility

MEMX's volatility is expected to be high due to the inherent risks associated with investing in emerging markets.

Market Risk

The specific risks associated with MEMX's underlying assets include currency risk, political risk, and economic instability in emerging market countries, as well as company-specific risks related to individual stock holdings.

Ideal Investor Profile

The ideal investor for MEMX is one who seeks long-term capital appreciation and is comfortable with the higher risks associated with emerging market investing. Investors looking for diversification away from China may also find this ETF appealing.

Market Risk

MEMX is more suitable for long-term investors who can tolerate higher volatility and understand the complexities of emerging markets. It is less suitable for passive index followers seeking broad market exposure at the lowest cost.

The Matthews Emerging Markets Ex China Active ETF (MEMX) offers an actively managed approach to investing in emerging markets excluding China, providing a targeted strategy for investors seeking growth opportunities and diversification. Its exclusion of China differentiates it from broader EM ETFs, potentially benefiting investors seeking alternative geographic exposure. While its active management and specific focus come with a higher expense ratio, it may justify the cost by generating higher returns through strategic stock selection. The ETF is best suited for long-term investors comfortable with emerging market risks and seeking a China-free emerging market strategy.

Data Sources:

• Matthews Asia
• ETF.com
• Morningstar
• Company Filings

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be made based on individual circumstances and consultation with a qualified financial advisor. Market share data is based on available information and may be approximate. Performance data is historical and not indicative of future results. All investments involve risk, including the potential loss of principal.