The Matthews China Fund (MUTF: MCHFX) is an IRA mutual fund looking for long-term capital appreciation by investing in China – one of the fastest growing economies in the world. All of the companies in the Matthews China mutual fund have significant ties to this nation, its districts and Taiwan.
The Matthews China Fund is a good play for investors who believe China’s economy will continue to grow long term. However, it is not for the risk averse, given the fund’s concentration on companies based there and the fact that the Chinese government exercises significant control over industrial policies.
Here are the specifics for the Matthews China Fund for today’s mutual fund spotlight:
Investing Strategy: The fund invests in stocks of companies located in China and Taiwan. A company is considered to be based in China if its headquarters is based there, it gets 50% or more of its sales or profits from goods or services made or supplied in the countries, has 50% or more of its assets there, or is traded on the countries exchange. Every cent of this China mutual fund investment’s assets are in stocks.
Expense Ratio: With a 1.15% expense ratio and no transaction fee, the Matthews China Fund is priced low compared with other funds in the large foreign equity growth category and one of the few with a Morningstar rating of five stars.
Top 5 Holdings: The top five stocks in the Matthews China Fund include CNOOC, Ltd. (NYSE: CEO )at 2.90%, China Merchants Holdings (International) Co. at 2.60%, Cheung Kong Infrastructure Holdings at 2.58%, Zte Corporation at 2.48%, and Belle International Holdings Ltd. (PINK:BELLF) at 2.36%.
Returns: The fund’s 9.2% return over 12 months underperformed the Dow Jones Industrial Average’s 14.7% and S&P 500 Index’s 13.8% return during the period. Its five-year return of 66.2% outperformed the Dow Jones Industrial Average’s 9% return and the S&P 500’s 1.6% return during the period.
Other Fund Statistics
- Total Assets: $2.93 billion as of 6/16/11)
- Minimum Investment: $2,500
- Fund manager: Richard H. Gao and Henry Zhang
- Manager’s Tenure: Since January 1999 and April 2010 respectively
