QikReview: Top Pacific/Asia ex-Japan Mutual Funds

Below is a brief review of three Pacific/Asia ex-Japan mutual funds.

Matthews Korea (MAKOX)

Category: Pacific/Asia ex-Japan
Rating: 3
Capital Gains Exposure: 45%
Assets: $0.2 bil
Expense Ratio: 1.28%
Turnover Ratio: 26%
Yield: 0.27%
Redemption Period: 90 days
Redemption Fee: 2.0%
3-Year Total Cost: $412
Minimum Investment: $2,500
Comments: This fund is #1 among peers in 10-year returns, but it's at the bottom of the pack for all other rankings. It's pretty volatile and I can see it crashing before starting to make a new streak of gains. This is a Large-cap Value fund that invests into Giant (22), Large (41), Medium (29), and Small (7) companies. It invests into Telecom (7), Healthcare (15), Consumer Services (8), Business Services (15), Financials (25), Consumer Goods (16), and Industrials (6). It has exposure to South Korea only. This fund is way to volatile and one-country dependant. Although the fund's long-term strategy seems to work, it's very volatile in the short-term. This fund is something to keep an eye on for now.

Fidelity Southeast Asia

Category: Pacific/Asia ex-Japan
Rating: 4
Capital Gains Exposure: 27%
Assets: $4.2 bil
Expense Ratio: 1.04%
Turnover Ratio: 72%
Yield: 0.77%
Redemption Period: 90 days
Redemption Fee: 1.5%
3-Year Total Cost: $347
Minimum Investment: $2,500
Comments: Although absolute returns are incredible (35% 5-year returns and 17% 10-year returns), relatively speaking this fund is in the middle of the pack as it ranks a measly #29 among peers in 10-year returns and a decent #8 in 5-year returns. It is very volatile and doesn't strike me as a great bear-market performer. This Large-cap Blend fund invests into Giant (35), Large (47), and Medium (18) companies. It has exposure in China (27), South Korea (25), Hong Kong (11), Taiwan (8), and Singapore (7). It has only 1.4% in Cash. It invests into Telecom (8), Business Services (20), Financials (21), Consumer Goods (8), and Industrial Materials (21).
It has a large number of holdings, 124, a low-level of concentration into particular stocks (only 22% of assets in the Top 10 holdings), and a low level of commitment to its investments (turnover rate of 72%). This seems to be a decent fund, but it's not doing anything for me. Absolute performance is off the charts, but there are plenty of better-performing peers. I may revisit the fund once the Asian markets cool off a bit, but it's not just the overpriced markets, I'm not sure that I like this fund all that much.

T. Rowe Price New Asia

Category: Pacific/Asia ex-Japan
Rating: 4
Capital Gains Exposure: 29%
Assets: $4.8 bil
Expense Ratio: 1.05%
Turnover Ratio: 53%
Yield: 0.96%
Redemption Period: 90 days
Redemption Fee: 2.0%
3-Year Total Cost: $334
Minimum Investment: $2,500
Comments: A very volatile fund with very respectable returns. It is #3 in 1-year returns, #6 in 5-year returns, but only #30 in 3-year and #34 in 10-year returns. This Large-cap Growth fund invests into Giant (9), Large (54), and Medium (35) companies. It invests into Business Services (11), Financials (31), Consumer Goods (20), Industrials (19), and Utilities (8). It has exposure to India (37), China (28), South Korea (13), Taiwan (8), and Singapore (3). It has 86 holdings and a 53% turnover ratio. Only 24% of assets are in the Top 10 holdings. It doesn't seem to be investing in the hottest companies right now since I didn't recognize any of the holdings in the top 25. Once I'll be convinced that Asia is worth investing in, this fund will on my on short list of candidates.

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