A Consultant’s Guide to MINV and Innovation in Asia | So Good News

Funds that offer exposure to innovation in Asia provide diversification benefits without sacrificing strong growth potential.

Under global inflationary winds, Asian economies are recovering from the pandemic and innovation is growing, Michael O, Portfolio Manager, Matthews Asia, said in his comment in September.

The Matthews Asia Innovators Active ETF (MINV) This highly reliable and concentrated equity portfolio invests in innovative ex-Japan companies in Asia, capitalizing on the new economy and rising disposable incomes in the region. The fund currently offers exposure to China/Hong Kong, India, South Korea, Indonesia, Singapore, Taiwan, Vietnam and the United States.

The Matthews Asia Innovators Fund — a strategy in the MINV active ETF package — is overweight China due to the attractive valuation levels currently available, Oh said. “Similarly, we have chosen to take overweight positions in India and, to a lesser extent, Indonesia. Our biggest focus is on Taiwan and South Korea, as we are finding good opportunities in developing Asia,” O added.

Given its scale, China’s economy is entering many areas of innovative activity, and in some areas, such as online gaming, it dominates.

“Other markets have identified narrow strengths,” said O. “For example, Taiwan is a world leader in the semiconductor industry. Growth in fintech and digital financial advisory services is most concentrated in the Association of Southeast Asian Nations (ASEAN) region, with economies such as Malaysia, Vietnam, Indonesia and Thailand.”

India offers many exciting, innovative companies, including recent IPOs. As for Internet business and e-commerce platforms, the country is still 15-20 years behind China, but it is moving in the right direction, O said.

Indonesia has more opportunities for customer-oriented innovation. “For example, car dealers are working in partnership with Japanese companies to bring electric cars to the Indonesian market,” said O. “There is also a general acceptance of digital services, particularly fintech and e-commerce.”

The most exciting opportunities in South Korea are in electric vehicle (EV) batteries. In the global market, about 90% of these batteries are made by Asian companies based in South Korea, Japan and China, Oh reports. Several South Korean companies are thriving and even investing in the U.S., making it a global story, Oh said.

The semiconductor industry in South Korea and Taiwan is also very dominant, O said. There are big names in this landscape, but more importantly, there are also small chip designers who are enabling the industry and are flourishing right now.

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