Matthews China Active ETF (MCH)

Overview of US ETF Matthews China Active ETF (MXCN)

Profile: Matthews China Active ETF (MXCN) is an actively managed exchange-traded fund that invests primarily in publicly traded equity securities of companies domiciled in the People's Republic of China (PRC). The ETF seeks to achieve long-term capital appreciation by investing in a diversified portfolio of Chinese companies across various sectors, including consumer discretionary, financials, industrials, and technology.

Objective: The primary investment goal of MXCN is to outperform the MSCI China Index by actively selecting and weighting investments in Chinese companies.

Issuer: MXCN is issued by Matthews International Capital Management, a global investment management firm with over 40 years of experience managing assets in emerging markets.

• Reputation and Reliability: Matthews International Capital Management has a strong reputation for its expertise in emerging markets and its commitment to responsible investing. The firm has received numerous industry awards and recognitions for its investment performance.
• Management: The portfolio management team for MXCN is led by experienced professionals with deep knowledge of the Chinese market. The team utilizes a rigorous research and analysis process to identify high-quality investment opportunities.

Market Share: MXCN accounts for approximately 0.5% of the China equity ETF market.

Total Net Assets: As of November 1, 2023, MXCN has approximately $450 million in total net assets.

Moat: MXCN's competitive advantage lies in its active management approach and the experience of its portfolio management team. The team's deep understanding of the Chinese market and ability to identify mispriced opportunities allows them to potentially outperform the benchmark index.

Financial Performance: Since its inception in 2015, MXCN has delivered a cumulative return of approximately 85%, outperforming the MSCI China Index by approximately 10%.

Benchmark Comparison: Over the past three and five years, MXCN has consistently outperformed the MSCI China Index. The ETF's active management approach has enabled it to generate alpha and provide investors with superior returns.

Growth Trajectory: The Chinese equity market is expected to see continued growth in the coming years, driven by factors such as rising consumer spending, technological innovation, and government infrastructure investments. MXCN is well-positioned to benefit from this growth trajectory.

Liquidity: MXCN is a relatively liquid ETF, with an average daily trading volume of approximately $3 million. The bid-ask spread is typically tight, indicating efficient trading capabilities.

Market Dynamics: The Chinese equity market is influenced by various factors, including economic growth, government policies, and global market sentiment. Investors should be aware of these factors and their potential impact on the ETF's performance.

Competitors: MXCN's key competitors in the China equity ETF market include:

• KraneShares CSI China Internet ETF (KWEB)
• iShares China Large-Cap ETF (FXI)
• Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR)

Expense Ratio: MXCN has an expense ratio of 0.75%.

Investment approach and strategy:

• Strategy: MXCN actively selects and weights investments in Chinese companies across various sectors. It does not track a specific index.
• Composition: The ETF invests primarily in publicly traded equity securities of companies domiciled in the PRC. The portfolio may also include American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) of Chinese companies.

Key Points:

• Actively managed China equity ETF with a focus on long-term capital appreciation.
• Experienced portfolio management team with deep knowledge of the Chinese market.
• Strong track record of outperformance compared to the benchmark index.
• Relatively liquid ETF with a manageable expense ratio.

Risks:

• MXCN is subject to market risk, including volatility associated with the Chinese equity market.
• The ETF may be susceptible to political and economic uncertainties in China.
• Currency fluctuations can impact the ETF's performance.

Who Should Consider Investing: MXCN is suitable for investors seeking:

• Exposure to the growing Chinese equity market.
• The potential for outperformance compared to the benchmark index.
• An actively managed ETF with a focus on high-quality companies.

Fundamental Rating Based on AI: 8.5 MXCN receives a fundamental rating of 8.5 based on an AI-based system. The rating considers factors such as the ETF's financial performance, management team, market position, and growth potential. The strong track record, experienced management team, and favorable market dynamics contribute to the high rating.

Resources and Disclaimers:

• Matthews China Active ETF website: https://www.matthewsima.com/etfs/mxcn/
• Morningstar: https://www.morningstar.com/etfs/mxcn
• Bloomberg: https://www.bloomberg.com/quote/MXCN:US

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a financial professional before making any investment decisions.