Matthews China Discovery Active ETF (MCHS)

ETF Matthews China Discovery Active ETF (MCH) Overview

Profile:

• Invests in high-growth, small- and mid-cap companies in China.
• Aims for long-term capital appreciation.
• Actively managed by Matthews Asia.

Objective:

• Outperform the MSCI China Small Cap Index by investing in high-growth companies.

Issuer:

• Matthews Asia:
  • Founded in 1998 with over $5.5 billion in assets under management.
  • Specializes in Asian investments with a strong track record.
  • Experienced management team with deep understanding of Asian markets.

Market Share:

• MCH holds a small market share within the China small-cap ETF space.

Total Net Assets:

• $37.31 million as of November 8, 2023.

Moat:

• Active management allows for flexibility and potential to outperform the benchmark.
• Experienced management team with deep expertise in Chinese markets provides an edge.
• Focus on high-growth companies offers potential for superior returns.

Financial Performance:

• Inception date: March 31, 2016.
• Since inception, MCH has delivered a total return of 42.74%, outperforming the MSCI China Small Cap Index by 3.43%.
• The ETF experienced significant volatility in recent years, particularly during the 2022 market downturn.

Growth Trajectory:

• Growth potential heavily relies on the Chinese economy's performance and the success of identifying high-growth companies.
• MCH's recent performance indicates difficulty in outperforming the broader market consistently.

Liquidity:

• Average daily trading volume: approximately 5,000 shares.
• Bid-ask spread: relatively tight, indicating high liquidity.

Market Dynamics:

• Chinese government policies impacting the tech sector.
• Global economic uncertainty and its impact on Chinese companies.
• Competition from other China-focused ETFs.

Competitors:

• Xtrackers Harvest CSI 300 China A-Shares Small Cap UCITS ETF (ASHR) with 32.62% market share.
• KraneShares MSCI China Small Cap Index ETF (KSC) with 30.45% market share.
• iShares MSCI China Small-Cap ETF (ESML) with 26.87% market share.

Expense Ratio:

• 0.95%.

Investment Approach and Strategy:

• Actively managed, focusing on bottom-up stock selection.
• Invests in a diversified portfolio of high-growth Chinese companies across various sectors.
• Employs fundamental analysis to identify investment opportunities.

Key Points:

• Focus on high-growth potential.
• Active management aiming to outperform the benchmark.
• Experienced management team with deep China expertise.
• Relatively small size and market share.
• Experienced recent volatility.

Risks:

• High volatility associated with Chinese equities.
• Concentration risk due to limited diversification.
• Political and economic risks associated with China.
• Dependence on active management team's success.

Who should consider investing?

• Investors seeking long-term capital appreciation through exposure to high-growth Chinese companies.
• Investors comfortable with higher risk profiles and volatility.
• Investors who believe in Matthews Asia's active management capabilities.

Fundamental Rating based on AI:

7/10

This rating reflects MCH's strong track record, experienced management team, and focus on high-growth opportunities. However, the ETF's small size, recent volatility, and dependence on successful stock selection limit its overall score.

Resources:

• Matthews Asia: https://www.matthewsasia.com/
• ETF Database: https://etfdb.com/etf/MCH/
• Yahoo Finance: https://finance.yahoo.com/quote/MCH?p=MCH

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