Watch This Asia Fund

by Alan Lavine and Gail Liberman

When the Matthews Funds launches a new overseas fund, it’s worth a look. The San Francisco-based investment company line-up of Asian and Far Eastern funds carries high ratings according to Morningstar Inc., Chicago.

Keep an eye on the Matthews Asia Pacific Fund to see how it performs compared with its peers. The Asian and Pacific Basin markets are performing well. But the area is also fraught with risks. Asian investments are highly volatile. Political, foreign currency and economic problems can send the markets into a tailspin.

The Matthews Asia Pacific Fund will select from a universe of more than 3,000 companies. Countries the fund plans to invest in include Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand. 

The new fund will be team-managed with Mark Headley as lead manager. He buys stocks based on the company’s financial strength, value and earnings, rather than based on economic events.

"The fund is designed to give investors a single choice for broad exposure to a region that encompasses 47 percent of the world’s population, 27 percent of the world's gross domestic product, and 19 percent of the world's market capitalization," Headley says.

Despite the risk, Headley says there are several factors that make these regions’ markets attractive. They include:

• The Asia Pacific region is one of the world's three great economic centers.  From Japan to India, there are a wide range of investment opportunities.

• Some economic benefits of cooperation by the European Union, a family of democratic European countries committed to working together on matters of joint interest, already are taking shape. Countries of the Asia Pacific region are working to lower trade barriers and standardize policies in areas such as accounting and financial regulation.

Asian political and corporate leadership are focused on creating a more stable and open environment for the region’s future prosperity. Better financial systems and greater domestic economic activity forecast sustained growth and development for half of the world's population.

Alan Lavine and Gail Liberman are husband-wife personal finance columnists, journalists and authors. They are the authors of "The Complete Idiot's Guide to Making Money with Mutual Funds," published by Alpha Books. Their columns appear in newspapers throughout New England and the Southeast, as well as online. Their commentary on mutual funds and personal finance is carried by 200 radio stations nationwide every Sunday over Business News Network's Charles DeRose Financial Advisor Show. Al and Gail’s new book is "Rags To Retirement:  Stories from people who retired well on much less than you think," published by Alpha Books.

More articles by Al and Gail can be found here.