Matthews Asia Strategic Income Fund promising, good time to invest in Asia, adviser says

By Aleesia Forni

Columbus, Ohio, Dec. 8 - The new Matthews Asia Strategic Income Fund will primarily invest in bonds and debt securities of Asian corporate and sovereign issuers in both local and hard currencies, a strategy that one adviser believes may be a smart investment decision right now.

"I think that it could be a good time to invest in Asia," executive vice president of New York-based Altfest Personal Wealth Management Dr. Karen Altfest said. "I think there are a lot of interesting things going on."

However, price should be a factor, and investors need to decide if they are "getting a good deal on this, basically."

"You always have to look at [price], because some of them have had success and are inflated in their cost."

While some Asian countries are more emerged than others, Altfest said this fund "could be good" depending on the currencies and what happens with them.

"It could be volatile over the short-term if people are patient and don't mind short-term volatility," Altfest said, adding that the "long-term could be reasonably good."

The New York-based investment firm "likes emerging markets."

"Some countries in that region have very strong balance sheets," Altfest said, "but like everything else, there are negatives."

The absence of U.S. quality accounting standards in some of these regions can be "a distinct negative."

Additionally, people who are not comfortable with volatility may be inclined to shy away from this fund.

"It doesn't have to be this or nothing, or a lot of this or nothing," Altfest said of the fund. "It depends on what percent they're holding in local currencies as opposed to hard currencies."

This is something investors are able to choose or not choose, though "in a way, not control while you're in the fund."

"There's a manager for that," Altfest said. "So like anything else, put a small percentage of your money in it [so] you can try it."

Matthews International Capital Management LLC weights its portfolio in proportion to a country's creditworthiness, price stability and currency appreciation, according to a company press release.

Altfest said this points is well taken, and some emerging market countries may be well capitalized and at low risk of default.

Altfest believes determining the creditworthiness of an entire country may prove challenging, and gave the eurozone as an example.

"Some of those are turning out not to be quite as creditworthy as countries we might like to invest in," Altfest said.

However, Altfest believes Matthews is "definitely right" that many people are underinvested in Asia.

"It's an interesting market," Altfest said. "It could be an interesting time to have a little exposure to that market."

"Many Asian countries learned their lesson in the 1990s and have assets to pay off their debts, so [they] are not in great danger of defaulting," Altfest said.

Though Matthews is "more known" for their equity funds, Altfest believes Matthews does have "a good background in having their feet on the ground in Asia."

"They know a lot about that part of the world, so that's a good thing," Altfest said.

However, the firm is "not real known" for fixed-income funds, so "that is a question mark about them and their ability," Altfest added.

Matthews is a San Francisco-based independent investment management firm.

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