Matthews Asia launched the Matthews Emerging Markets ex China Active ETF (NYSE Arca: MEMX) on the New York Stock Exchange today, adding to the firm’s active ETF suite. MEMX allows investors to separate China from their core emerging markets allocations, thereby taking control over the level of China exposure in their portfolios.
Some investors currently want to avoid exposure to China, while others are looking to customize their specific allocations. An emerging markets ex-China strategy can help mitigate both country-specific and idiosyncratic risk factors, while also placing greater emphasis on a broader number of emerging market opportunities often overlooked in core emerging markets portfolios.
“Matthews is a leading manager for advisors seeking emerging markets equity exposure, and it is great to see a new offering for ETF-centric advisors wanting to carve out Chinese securities,” said Todd Rosenbluth, head of research at VettaFi.
Cooper Abbott, CEO of Matthews Asia, said in a news release that “many investors want to have specific control of their China exposure, either to avoid it or to precisely allocate their exposures to this unique single-country allocation due to its size and market depth,” before adding: “We believe MEMX enables investors to reduce single-country risk while improving diversification through exposure to other emerging markets such as smaller and selective exposure in the frontier and other markets.”
MEMX is managed by lead portfolio manager John Paul Lech and co-portfolio manager Alex Zarechnak, who also manage the Matthews Emerging Markets Equity Active ETF (MEM) and the Matthews Emerging Markets Equity mutual fund.
Lech added that “Emerging markets can offer investors the biggest potential for long-term growth over many other equity asset classes. With this launch, investors now have a broader set of options to control their China exposure, either as part of a core emerging markets portfolio with MEM or excluding it with MEMX and using [the Matthews China Active ETF (MCH)] to add dedicated China exposure.”