Horrocks on Asia: Productivity, Growth & Consumption

In an interview with RIA Channel’s Julie Cooling, Robert Horrocks, Chief Investment Officer and Portfolio Manager at Matthews Asia, discusses the relevance of active management when investing in Asia. Horrocks highlights the unique opportunities Asian markets provide – especially in consumer retail equities. Based in San Francisco with $28 billion in assets under management, Matthews Asia focuses on Asian markets. According to Horrocks, Asia provides the unique combination of high savings rates, productive people, a strong education system, and a large manufacturing growth rate. All of these factors have allowed Asia to grow 3-4% faster than the rest of the world. Horrocks believes in active management within the Asian markets in order to access entrepreneurship and smaller to mid cap companies. When investing in a family-owned business, it is important to learn each business individually.

Matthews Asia currently has 18 different strategies including fixed income, equity, and mixed portfolios. When deciding on investment strategies and portfolios, the team works with advisors to try to allow clients to see the Asian markets in the context of its competitors. Horrocks also highlights that it is important to consider factors such as volatility and growth when investing in the Asian market. The Asian markets are also unique in that they are middle-class focused and projections anticipate Asian consumers to be responsible for 2/3rd’s of global middle class consumption.