UPDATE: Why Vietnam still attracts emerging-market bulls
Growth beats value overseas as it has in the United States.
Compared with a year ago, Getty Images' GYI revenue grew just 7% in the third quarter, the fifth straight quarter in which Getty's revenue growth rate fell. Getty's trouble lies in its biggest business, creative stills, which can be further broken into two segments distinguished by the licensing model: rights-managed and royalty-free. The rights-managed approach is the more traditional method of licensing imagery, often used by advertising and media firms. Royalty-free imagery distribution is a newer licensing model that is typically less complex and less expensive. Before the royalty-free model arrived, rights-managed licensing was the only game in town. However, royalty-free imagery has proven to be very popular and now accounts for 39% of Getty's total revenue (rights-managed imagery also stands at 39%). Royalty-free imagery has been growing much faster in recent years than rights-managed imagery. In the past several quarters, though, royalty-free imagery sales growth has slowed significantly, resulting in the five straight quarters of diminishing growth. The overarching reason for this weakness is the continued shift from analog consumption of imagery to digital consumption. As the world moves online and spends more time using digital devices, demand for easy-to-access, easy-to-purchase, and less-expensive imagery expands. This has fueled the growth of micropayment imagery Web sites like iStockphoto, from which a decent, but not professional-quality image can be purchased for as little as $1. Growth at this end of the market has expanded the total market for imagery but negatively impacted volume growth in Getty's royalty-free imagery collections. Just as royalty-free imagery has continually taken share from rights-managed imagery in recent years, micropayment Web sites will likely become a bigger part of the imagery market in the future. Fortunately for Getty, it acquired iStockphoto--the market leader--less than a year ago. Getty has plans to market and expand iStockphoto very aggressively in the coming year. Getty is also investing heavily in its marketing and sales teams to boost growth in its right-managed and royalty-free collections and is pushing to boost sales in developing countries. Getty's film and editorial businesses, which combined account for about 18% of revenue, continue to do very well. Getty is clearly in a period of transition. Given its dominant market position, very strong cash flow, and nimble management, we think the company will ultimately regain its footing. While this will likely take several quarters, we'd view this period as an opportunity to build an ownership stake in a high-quality business with good long-term prospects. The stock has taken a beating in the past few months and is now too cheap to ignore.
Sharat Shroff, manager of Matthews Pacific Tiger Fund, on the appeals of India.
Strategists at Matthews Asia believe turbulent times could be ahead.
You should carefully consider the investment objectives, risks, charges and expenses of the Matthews Asia Funds before making an investment decision. A prospectus with this and other information about the Funds may be obtained by visiting matthewsasia.com. Please read the prospectus carefully before investing as it explains the risks associated with investing in international markets. Investing in international markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country and sector funds may be subject to a higher degree of market risk than diversified funds because of concentration in a specific industry, sector or geographic location. Investing in small- and mid-size companies is more risky than investing in large companies as they may be more volatile and less liquid than large companies. Matthews Asia Funds are not available for sale outside the United States, Puerto Rico, Guam and the U.S Virgin Islands. The views and information discussed in this report are as of the date of publication, are subject to change and may not reflect the writers’ current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Matthews Asia Funds are distributed by PFPC Distributors, Inc. ©Matthews International Capital Management, LLC
Rabobank finally settles on a buyer for most of Robeco, Fidelity to close Fidelity Small Cap Value, Matthews Asia to launch 2 new funds, and Victory Capital gains independence.
You should carefully consider the investment objectives, risks, charges and expenses of the Matthews Asia Funds before making an investment decision. A prospectus with this and other information about the Funds may be obtained by visiting matthewsasia.com. Please read the prospectus carefully ...
High equity prices mean you might want to get conservative.