Matthews Asia, the US-headquartered fund management house with a strong Asia focus, has expanded part of its fund range with the launch of an Asia smaller companies fund, holding assets in countries apart from Japan.

The new fund is called the Matthews Asia Small Companies Fund, a Luxembourg-domiciled vehicle that aims to capture long-term capital growth mainly in companies with a market cap between $100 million to $3 billion at the time of purchase, according to a statement from the firm.

The firm said the investment universe for small firms has widened in recent years, resulting in approximately 3,800 small companies listed on the stock markets of Asia ex-Japan today - compared with less than 3,400 of comparable market cap in the US.

“Matthews believes that supportive regulation and improving access to capital markets in Asia, a region known for its strong entrepreneurial spirit, will ensure that small companies continue to play an important part in the region’s growing economies,” the statement said.

The fund’s strategy has been available to investors in the US since 2008, and delivered a three-year annualised return of 10.39 per cent versus a benchmark return of 4.45 per cent. The UCITS fund will follow the same investment approach and is managed by the same lead portfolio manager, Lydia So.

Matthews Asia, which says it is the largest dedicated Asia-only investment firm in the US, has $23.8 billion of assets under management and a total of 13 investment strategies.