Matthews Asia Announces Launch of the China Dividend Fund and the China Small Companies Fund for Hong Kong Retail Investors
Matthews Asia has today announced the registration of two Luxembourg-domiciled UCITS funds, Matthews China Dividend Fund and the Matthews China Small Companies Fund in Hong Kong for retail investors.
San Francisco, CA, April 12, 2013—Matthews Asia (“Matthews”) has today announced the registration of two Luxembourg-domiciled UCITS funds, Matthews China Dividend Fund (Class A Acc. ISIN: LU0871673132) and the Matthews China Small Companies Fund (Class A Acc. ISIN: LU0721876364) in Hong Kong for retail investors. The Matthews China Dividend Fund provides investors with an opportunity to gain exposure to a portfolio dedicated exclusively to investing in Chinese dividend-paying companies while the Matthews China Small Companies Fund gains exposure to a portfolio dedicated exclusively to investing in Chinese small companies.
Matthews China Dividend Fund
The Matthews China Dividend Fund will seek to invest in companies that are well-positioned to grow future dividends while providing an attractive dividend yield. In designing the Fund, Matthews noted that Asia Pacific has evolved into one of the premier regions for investors seeking growing dividends and yield. The universe of dividend-paying companies in Asia Pacific—and in particular China—has expanded significantly. Over 840 Chinese companies paid dividends in 2011, compared with about 240 companies in 1998. Total dividend payment increased from about US$8 billion in 1998 to more than US$72 billion.
The Matthews China Dividend strategy has been available to investors in the U.S. since 2009, and delivered a three-year annualized return of 9.85% versus a benchmark return of 0.77%1. The UCITS fund will follow the same investment approach and is managed by the same team of Yu Zhang, CFA, and Jesper Madsen, CFA. The same team also oversees the Matthews Asia Dividend strategy, which launched in 2006 in the U.S. and in 2010 as a Luxembourg-based UCITS fund.
Yu Zhang, Lead Portfolio Manager comments:
“China’s capital markets initially attracted investors for the growth potential but the country’s equity markets have evolved significantly over the past 10 years such that they have become among the largest and fastest-growing markets in Asia in terms of dividend payments. We now have the ability to invest in a growing universe of dividend-paying companies offering both attractive current yields as well as the potential for future dividend growth.”
Jonathan Schuman, Head of Global Business Development adds:
“We believe dividends represent an important part of an investor’s total return and in today’s low-yielding environment, there continues to be strong demand for funds that can deliver a higher level of income. We are therefore pleased to offer this new Fund, which will invest in Chinese companies that have attractive dividend yields and the potential to grow their dividends over the long term.
Matthews Asia has over 20 years of experience investing in Asia, and we believe this focus gives us the ability to identify companies with strong business models and good growth prospects that can deliver sustainable dividend growth. The launch of the Matthews China Dividend Fund forms part of a broader strategic initiative to deliver our core capabilities to retail and institutional investors outside of the U.S.”
Matthews China Small Companies Fund
The Matthews China Small Companies Fund will seek long-term capital appreciation by investing in the stocks of companies in China, Hong Kong and Taiwan with market capitalizations generally under US$3 billion. The number of publicly listed small Chinese companies (excluding A shares, which are not readily available to foreign investors) has nearly doubled in the past five years and now exceeds 1,000. Managed by Richard Gao, and co-managed by Henry Zhang, CFA, the Fund represents the firm’s third dedicated China strategy. The firm’s other China offerings include the Matthews China and Matthews China Dividend Funds.
The Matthews China Small Companies strategy has been available to investors in the U.S. since 2011. The UCITS fund will follow the same investment approach and is managed by the same team of Richard Gao and Henry Zhang, CFA.
Richard Gao, Lead Portfolio Manager comments:
While large state-owned enterprises have long dominated China’s investment universe, we are seeing small companies benefiting from the country’s shift to a market economy. Matthews has a long history of investing in China and in our experience, investing in the initial stages of a company’s growth has the potential to be very rewarding. Small companies often provide opportunities for higher growth at lower valuations.
Robert Horrocks, PhD, Matthews Asia Chief Investment Officer adds:
In our view, the world’s most populous country is an asset class in itself and affords the opportunity to pursue a variety of strategies. We are excited to be able to offer a new strategy with which investors can access China’s rapidly expanding universe of small companies.
1 Performance for the U.S.-domiciled Matthews China Dividend Fund (Investor Class) as of 31/03/2013.
Performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than the original cost. Current performance may be lower or higher than performance shown. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. Performance details are in U.S. dollar, based on a NAV-to-NAV basis and are net of management fees and other expenses. Performance results, portfolio characteristics and holdings information for the Luxembourg-domiciled UCITS Matthews China Dividend Fund and Matthews China Small Companies Fund may vary from the U.S.-domiciled Matthews China Dividend Fund and Matthews China Small Companies Fund.
At Matthews, we believe in the long-term growth of Asia. Since 1991, we have focused our efforts and expertise within the region, investing through a variety of market environments. As an independent, privately owned firm, Matthews is the largest dedicated Asia-only investment specialist in the United States. With US$23.8 billion in assets under management as of 31 March 2013 and 13 investment strategies, Matthews employs a bottom-up, fundamental investment philosophy, with a focus on long-term investment performance. For more information please visit hk.matthewsasia.com.
U.S. Dollar Share Class Information:
Matthews China Dividend Fund
This material does not constitute or contain an offer, solicitation or investment advice with respect to the purchase of the Fund described herein or any security. This information is not to be construed as a prospectus, a public offering or an offering memorandum as defined under applicable securities legislation.
The subject matter contained herein has been derived from sources believed to be reliable and accurate at the time of compilation. Information provided is unaudited. Neither the Funds nor Matthews International Capital Management, LLC accepts any liability for losses either direct or consequential caused by the use of this information. The views and information discussed represent opinion and an assessment of market conditions at a specific point in time that are subject to change. It should not be relied upon as a recommendation to buy or sell a particular securities or markets in general.
Investments involve risk. Past performance is not a guide to future performance. Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully. Please read the Hong Kong Offering Document for further details including risk factors before investing and consult professional legal, tax and financial advisers as to the suitability of any investment in light of your particular circumstances and applicable citizenship, residence or domicile. Application for shares may only be made by way of the Fund’s most recent Hong Kong Offering Document which is available free of charge from Matthews Global Investors (Hong Kong) Ltd. or your financial professional. Fees and expenses vary among Funds and share classes.
The Board of Directors of the Matthews Asia Funds may, at its discretion, pay dividends out of the capital in respect of the distribution shares of its relevant sub-funds. The Board of Directors of the Fund may amend the dividend policy, subject to the Hong Kong Securities and Futures Commission’s (the“SFC”) prior approval and by giving not less than one month prior notice to the shareholders of the Fund. Dividends paid out of capital amount to a return or withdrawal of part of an investor’s original investment, or from any capital gains attributable to that original investment. Such dividends may result in an immediate decrease of the net asset value per share of this sub-fund. The compositions of dividends (i.e., the relative amount paid from the income and capital) (if any) paid on the distribution shares for the preceding 12 months (or if a sub-fund was launched less than 12 months ago since its inception) are available from Matthews Asia Funds upon request as well as on its website at hk.matthewsasia.com.
This document is issued by Matthews Global Investors (Hong Kong) Ltd and has not been reviewed by the SFC.