Asia Growth

Matthews China Fund

  • High-conviction equity portfolio seeks companies benefiting from China’s domestic consumption
  • All-cap fundamental GARP approach driven by on-the-ground, proprietary research
  • Combines long-term core holdings with more opportunistic ideas to provide consistency through cycles


Inception Date


YTD Return (USD)

(as of 14/04/2021)


Price (USD)

(as of 14/04/2021)

$153.85 million

Fund Assets

(as of 31/03/2021)


Seeks to achieve long term capital appreciation.


The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in equities of companies located in China, and may invest the remainder of its net assets in other permitted assets on a worldwide basis. For the purpose of this policy, China includes the People’s Republic of China, its administrative and other districts, such as Hong Kong, as well as Taiwan.


The value of an investment in the Fund can go down as well as up and possible loss of principal is a risk of investing. Investments in international and emerging market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. The Fund invests in holdings denominated in foreign currency, and is exposed to the risk that the value of the foreign currency will increase or decrease. The Fund invests primarily in equity securities, which may result in increased volatility. Investments in a single-country fund may be subject to a higher degree of market risk than diversified funds because of concentration in a specific country.

The risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 26/02/2010
Fund Assets $153.85 million (31/03/2021)
Base Currency USD
ISIN: LU0491817440 (USD) LU0594556135 (GBP)
Benchmark MSCI China Index
Geographic Focus China and Taiwan: China includes its administrative and other districts, such as Hong Kong.
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2020 1.25% ( USD ) 1.25% ( GBP )


  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
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As of 31/03/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-5.28% 0.81% 0.81% 61.17% 14.08% 21.09% 8.53% 9.07% 26/02/2010
MSCI China Index (USD)
-6.29% -0.43% -0.43% 43.81% 8.41% 16.29% 7.49% 8.13%
Matthews China Fund (GBP)
-4.08% 0.00% 0.00% 44.59% 14.92% 22.17% 10.25% 10.46% 28/02/2011
MSCI China Index (GBP)
-5.03% -1.35% -1.35% 29.24% 9.01% 17.24% 9.11% 9.75%
As of 31/03/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-5.28% 0.81% 0.81% 61.17% 14.08% 21.09% 8.53% 9.07% 26/02/2010
MSCI China Index (USD)
-6.29% -0.43% -0.43% 43.81% 8.41% 16.29% 7.49% 8.13%
Matthews China Fund (GBP)
-4.08% 0.00% 0.00% 44.59% 14.92% 22.17% 10.25% 10.46% 28/02/2011
MSCI China Index (GBP)
-5.03% -1.35% -1.35% 29.24% 9.01% 17.24% 9.11% 9.75%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews China Fund (USD)
43.38% 33.92% -19.89% 57.70% -3.95% -0.45% -2.95% 6.75% 11.90% -18.00%
MSCI China Index (USD)
29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26% 3.96% 23.10% -18.24%
Matthews China Fund (GBP)
38.50% 29.88% -15.40% 43.82% 15.48% 4.66% 3.00% 4.49% 7.16% n.a.
MSCI China Index (GBP)
25.66% 18.88% -13.70% 40.97% 20.60% -2.27% 15.00% 2.03% 17.69% n.a.
For the period ended 31/03/2021
Name 2021 2020 2019 2018 2017 Inception Date
Matthews China Fund (USD)
61.17% -2.29% -5.73% 43.53% 22.17% 26/02/2010
MSCI China Index (USD)
43.81% -5.66% -6.08% 39.15% 19.93%
Matthews China Fund (GBP)
44.59% 3.51% 1.39% 27.27% 40.92% 28/02/2011
MSCI China Index (GBP)
29.24% -0.86% 1.11% 24.04% 37.85%

Source: Brown Brothers Harriman (Luxembourg) S.C.A.

Since inception performance for share classes with less than one year of history represents actual performance, not annualised. In addition, for share classes less than a year old, Year to Date Return is calculated since inception. Where no past performance is shown there was insufficient data available in that year to provide performance.

Performance details provided are based on a NAV-to-NAV basis with any dividends reinvested, and are net of management fees and other expenses. Performance data has been calculated in the respective currencies stated above, including ongoing charges and excluding subscription fee and redemption fee you might have to pay.

All performance quoted represents past performance and is not indicative of future performance. Investors may not get back the full amount invested. 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.

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.

Portfolio Characteristics

(as of 31/03/2021)
Number of Securities

Source: Brown Brothers Harriman (Luxembourg) S.C.A

P/E using FY1 estimates
P/E using FY2 estimates
$183.6 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 31/03/2021)
Name Sector % Net Assets
Tencent Holdings, Ltd. Communication Services 9.3
Alibaba Group Holding, Ltd. Consumer Discretionary 7.2, Inc. Consumer Discretionary 6.2
China Construction Bank Corp. Financials 5.3
China Merchants Bank Co., Ltd. Financials 4.7
China International Capital Corp., Ltd. Financials 3.6
Meituan Consumer Discretionary 3.2
CITIC Securities Co., Ltd. Financials 2.8
CIFI Holdings Group Co., Ltd. Real Estate 2.4
Ping An Insurance Group Co. of China, Ltd. Financials 2.3
TOTAL 47.0

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: Brown Brothers Harriman (Luxembourg) S.C.A

Portfolio Breakdown (%)

(as of 31/03/2021)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Financials 26.4 14.5 11.9
Consumer Discretionary 22.7 33.9 -11.2
Communication Services 12.6 20.5 -7.9
Information Technology 10.2 6.0 4.2
Health Care 6.9 6.7 0.2
Materials 6.9 2.2 4.7
Industrials 6.5 4.7 1.8
Real Estate 4.2 4.0 0.2
Consumer Staples 1.0 4.4 -3.4
Utilities 1.0 2.0 -1.0
Energy 0.0 1.2 -1.2
Cash and Other Assets, Less Liabilities 1.5 0.0 1.5

Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 61.8 73.5 -11.7
Large Cap ($10B-$25B) 16.6 15.5 1.1
Mid Cap ($3B-$10B) 17.9 10.5 7.4
Small Cap (under $3B) 2.1 0.5 1.6
Cash and Other Assets, Less Liabilities 1.5 0.0 1.5
China Exposure Portfolio Weight
SAR (Hong Kong) 40.3
A Shares 28.2
H Shares 22.1
Overseas Listed Companies (OL) 6.6
China-affiliated corporations (CAC) 1.3
Cash and Other Assets, Less Liabilities 1.5

Definitions: SAR (Hong Kong) companies are companies that conduct business in Hong Kong and/or mainland China. China-affiliated corporations [CAC], also known as "Red Chips," are mainland China companies with partial state ownership listed in Hong Kong, and incorporated in Hong Kong. China A Shares are Mainland Chinese companies incorporated in China and listed on the Shanghai or Shenzhen exchanges, available mostly to local Chinese investors and qualified institutional investors. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. Overseas Listed [OL] companies are companies that conduct business in mainland China but listed in overseas markets such as Japan, Singapore, Taiwan and the United States.

Source: FactSet Research Systems unless otherwise noted.
Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Percentage values may be derived from different data sources and may not be consistent with other Fund literature.


  • 3 YEAR
  • 5 YEAR
  • 10 YEAR
(as of 22/01/2021)

Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.

Overall Morningstar RatingTM is reflective of the USD Accumulation Share class. Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Copyright ©2021 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is provided for reference purposes only.

The Overall Morningstar®️ Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings.

Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Portfolio Managers

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Lead Manager

Winnie  Chwang photo
Winnie Chwang



Period ended 31 December 2020

For the year ending 31 December 2020, the Matthews China Fund returned 43.38%, while its benchmark, the MSCI China Index, returned 29.67%. For the fourth quarter, the Fund returned 16.71% versus 11.21% for the Index.

Market Environment:

Chinese equities were stand-out performers among global peers in 2020. Following some early missteps in addressing the pandemic, Chinese authorities shifted gears quickly, acting decisively to limit travel and controlling its borders while working with world health organizations to control the outbreak. In addition, policy actions meant to assist small and medium-size enterprises were implemented including an increase in loan quotas, lowering of borrowing rates, a delay in loan repayments and tax relief. The result was an early 2020 outperformance of Chinese equities. The second quarter of 2020 was lackluster for equity prices, even though anecdotes from our local offices and official economic data implied that recovery was well under way as factory workers reported back to the assembly line, local shops and restaurants accepted walk-in customers and some travel restrictions were lifted.

Chinese equities posted strong returns in the third quarter but most of those gains were registered in the first two weeks of the quarter—reflecting increased tensions between the U.S. and China. Chinese manufacturing data pointed to a continued V-shaped recovery and a bright spot within the data suggested that small, private businesses were beginning to participate in the rebound. In the final quarter of the calendar year, Chinese equity returns were strong again, but lagged other markets in the region. Some growth stocks within the communication services, health care and discretionary sectors took a breather while valued-oriented names within materials, energy and financials outperformed. With the coronavirus pandemic held in check across China, cities, governments, businesses and schools remained open for regular, daily activities. Government micro-reforms in areas such as health care, education and housing continue to support sustainable growth in economic activity.

Performance Contributors and Detractors:

Stock selection in information technology, industrials and financials contributed to performance for the full year. A contributor among individual stocks was e-commerce company, which experienced increased demand for its services during the pandemic. As the second largest e-commerce company in China, has a broad reach and its profitability is improving. Logistics-oriented businesses tend to be very capital intensive in their early years, but with much of’s logistic infrastructure already in place, we expect that the business may be less capital intensive going forward. China has many metropolitan densities and the complexity of making deliveries to most households is high, creating a competitive moat for an e-commerce player such as

On the other hand, stock selection in health care and materials, as well as an overweight to real estate, detracted from performance for the full year. A detractor among individual stocks was Sinopharm, China’s largest pharmaceutical distributor and one of the few distributors with a meaningful nationwide presence. The company saw weak results in the first half of 2020 owing to negative economic impact from the COVID-19 outbreak. Hospital visitation during the pandemic fell, which reduced pharmaceutical distribution needs. At the same time, the company saw increased operational expenses associated with the prevention and containment of the virus situation. Sinopharm trades at attractive valuations and commands a still large and dominant presence in China’s healthcare distribution industry. We continue to monitor this position for updates and operational improvements.

Notable Portfolio Changes:

During the fourth quarter, we initiated new positions in Kingsoft Corp. and Wuxi Lead Intelligent Equipment Co. Kingsoft is a technology company with three main businesses: online gaming, cloud services and software services. The company’s online gaming business provides a stable and growing source of cash flow. Its cloud services business supports companies with growing data and storage needs, including major clients in the social media and entertainment industries. Kingsoft’s software services business is growing beyond its traditional presence in enterprise operating systems into consumer facing software services where penetration of paying users is currently very low with room to grow. In our view, Kingsoft trades at a deep discount to the sum of the parts valuations for each of the individual businesses. Wuxi Lead Intelligent Equipment is a full-service battery equipment provider with strong ties to China’s largest battery manufacturer, CATL. We believe that on-going growth in electric vehicle (EV) sales will spur capacity growth for batteries. Such increased CapEx investments drives the need for equipment investments. The company also has an opportunity to expand its customer base from mainly Chinese domestic customers to global clients as well.


Going forward, China seems well positioned for continued stability as monetary aggregates have been balanced for several months while China’s rebounding economy and solid mid-teens consensus earnings growth should support current valuations. The newly released five-year plan could support businesses benefiting from the ‘”dual-circulation” announcement focused on domestic demand and self-sufficiency in key areas of technology, innovation, health care and the digitalization of the economy.

Market participants believe a Biden administration could potentially focus less on trade-related issues, in favor of a multi-lateral approach on topics related to market access, climate change and human rights. Investors expect more predictability and less headline risk associated with U.S. – China relations going forward. On the domestic front, the latest Chinese economic data points to continued recovery led by consumption, manufacturing activity and investment. In addition, analysts expect upside earnings momentum to carry through 2021 driven by robust economic activity.


Rolling 12 Month Returns For the period ended 31/03/2021 - I (Acc)
Name 2021 2020 2019 2018 2017 Inception Date
Matthews China Fund (USD)
61.17% -2.29% -5.73% 43.53% 22.17% 26/02/2010
MSCI China Index (USD)
43.81% -5.66% -6.08% 39.15% 19.93%
Matthews China Fund (GBP)
44.59% 3.51% 1.39% 27.27% 40.92% 28/02/2011
MSCI China Index (GBP)
29.24% -0.86% 1.11% 24.04% 37.85%

Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg


Performance figures discussed in the Fund Manager Commentary above reflect that of the Institutional Accumulation Class Shares and has been calculated in USD. Performance details provided for the Fund are based on a NAV-to-NAV basis, with any dividends reinvested, and are net of management fees and other expenses. Past performance information is not indicative of future performance. Investors may not get back the full amount invested.

The information contained herein has been derived from sources believed to be reliable and accurate at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information.

Information contained herein is sourced from Matthews Asia unless otherwise stated. The views and opinions in this commentary were as of the report date, subject to change and may not reflect the writer’s current views. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the managers reserve the right to change their views about individual stocks, sectors, and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund’s future investment intent. It should not be assumed that any investment will be profitable or will equal the performance of any securities or any sectors mentioned herein. The information does not constitute a recommendation to buy or sell any securities mentioned.

Investors should not invest in the Fund solely based on the information in this material alone. Please refer to the Prospectus for further details of the risk factors. 

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