Asia Growth

Matthews India Fund

  • Unconstrained all-cap strategy focused on companies with a sustainable competitive edge and pricing power, which are able to perform throughout economic cycles
  • Fundamental bottom-up approach to seek well-run entrepreneurial companies with sustainable organic growth and trustworthy managements


Inception Date


YTD Return (USD)

(as of 03/12/2021)


Price (USD)

(as of 03/12/2021)

$31.36 million

Fund Assets

(as of 31/10/2021)


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 publicly traded common stocks, preferred stocks and convertible securities of companies located in India, and may invest the remainder of its net assets in other permitted assets on a worldwide basis.


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 30/06/2011
Fund Assets $31.36 million (31/10/2021)
Base Currency USD
ISIN: LU0594557885 (USD) LU0594558263 (GBP)
Benchmark S&P Bombay Stock Exchange 100 Index
Geographic Focus India
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 30/09/2021 1.00% ( USD ) 1.00% ( GBP )


  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
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As of 30/11/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews India Fund (USD)
-3.94% -4.15% 21.53% 32.18% 14.08% 12.59% 11.68% 7.95% 30/06/2011
S&P Bombay Stock Exchange 100 Index (USD)
-3.40% -2.83% 20.94% 32.37% 14.54% 14.74% 11.11% 7.32%
Matthews India Fund (GBP)
-0.67% -0.89% 24.47% 32.13% 12.41% 11.11% 13.46% 9.86% 30/06/2011
S&P Bombay Stock Exchange 100 Index (GBP)
-0.53% 0.64% 24.32% 32.75% 13.01% 13.37% 13.00% 9.31%
As of 30/09/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews India Fund (USD)
0.91% 11.56% 27.95% 58.31% 17.48% 12.27% 11.09% 8.62% 30/06/2011
S&P Bombay Stock Exchange 100 Index (USD)
1.25% 12.23% 26.01% 57.47% 17.65% 14.05% 10.49% 7.89%
Matthews India Fund (GBP)
3.42% 15.01% 29.89% 50.90% 16.28% 11.43% 12.73% 10.49% 30/06/2011
S&P Bombay Stock Exchange 100 Index (GBP)
3.44% 15.06% 27.78% 51.03% 16.42% 13.21% 12.16% 9.76%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews India Fund (USD)
18.20% 2.66% -9.78% 37.88% -3.05% -2.73% 54.46% -4.82% 28.80%
S&P Bombay Stock Exchange 100 Index (USD)
13.92% 8.53% -6.00% 41.88% 2.32% -6.41% 31.40% -4.70% 28.62%
Matthews India Fund (GBP)
14.19% -0.37% -4.76% 25.78% 16.54% 2.28% 63.93% -6.94% 23.43%
S&P Bombay Stock Exchange 100 Index (GBP)
10.68% 4.30% -0.23% 29.51% 22.13% -1.02% 39.60% -6.59% 22.36%
For the period ended 30/09/2021
Name 2021 2020 2019 2018 2017 Inception Date
Matthews India Fund (USD)
58.31% -2.58% 5.14% -4.64% 15.36% 30/06/2011
S&P Bombay Stock Exchange 100 Index (USD)
57.47% -4.34% 8.11% -0.09% 18.59%
Matthews India Fund (GBP)
50.90% -6.45% 11.36% -2.05% 11.55% 30/06/2011
S&P Bombay Stock Exchange 100 Index (GBP)
51.03% -8.94% 14.74% 2.63% 14.83%

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 31/10/2021)
Fund Benchmark
Number of Positions 53 101
Weighted Average Market Cap $51.9 billion $67.3 billion
Active Share 53.6 n.a.
P/E using FY1 estimates 31.8x 24.3x
P/E using FY2 estimates 24.4x 20.5x
Price/Cash Flow n.a. 16.5
Price/Book 4.4 3.6
Return On Equity 15.9 15.7
EPS Growth (3 Yr) 13.0% 11.0%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2021)
Upside Capture
Downside Capture
Sharpe Ratio
Information Ratio
Tracking Error

Fund Risk Metrics are reflective of Class I USD ACC shares.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/10/2021)
Name Sector % Net Assets
Reliance Industries, Ltd. Energy 6.9
HDFC Bank, Ltd. Financials 6.9
ICICI Bank, Ltd. Financials 5.8
Infosys, Ltd. Information Technology 5.5
Bajaj Finance, Ltd. Financials 4.4
Kotak Mahindra Bank, Ltd. Financials 3.6
Avenue Supermarts, Ltd. Consumer Staples 3.5
Housing Development Finance Corp., Ltd. Financials 3.0
Shriram City Union Finance, Ltd. Financials 2.7
Tata Consultancy Services, Ltd. Information Technology 2.7
TOTAL 45.0

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 31/10/2021)
  • Sector Allocation
  • Market Cap Exposure

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

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

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

Overall Morningstar RatingTM is reflective of the noted 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

Peeyush  Mittal, CFA photo
Peeyush Mittal, CFA

Lead Manager

Sharat  Shroff, CFA photo
Sharat Shroff, CFA



Period ended 30 September 2021

For the quarter ending 30 September 2021, the Matthews India Fund returned 11.56% while its benchmark, the S&P Bombay Stock Exchange 100 Index, returned 12.23%.

Market Environment:

The positive performance of the Indian equity market continued during the third quarter, led by sustained high retail equity flows, as demonstrated by the near doubling of individual retail brokerage accounts over the last 12 months. Equity market performance over the last 18 months, coupled with extremely low interest rates for savings accounts, were the two primary drivers of higher retail participation in equity markets. To a lesser extent, the shift to work-from-home culture was also a contributor. In addition, the regulatory crackdown in China over the last few months has made global investors look at India more favorably within the context of regional equity exposure.

After a disastrous second COVID-19 wave, India’s economic improvement has been swift. Confidence in India’s ability to handle a potential third wave has been boosted given the rapid and extensive vaccination program that is underway. India is now vaccinating over 10 million people on a daily basis. Increasing rates of vaccination are reducing the underlying fear and improving the probability of economic normalization in months to come. This has had a positive impact in particular on the financials sector, where investors are beginning to be more optimistic about normalization of credit quality and credit growth in quarters to come.

Performance Contributors and Detractors:

On a sector basis, our allocation to health care was the biggest detractor during the quarter. The health care sector in general went out of favor due to concerns of generic drug pricing pressure in the U.S. While the portfolio has very little exposure to manufacturers involved in marketing generic formulations in the U.S., given the negative sentiment in the sector as a whole, our holdings in Laurus Labs and Neuland Labs were both down. With increased active pharmaceutical ingredient (API) outsourcing to India, we continue to believe these holdings have the potential to achieve good growth in coming quarters, and we expect both of them to sustain or have multiple re-ratings from current levels.

On the other hand, our stock selection within the information technology (IT) sector contributed to relative performance. Mindtree and Larsen & Toubro Infotech (LTI) were the biggest positive contributors in the sector. India-based IT services firms are seeing strong demand on the back of greater outsourcing of digital services by corporates globally. Investors seem to expect the current growth trend to continue for the coming two to three years, which has driven a substantial valuation expansion in this sector, including Mindtree and LTI.

Notable Portfolio Changes:

We made a few changes during the third quarter, including exiting motorcycle and commercial vehicle maker Eicher Motors and leading auto component manufacturer Endurance Technologies. India is seeing substantial adoption of electric two-wheelers on the back of significantly lower total cost of ownership compared to traditional two-wheelers based on internal combustion engines. This ongoing shift is likely to negatively impact the volumes for original equipment manufacturers (OEMs) and suppliers in this segment of the market, prompting our decision to exit our holdings in this space.

In terms of additions to the portfolio, we initiated a position in IndusInd Bank. Under IndusInd’s new management, the bank is building a very good deposits franchise, something which it had always lacked. We believe this is going to help bring its cost of funds down and will allow it to diversify away from high risk lending. IndusInd is also calibrating its off balance sheet exposures in an effort to reduce the chances for negative surprises in future. Given these changes along with prospects for cyclical recovery in India, we think IndusInd is poised for healthy returns going forward.


While we remain optimistic about the macroeconomic environment in India, we are also closely watching certain headwinds that can have a negative impact on equity markets in particular. We continue to believe that India is coming out of a cyclical slowdown which started in 2018. Low real interest rates within India are fueling a revival of the real estate sector which has been in the doldrums for the last five or six years. We believe this trend, coupled with the government’s focus on infrastructure creation, will be a major driver of economic improvement in general, and the construction industry in particular, in coming quarters. The government’s emphasis on manufacturing, coupled with a global push for alternate suppliers outside of China, is also leading to greater private capital expenditures in manufacturing. Additionally, expansion projects announced by core industries like steel and cement will likely lead to job growth, and as a consequence, a faster pace of economic growth compared to prior years. Aside from this, we are also seeing widespread hiring activity in sectors like banking, IT services, and health care, among others, which traditionally have been providers of white collar jobs, but over the past few years have lagged. This is another positive trend from the perspective of supporting sustained growth in consumption in the years to come.

In terms of risk, we continue to remain wary of inflation and its potential to surprise on the upside. With oil prices pushing US$80 per barrel at the end of the quarter, we believe inflationary pressure is going to become more pressing in the months to come. At present, demand continues to be robust but persistent inflation runs the risk of eventual demand destruction. Within the backdrop of inflationary pressure, India’s central bank has been accommodative so far, but it is not clear how long that will last. If the U.S. Fed begins to raise its benchmark interest rate, it seems inevitable that policy tightening would also start in India. In this context, valuations are far above long-term averages and any monetary policy tightening could create a sharp negative correction in the equity markets globally, India included.

Rolling 12 Month Returns For the period ended 30/09/2021 - I (Acc)
Name 2021 2020 2019 2018 2017 Inception Date
Matthews India Fund (USD)
58.31% -2.58% 5.14% -4.64% 15.36% 30/06/2011
S&P Bombay Stock Exchange 100 Index (USD)
57.47% -4.34% 8.11% -0.09% 18.59%
Matthews India Fund (GBP)
50.90% -6.45% 11.36% -2.05% 11.55% 30/06/2011
S&P Bombay Stock Exchange 100 Index (GBP)
51.03% -8.94% 14.74% 2.63% 14.83%

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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