A focus on Asia—and providing compelling investment solutions for our clients—is what we believe distinguishes us among investment managers. Our insights into investment opportunities and risks are backed by proprietary research, a collaborative culture and 30 years of experience.
High-conviction growth strategy seeks alpha in Japan
Unconstrained all-cap approach seeking Japanese companies positioned to benefit from Asia's growth
Invests in companies leveraged to the fast growing consumer demand across Asia, global industry leaders and entrepreneurial companies providing innovative domestic solutions
The Fund promotes environmental and social characteristics according to Article 8 of SFDR. Furthermore, the Fund uses both activity- and norm-based exclusions. Information relating to the environmental and social characteristics of this Fund is available in the prospectus.
Strategy
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 Japan, and may invest the remainder of its net assets in other permitted assets on a worldwide basis.
Risks
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 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.
These and other risks associated with investing in the Fund can be found in the
prospectus.
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 Japan, and may invest the remainder of its net assets in other permitted assets on a worldwide basis.
Risks
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 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
Performance
Monthly
Quarterly
Calendar Year
Rolling 12 Month Returns
As of 30/06/2025
Annualized Returns
Name
1MO
3MO
YTD
1YR
3YR
5YR
10YR
Since Inception
Inception Date
Matthews Japan Fund (USD)
1.81%
13.10%
12.55%
16.65%
17.40%
8.66%
7.12%
7.47%
30/04/2015
MSCI Japan Index (USD)
1.73%
11.39%
11.95%
14.29%
15.46%
9.15%
6.45%
6.30%
Matthews Japan Fund (GBP)
0.09%
6.92%
2.91%
7.61%
12.65%
6.27%
8.56%
8.69%
30/04/2015
MSCI Japan Index (GBP)
0.11%
4.92%
2.32%
5.43%
10.90%
6.91%
7.92%
7.50%
Matthews Japan Fund (USD Hedged)
2.51%
10.04%
5.11%
7.48%
24.60%
18.09%
n.a.
13.60%
03/04/2017
MSCI Japan Index 100% Hedged to USD (USD Hedged)
2.18%
8.41%
4.66%
7.02%
23.44%
19.19%
n.a.
13.61%
As of 30/06/2025
Annualized Returns
Name
1MO
3MO
YTD
1YR
3YR
5YR
10YR
Since Inception
Inception Date
Matthews Japan Fund (USD)
1.81%
13.10%
12.55%
16.65%
17.40%
8.66%
7.12%
7.47%
30/04/2015
MSCI Japan Index (USD)
1.73%
11.39%
11.95%
14.29%
15.46%
9.15%
6.45%
6.30%
Matthews Japan Fund (GBP)
0.09%
6.92%
2.91%
7.61%
12.65%
6.27%
8.56%
8.69%
30/04/2015
MSCI Japan Index (GBP)
0.11%
4.92%
2.32%
5.43%
10.90%
6.91%
7.92%
7.50%
Matthews Japan Fund (USD Hedged)
2.51%
10.04%
5.11%
7.48%
24.60%
18.09%
n.a.
13.60%
03/04/2017
MSCI Japan Index 100% Hedged to USD (USD Hedged)
2.18%
8.41%
4.66%
7.02%
23.44%
19.19%
n.a.
13.61%
For the years ended December 31st
Name
2024
2023
2022
2021
2020
2019
2018
2017
2016
Matthews Japan Fund (USD)
16.58%
20.15%
-26.87%
-1.96%
32.83%
25.54%
-20.58%
33.40%
0.19%
MSCI Japan Index (USD)
8.68%
20.77%
-16.31%
2.04%
14.91%
20.07%
-12.58%
24.39%
2.73%
Matthews Japan Fund (GBP)
18.26%
13.70%
-18.12%
-0.63%
28.30%
21.61%
-16.16%
21.57%
20.43%
MSCI Japan Index (GBP)
10.62%
13.96%
-5.76%
2.98%
11.36%
15.44%
-7.14%
13.62%
22.53%
Matthews Japan Fund (USD Hedged)
33.63%
35.89%
-14.54%
9.63%
25.29%
26.94%
-20.85%
n.a.
n.a.
MSCI Japan Index 100% Hedged to USD (USD Hedged)
27.09%
36.24%
-1.62%
13.96%
10.14%
21.81%
-13.31%
n.a.
n.a.
For the period ended 30/06/2025
Name
2025
2024
2023
2022
2021
Inception Date
Matthews Japan Fund (USD)
16.65%
17.45%
18.12%
-26.39%
27.15%
30/04/2015
MSCI Japan Index (USD)
14.29%
13.53%
18.62%
-19.64%
25.25%
Matthews Japan Fund (GBP)
7.61%
17.51%
13.05%
-15.75%
12.55%
30/04/2015
MSCI Japan Index (GBP)
5.43%
14.18%
13.31%
-8.59%
12.03%
Matthews Japan Fund (USD Hedged)
7.48%
37.29%
31.10%
-9.26%
30.82%
03/04/2017
MSCI Japan Index 100% Hedged to USD (USD Hedged)
7.02%
33.52%
31.65%
-1.00%
29.16%
Source: Brown Brothers Harriman (Luxembourg) S.C.A.
All returns over 1 year are annualized
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 30/06/2025)
Fund
Benchmark
Number of Positions
50
183
Weighted Average Market Cap
$61.0 billion
$68.5 billion
Active Share
60.7
n.a.
P/E using FY1 estimates
17.0x
15.3x
P/E using FY2 estimates
15.3x
13.8x
Price/Cash Flow
11.5
9.5
Price/Book
2.0
1.5
Return On Equity
13.7
12.6
EPS Growth (3 Yr)
7.0%
2.2%
Sources: Factset Research Systems, Inc.
Risk Metrics (3 Yr Return)
(as of 31/05/2025)
Category
3YR Return Metric
Alpha
0.01%
Beta
1.09
Upside Capture
114.83%
Downside Capture
113.84%
Sharpe Ratio
0.44
Information Ratio
0.09
Tracking Error
4.8%
R²
92.71
0.01%
Alpha
1.09
Beta
114.83%
Upside Capture
113.84%
Downside Capture
0.44
Sharpe Ratio
0.09
Information Ratio
4.80%
Tracking Error
92.71
R²
Fund Risk Metrics are reflective of Class I USD ACC shares.
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 30/06/2025)
Sector Allocation
Market Cap Exposure
Sector
Fund
Benchmark
Difference
Industrials
23.1
24.1
-1.0
Consumer Discretionary
17.6
17.3
0.3
Information Technology
16.3
13.8
2.5
Financials
14.6
16.0
-1.4
Consumer Staples
7.9
5.4
2.5
Materials
5.7
3.5
2.2
Health Care
5.1
7.0
-1.9
Communication Services
4.0
8.8
-4.8
Real Estate
2.9
2.3
0.6
Utilities
0.0
1.0
-1.0
Energy
0.0
0.8
-0.8
Cash and Other Assets, Less Liabilities
2.6
0.0
2.6
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
Equity market cap of issuer
Fund
Benchmark
Difference
Mega Cap (over $25B)
62.2
70.5
-8.3
Large Cap ($10B-$25B)
22.3
21.6
0.7
Mid Cap ($3B-$10B)
8.9
8.0
0.9
Small Cap (under $3B)
4.1
0.0
4.1
Cash and Other Assets, Less Liabilities
2.6
0.0
2.6
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.
ESG Characteristics
(as of 31/03/2025)
Business Involvement
Sustainability Attributes
Name
Fund
Benchmark
Difference
Controversial Weapons
Fund Coverage: 99%Benchmark Coverage: 100%
0.0
0.8
-0.8
Tobacco
Fund Coverage: 99%Benchmark Coverage: 100%
0.0
0.9
-0.9
Name
Fund
Benchmark
Difference
UN Global Compact Violators
Fund Coverage: 100%Benchmark Coverage: 100%
0.0
0.0
0.0
Board Diversity
Fund Coverage: 100%Benchmark Coverage: 100%
18.8
19.6
-0.8
Board Diversity: Represents the weighted average ratio of female board members in investee companies. Tobacco: Represents companies that generate more than 5% of revenue from tobacco manufacturing exposure to or production or that generate more than 50% of revenue from tobacco retail. UN Global Compact Violators: Represents companies that have been assessed as failing to comply with the 10 United Nations Global Compact Principles by ISS-ESG Norms-Based Research. Different ESG research providers may come to different conclusions on the severity of the violation. Controversial weapons include companies with involvement in the following: anti-personnel mines; biological and chemical weapons; cluster weapons; depleted uranium; nuclear weapons and white phosphorus. A company is excluded if it is directly involved in the production, selling and/or distribution of (parts of) controversial weapons and this involvement concerns the core weapon system, or components/services of the core weapon system that are tailor-made and essential for the lethal use of the weapon.
Investment process integrates ESG factors and sustainability risks based on proprietary and third-party research
Applies norms- and activity-based exclusions
Promotes environmental and social characteristics
Has a sustainable investment objective
Conducts engagement
Exercises Voting Rights
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 Fund’s investment objective and risk factors.
Shuntaro Takeuchi is a Portfolio Manager at Matthews. Prior to joining the firm in 2016, he was an Executive Director for Japan Equity Sales at UBS Securities LLC in New York. Beginning in 2003, he worked on both Japanese Equity and International Equity Sales at UBS Japan Securities, based in Tokyo, and held the position of Special Situations Analyst from 2006 to 2008, and Head of International Equity Sales from 2009 to 2013. Before that, he worked at Merrill Lynch Japan from 2001 to 2003 in U.S. Equity Sales. Shuntaro received a B.A. in Commerce and Management from Hitotsubashi University in Tokyo. He is fluent in Japanese.
Donghoon Han is a Portfolio Manager at Matthews. Prior to joining Matthews in 2020, Donghoon was Vice President and portfolio manager at Goldman Sachs Asset Management in Tokyo, responsible for investments in technology, automotive and transportation sectors in Japan. From 2014 to 2016, he was a senior associate at Citadel Global Equities researching technology and industrial sectors in Japan. From 2010 to 2014, Donghoon worked at Dodge & Cox as an equity research associate covering global technology sector with a focus on semiconductors and electronic components. He received B.A. in International Liberal Arts from Waseda University in Tokyo. Donghoon is fluent in Japanese and Korean. He is a Chartered Member of the Securities Analysts Association of Japan.
Japan’s market posted a strong performance in the quarter. Investors were initially concerned in the period about central bank monetary policy and potential for rate hikes later in the year, while U.S. tariff concerns impacted exporters, especially in the auto sector.
After the introduction and then pause of U.S. reciprocal tariffs in April, investor flows into Japan surged as interest in international markets grew amid questions over the strength of U.S. economic growth and its erratic trade policy.
Several areas of Japan’s domestic economy, including insurance among financials, and consumer spending, showed robust performance in the quarter. Additionally, capital efficiency reforms remain a key market attraction for investors.
Contributors and Detractors
For the quarter ended June 30, 2025, the Japan Fund returned 13.10%, (I Acc USD) while its benchmark, the MSCI Japan Index, returned 11.39% over the same period.
On a sector basis, the top three contributors to relative performance were consumer discretionary, industrials and consumer staples due to stock selection. The top three detractors were communication services due to an underweight allocation, health care and real estate due to stock selection.
The largest contributors to absolute performance included NEC, an information technology (IT) company, Tokyo Electron, an electronics company, and Ajinomoto, a food and beverages producer. The top three detractors included Sumitomo Mitsui Financial Group, a leading financials company, Maruwa, an electronic materials manufacturer, and Sysmex Corp., a health-care company.
Outlook
We anticipate increased market volatility amid the possibility of a U.S. - Japan trade agreement and/or the U.S. imposing a long-term tariffs on Japan. However, Japan could be less exposed to U.S. tariffs given its history of direct investing in the U.S. and its ability to dampen its trade surplus through defense spending and other measures.
Japan’s macro environment is hard to project, thus our approach is pivoted to generating alpha through stock selection, focusing on domestic total returns (from both earnings growth and dividends) and company-specific idiosyncratic opportunities.
Rolling 12 Month Returns For the period ended 30/06/2025 - I (Acc)
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.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI China A Onshore Index captures large and mid cap representation across China securities listed on the Shanghai and Shenzhen exchanges. Index is for comparative purposes only and it is not possible to invest directly in an index.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
Commentary
Period ended 30 June 2025
Market Environment
Contributors and Detractors
Outlook
Rolling 12 Month Returns For the period ended 30/06/2025 - I (Acc)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg