Asia Fixed Income

Matthews Asia Credit Opportunities Fund

  • Bottom-up Asia credit strategy, with a focus on risk-adjusted returns
  • Invest primarily in USD-denominated high yield Asian bonds
  • Flexibility to invest across the spectrum of credit quality and issuers’ capital structure


Inception Date


YTD Return (USD)

(as of 24/01/2022)


Price (USD)

(as of 24/01/2022)

$33.83 million

Fund Assets

(as of 31/12/2021)


Total return over the long term.


Under normal market conditions, the Fund seeks to achieve its investment objective by investing at least 65% of its net assets in income-producing securities including, but not limited to, debt and debt-related instruments and derivative instruments with fixed income characteristics, issued by governments, quasi-governmental entities, supra-national institutions and companies in Asia. On an ancillary basis, the Fund may invest in dividend-paying equity securities of the foregoing issuers. Investments may be denominated in any currency, and may represent any part of a company’s capital structure from debt to equity or with features of both.


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, emerging and frontier market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation, which may adversely affect the value of the Fund's assets. Fixed income investments are subject to additional risks, including, but not limited to, interest rate, credit and inflation risks. The Fund may invest in the following: derivatives which can be volatile and affect Fund performance; high yield bonds (junk bonds) which can subject the Fund to substantial risk of loss; and structured investments which can change the risk or return, or replicate the risk or return of an underlying asset. The Fund invests in holdings denominated in foreign currencies, and is exposed to the risk that the value of the foreign currency will increase or decrease.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 30/09/2015
Fund Assets $33.83 million (31/12/2021)
Base Currency USD
ISIN: LU1275263116 (USD) LU1275263389 (GBP)
Benchmark J.P. Morgan Asia Credit Index
Geographic Focus Asia: Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region
Fees & Expenses
Management Fee 0.65%
Total Expense Ratio As of 30/09/2021 1.25% ( USD ) 1.25% ( GBP )


  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
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As of 31/12/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Credit Opportunities Fund (USD)
0.71% -3.02% -4.68% -4.68% 3.14% 2.61% n.a. 4.08% 30/09/2015
J.P. Morgan Asia Credit Index (USD)
-0.24% -1.36% -2.44% -2.44% 4.92% 3.93% n.a. 4.28%
Matthews Asia Credit Opportunities Fund (GBP)
-0.43% -3.33% -3.46% -3.46% 1.37% 0.77% n.a. 6.06% 30/09/2015
J.P. Morgan Asia Credit Index (GBP)
-2.56% -1.80% -1.54% -1.54% 2.79% 2.04% n.a. 6.17%
As of 31/12/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Credit Opportunities Fund (USD)
0.71% -3.02% -4.68% -4.68% 3.14% 2.61% n.a. 4.08% 30/09/2015
J.P. Morgan Asia Credit Index (USD)
-0.24% -1.36% -2.44% -2.44% 4.92% 3.93% n.a. 4.28%
Matthews Asia Credit Opportunities Fund (GBP)
-0.43% -3.33% -3.46% -3.46% 1.37% 0.77% n.a. 6.06% 30/09/2015
J.P. Morgan Asia Credit Index (GBP)
-2.56% -1.80% -1.54% -1.54% 2.79% 2.04% n.a. 6.17%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016
Matthews Asia Credit Opportunities Fund (USD)
-4.68% 0.93% 14.04% -4.13% 8.16% 10.42%
J.P. Morgan Asia Credit Index (USD)
-2.44% 6.33% 11.35% -0.77% 5.77% 5.81%
Matthews Asia Credit Opportunities Fund (GBP)
-3.46% -2.52% 10.68% 1.18% -1.38% 32.84%
J.P. Morgan Asia Credit Index (GBP)
-1.54% 3.05% 7.05% 5.40% -3.38% 26.21%
For the period ended 31/12/2021
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia Credit Opportunities Fund (USD)
-4.68% 0.93% 14.04% -4.13% 8.16% 30/09/2015
J.P. Morgan Asia Credit Index (USD)
-2.44% 6.33% 11.35% -0.77% 5.77%
Matthews Asia Credit Opportunities Fund (GBP)
-3.46% -2.52% 10.68% 1.18% -1.38% 30/09/2015
J.P. Morgan Asia Credit Index (GBP)
-1.54% 3.05% 7.05% 5.40% -3.38%

Source: Brown Brothers Harriman (Luxembourg) S.C.A., Index data from J.P. Morgan.

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.


(as of 31/12/2021)
5.30% Yield to Worst

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/12/2021)
Modified Duration
Number of Positions

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

Risk Metrics (3 Yr Return)

(as of 31/12/2021)
Upside Capture
Downside Capture
Sharpe Ratio
Information Ratio
Tracking Error

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

Sources: Zephyr StyleADVISOR

Top 10 Positions

(as of 31/12/2021)
Name Sector Currency % Net Assets
ABJA Investment Co. Pte, Ltd., 5.450%, 01/24/2028 Industrial U.S. Dollar 3.6
Indika Energy Capital III Pte, Ltd., 5.875%, 11/09/2024 Industrial U.S. Dollar 3.4
Wanda Properties International Co., Ltd., 7.250%, 01/29/2024 Financial Institutions U.S. Dollar 3.2
Tata Motors, Ltd., 5.875%, 05/20/2025 Industrial U.S. Dollar 3.1
Network i2i, Ltd., 5.650%, 04/15/2068 Industrial U.S. Dollar 3.1
Theta Capital Pte, Ltd., 6.750%, 10/31/2026 Financial Institutions U.S. Dollar 3.0
Standard Chartered PLC, 4.300%, 02/19/2068 Financial Institutions U.S. Dollar 2.9
Luye Pharma Group, Ltd., Cnv., 1.500%, 07/09/2024 Industrial U.S. Dollar 2.8
Baozun, Inc., Cnv., 1.625%, 05/01/2024 Industrial U.S. Dollar 2.8
Shriram Transport Fin, 4.400%, 03/12/2024 Financial Institutions U.S. Dollar 2.7
TOTAL 30.6

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 31/12/2021)
  • Sector Allocation
  • Country Allocation
  • Currency Allocation
  • Quality Distribution
  • Asset Type Breakdown
Sector Fund
Other Financial 18.1
Banking 11.9
Basic Industry 11.3
Consumer Cyclical 9.7
Government Owned, No Guarantee 5.7
Communications 5.6
Consumer Non-Cyclical 5.2
Technology 4.9
Finance Companies 2.7
Government Guaranteed 2.7
Capital Goods 1.7
Sovereign 1.6
Transportation 0.9
Cash and Other Assets, Less Liabilities 18.0

Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.
Sector data based on Bloomberg B Class Sector.
Source: Bloomberg.

By issuer's country of risk Fund
China/Hong Kong 36.3
India 21.7
Indonesia 9.4
Vietnam 4.2
Philippines 3.4
Malaysia 2.1
Thailand 1.9
South Korea 1.4
Taiwan 1.2
Singapore 0.4
Cash and Other Assets, Less Liabilities 18.0

Not all countries are included in the benchmark index. Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.
Supranational is an international organization in which member states transcend national boundaries, (ex. IMF).

Currency Fund Contribution To Duration
U.S. Dollar 100.0 2.5
Quality Distribution Fund
BBB- 6.4
BB+ 6.2
BB 14.8
BB- 13.2
B+ 10.1
B 2.2
B- 3.0
CCC+ 1.5
Not Rated 24.7
Cash and Other Assets, Less Liabilities 18.0

Credit quality is provided for the underlying bond holdings of the Fund and does not include common equities, cash and other assets and percentage values will not total 100%. Credit quality rating symbols reflect that of S&P and generally credit ratings range from AAA (highest) to D (lowest). When ratings from Moody's, S&P and Fitch are available for a bond in the Fund, the middle rating of the three is used. When two ratings are available, the lowest rating is used. When only one rating is provided, that one is used. Foreign government bonds without a specific rating are assigned the country rating provided by one of the three agencies. Securities that are not rated by any one of the three agencies are reflected as such.
Sources: FactSet Research Systems, Moody's, S&P and Fitch

Asset Type Fund
Corporate Bond 58.0
Convertible Bonds 19.8
Government Bond 4.2
Cash and Other Assets, Less Liabilities 18.0

Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.

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

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

Teresa  Kong, CFA photo
Teresa Kong, CFA

Lead Manager

Satya  Patel photo
Satya Patel

Lead Manager


Currency Record Date Ex Date Reinvest Date Payment Date Income Distributions
USD 14/12/2021 15/12/2021 16/12/2021 30/12/2021 $0.043225
GBP 14/12/2021 15/12/2021 16/12/2021 30/12/2021 £0.047775
USD 17/11/2021 18/11/2021 19/11/2021 29/11/2021 $0.043225
GBP 17/11/2021 18/11/2021 19/11/2021 29/11/2021 £0.047775
USD 25/10/2021 26/10/2021 27/10/2021 02/11/2021 $0.043225
GBP 25/10/2021 26/10/2021 27/10/2021 02/11/2021 £0.047775
USD 27/09/2021 28/09/2021 29/09/2021 05/10/2021 $0.043225
GBP 27/09/2021 28/09/2021 29/09/2021 05/10/2021 £0.047775
USD 25/08/2021 26/08/2021 27/08/2021 02/09/2021 $0.043225
GBP 25/08/2021 26/08/2021 27/08/2021 02/09/2021 £0.047775
USD 26/07/2021 27/07/2021 28/07/2021 03/08/2021 $0.043225
GBP 26/07/2021 27/07/2021 28/07/2021 03/08/2021 £0.047775
USD 28/06/2021 29/06/2021 30/06/2021 06/07/2021 $0.043225
GBP 28/06/2021 29/06/2021 30/06/2021 06/07/2021 £0.047775
USD 25/05/2021 26/05/2021 27/05/2021 02/06/2021 $0.043225
GBP 25/05/2021 26/05/2021 27/05/2021 02/06/2021 £0.047775
USD 26/04/2021 27/04/2021 28/04/2021 04/05/2021 $0.043225
GBP 26/04/2021 27/04/2021 28/04/2021 04/05/2021 £0.047775
USD 24/03/2021 25/03/2021 26/03/2021 01/04/2021 $0.043225
GBP 24/03/2021 25/03/2021 26/03/2021 01/04/2021 £0.047775
USD 22/02/2021 23/02/2021 24/02/2021 02/03/2021 $0.043225
GBP 22/02/2021 23/02/2021 24/02/2021 02/03/2021 £0.047775
USD 25/01/2021 26/01/2021 27/01/2021 02/02/2021 $0.043225
GBP 25/01/2021 26/01/2021 27/01/2021 02/02/2021 £0.047775
USD 15/12/2020 16/12/2020 17/12/2020 31/12/2020 $0.148231
GBP 15/12/2020 16/12/2020 17/12/2020 31/12/2020 £0.164011
USD 28/09/2020 29/09/2020 30/09/2020 06/10/2020 $0.149573
GBP 28/09/2020 29/09/2020 30/09/2020 06/10/2020 £0.177483
USD 24/06/2020 25/06/2020 26/06/2020 02/07/2020 $0.153791
GBP 24/06/2020 25/06/2020 26/06/2020 02/07/2020 £0.179179
USD 25/03/2020 26/03/2020 27/03/2020 02/04/2020 $0.161264
GBP 25/03/2020 26/03/2020 27/03/2020 02/04/2020 £0.212289
View History

Fixed Income Distribution Information

Beginning in January 2021, the Matthews Asia Funds – Asia Credit Opportunities Fund will change the approach of distributing share classes from quarterly distribution payments to monthly distribution payments and will implement a stable cents-per-share distribution approach. For 2021, the monthly cents-per-share distribution factors are scheduled to be as follows below. Please note that the distribution amounts are subject to change at any time in the discretion of the Matthews Asia Funds and the Investment Manager. Any changes will be reflected on this website.

  A Distribution Share Class I Distribution Share Class (GBP) I Distribution Share Class
ISIN LU1275262571 LU1275263389 LU1275263116
Monthly Distribution Factor 0.041825 0.047775 0.043225


The Fund may, at its discretion, pay dividends out of the capital or effectively out of capital in respect of the distribution shares. Dividends may be distributed out of gross income while all or part of the fees and expenses are paid out of capital, resulting in an increase in distributable income for the payment of dividends and, therefore, the Fund may effectively pay dividend out of capital. Payment of dividends out of capital and/or effectively out of capital represents a return or withdrawal of part of an investor's original investment, or from any capital gains attributable to that original investment. Any distribution may result in an immediate reduction of the net asset value per share of the Fund.

Please note that a positive distribution yield does not imply a positive return, and past yields are no guarantee of future yields. There is no guarantee that the Fund will pay or continue to pay distributions.

Past performance is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost.

As of April 1, 2014, distributions for this class of the sub fund will pay gross income which may result in expenses being paid out of capital and thereby limit an investor’s potential to generate total return and income.


Period ended 30 September 2021

For the quarter ending September 30, 2021, the Matthews Asia Credit Opportunities Fund returned 0.86%, while its benchmark, the J.P. Morgan Asia Credit Index, returned -0.98%.

Market Environment:

Third quarter was dominated by China. First, there were fast and unexpected regulatory announcements that had major implications on the country’s companies, industries, and economy. Investors were no doubt caught off guard by the speed and magnitude of the regulations spanning from e-commerce to energy to real estate. Within this backdrop was an economy that had to implement selective shutdowns to combat the new Delta variant of COVID. As the overall systematic risk was rising, it certainly didn’t help investor sentiment to witness the deterioration and the default of China Evergrande Group, one of the China’s largest property developers. The default of Evergrande caused a selloff in the bonds of Chinese property developers, as markets worried about the implications of the default of such a large company.

Performance Contributors and Detractors:

The biggest contributor to returns in the quarter were our holdings in Huarong Finance, one of the major Chinese asset managers. We had started a position in Huarong in the first quarter of last year as rumors gripped the market with the expectation that Huarong is a systematically important financial institution. After several months of very little information, Huarong bonds finally rallied on the news that a consortium led by CITIC Group Corp. would make a substantial capital injection into the asset manager. This, along with the reporting of earnings, finally shed light into the underlying financial health and resolution of the future of the asset manager. Outside of China, the Fund’s holding in Pan Brothers, an Indonesia textile manufacturer, contributed to the Fund’s performance. The company has indicated that it remains on-track to refinance its liabilities.

The Fund’s performance detractors were mostly China property bonds and convertible bond holdings in China.  The default of Evergrande spilled over to other property developers, including our holdings in Sunac China and Times China even though these companies have solid balance sheets and no foreseeable liquidity issues in the coming quarters.  Due to the numerous regulations from China on internet, web-based shopping platform Meituan and e-commerce and marketing solutions company Weimob fell during the quarter.

Notable Portfolio Changes:

Portfolio changes during the quarter were concentrated in China. We adjusted our China real estate holdings, reducing positions in holdings that have met the target yield and adding to positions that represent attractive yields given the fundamental credit quality. In particular, we exited Chinese developer Powerlong and Cifi. We added to high-quality developers such as Times China and Sunac China. In addition to real estate, we also added to convertible bond holdings in Baozun Inc., Weimob, and iQIYI Inc. Despite the ongoing regulatory headwinds in China, we believe these issuers represent a good opportunity to capture attractive yield even if assuming no potential upside to the underlying equity. Outside of China, we exited our position in Xero, a New Zealand based accounting software company as the company’s convertible bonds had reached our price target. We also initiated a position in the bonds of HDFC Bank, one of the largest financial institutions in India.


One risk facing our portfolio is the potential forced delisting of Chinese ADRs (American depositary receipts) by the SEC (Securities and Exchange Commission). As owners of some convertible bonds that are convertible into equities which are ADRs, we believe that our downside is mostly covered by the trigger of a change of control put at 100, an option given to bondholders to oblige the issuer to repay the bondholders the notional face value of the bonds, under such an event. We entered into these positions at discounts to par, or face value, and as such believe that the downside risk is contained as we would be able to put the bonds back at a price higher than our basis. However, this does cap the potential upside in these securities and as such we expect to monitor the positions carefully and exit when they reach our price targets.

Looking ahead, we expect the Chinese government to undergo more and deeper easing policies across the economy to alleviate the market fallout from the recent cadence of regulatory announcements. While it may be hard at first to comprehend why the Chinese government effected so much change in such a short time period, we expect the market to come to the view over the next couple of quarters that these series of regulatory changes as the Chinese government’s solutions to the most common pressing issues globally: the rising gap between the rich and the poor, data privacy, consumer and labor protection, and monopolistic behavior. While the west might leave some of these issues to the internet titans like Mark Zuckerberg or Jeff Bezos, the Chinese government has decided to tackle these problems head-on before they become even more protracted. We have already begun to see these countercyclical policies, including the injection of liquidity by the People’s Bank of China as well as deeper engagement of the government in facilitating the restructuring of Evergrande. Despite the size of the Evergrande default, it is not a systematically important financial institution like that of Huarong. We also believe that government policies can alleviate the sector by easing quota on mortgage lending as well as lifting further real estate restrictions at the provincial and local levels. Given this backdrop, we believe that the credit markets have reached “peak uncertainty” in the third quarter and expect credit spreads to tighten over the course of the next several quarters.

Rolling 12 Month Returns For the period ended 31/12/2021 - I (Dist)
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia Credit Opportunities Fund (USD)
-4.68% 0.93% 14.04% -4.13% 8.16% 30/09/2015
J.P. Morgan Asia Credit Index (USD)
-2.44% 6.33% 11.35% -0.77% 5.77%
Matthews Asia Credit Opportunities Fund (GBP)
-3.46% -2.52% 10.68% 1.18% -1.38% 30/09/2015
J.P. Morgan Asia Credit Index (GBP)
-1.54% 3.05% 7.05% 5.40% -3.38%

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 Distribution 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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