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Matthews Asia Dividend Fund

Snapshot
  • Total return strategy seeks to access the growth of Asia Pacific with lower volatility
  • Unconstrained all-cap portfolio with a quality bias
  • Flexible approach offers participation in both growth and value markets

30/04/2010

Inception Date

4.57%

YTD Return (USD)

(as of 19/01/2021)

$25.65

Price (USD)

(as of 19/01/2021)

$233.94 million

Fund Assets

(as of 31/12/2020)

Objective

Seeks total return with an emphasis on providing current income.

Strategy

The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in income-paying publicly traded common stocks, preferred stocks, convertible preferred stocks and other equity-related instruments of companies located in the Asia Pacific region, 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 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 currencies, 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. There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.

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

Fund Facts
Inception Date 30/04/2010
Fund Assets $233.94 million (31/12/2020)
Base Currency USD
ISIN: LU0491818331 (USD) LU0594556648 (GBP) LU0491818174 (EUR)
Bloomberg Symbol MATAADI:LX (USD) MATAAIA:LX (GBP) MAASDIE:LX (EUR)
Benchmark MSCI All Country Asia Pacific Index
Geographic Focus Asia Pacific: Consists of all countries and markets in Asia, as well as Australia and New Zealand including all developed, emerging and frontier countries and markets in Asia
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2020 1.21% ( USD ) 1.23% ( GBP ) 1.19% ( EUR )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
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As of 31/12/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund (USD)
4.83% 15.27% 31.32% 31.32% 8.19% 11.97% 8.38% 8.77% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
5.84% 17.88% 20.07% 20.07% 7.64% 11.62% 6.68% 7.32%
Matthews Asia Dividend Fund (GBP)
2.20% 8.18% 26.77% 26.77% 7.79% 13.80% n.a. 10.62% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
3.37% 11.48% 16.36% 16.36% 7.27% 13.31% n.a. 8.69%
Matthews Asia Dividend Fund (EUR)
2.33% 10.04% 20.20% 20.20% 7.38% n.a. n.a. 7.84% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
3.47% 12.97% 10.15% 10.15% 6.97% n.a. n.a. 7.73%
As of 31/12/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund (USD)
4.83% 15.27% 31.32% 31.32% 8.19% 11.97% 8.38% 8.77% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
5.84% 17.88% 20.07% 20.07% 7.64% 11.62% 6.68% 7.32%
Matthews Asia Dividend Fund (GBP)
2.20% 8.18% 26.77% 26.77% 7.79% 13.80% n.a. 10.62% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
3.37% 11.48% 16.36% 16.36% 7.27% 13.31% n.a. 8.69%
Matthews Asia Dividend Fund (EUR)
2.33% 10.04% 20.20% 20.20% 7.38% n.a. n.a. 7.84% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
3.47% 12.97% 10.15% 10.15% 6.97% n.a. n.a. 7.73%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Asia Dividend Fund (USD)
31.32% 10.66% -12.85% 33.49% 4.09% 3.87% -0.96% 12.26% 21.06% -9.12%
MSCI All Country Asia Pacific Index (USD)
20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19% 17.05% -14.92%
Matthews Asia Dividend Fund (GBP)
26.77% 7.36% -7.98% 21.75% 25.18% 9.10% 5.11% 9.70% 16.00% n.a.
MSCI All Country Asia Pacific Index (GBP)
16.36% 15.12% -7.86% 20.61% 25.50% 4.01% 6.53% 10.11% 11.91% n.a.
Matthews Asia Dividend Fund (EUR)
20.20% 13.02% -8.85% n.a. n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia Pacific Index (EUR)
10.15% 21.94% -8.88% n.a. n.a. n.a. n.a. n.a. n.a. n.a.
For the period ended 31/12/2020
Name 2020 2019 2018 2017 2016 Inception Date
Matthews Asia Dividend Fund (USD)
31.32% 10.66% -12.85% 33.49% 4.09% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
20.07% 19.74% -13.25% 32.04% 5.21%
Matthews Asia Dividend Fund (GBP)
26.77% 7.36% -7.98% 21.75% 25.18% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
16.36% 15.12% -7.86% 20.61% 25.50%
Matthews Asia Dividend Fund (EUR)
20.20% 13.02% -8.85% n.a. n.a. 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
10.15% 21.94% -8.88% n.a. n.a.

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.

Yield

(as of 31/12/2020)
1.81% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews

Portfolio Characteristics

(as of 31/12/2020)
55
Number of Securities

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

23.4x
P/E using FY1 estimates
18.7x
P/E using FY2 estimates
$81.7 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 31/12/2020)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 5.7
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.7
LG Chem, Ltd., Pfd. Materials South Korea 3.3
Chongqing Brewery Co., Ltd. Consumer Staples China/Hong Kong 2.8
Breville Group, Ltd. Consumer Discretionary Australia 2.8
KATITAS Co., Ltd. Real Estate Japan 2.6
Hoya Corp. Health Care Japan 2.5
MISUMI Group, Inc. Industrials Japan 2.4
Anritsu Corp. Information Technology Japan 2.3
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.2
TOTAL 31.3

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 31/12/2020)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 26.3 17.6 8.7
Information Technology 14.1 18.2 -4.1
Industrials 13.0 10.3 2.7
Financials 9.7 16.0 -6.3
Communication Services 9.5 10.1 -0.6
Consumer Staples 8.6 6.0 2.6
Health Care 6.5 7.8 -1.3
Real Estate 5.4 4.0 1.4
Materials 3.3 6.0 -2.7
Energy 1.1 2.1 -1.0
Utilities 0.0 1.9 -1.9
Cash and Other Assets, Less Liabilities 2.7 0.0 2.7

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

Country Fund Benchmark Difference
China/Hong Kong 30.8 29.6 1.2
Japan 30.6 33.0 -2.4
South Korea 9.5 8.7 0.8
Australia 8.1 9.2 -1.1
Taiwan 6.1 8.2 -2.1
Singapore 5.8 1.4 4.4
India 2.6 6.0 -3.4
Philippines 1.5 0.5 1.0
Thailand 1.2 1.2 0.0
Bangladesh 1.1 0.0 1.1
Malaysia 0.0 1.0 -1.0
Indonesia 0.0 0.9 -0.9
New Zealand 0.0 0.4 -0.4
Cash and Other Assets, Less Liabilities 2.7 0.0 2.7

Not all countries are included in the benchmark index(es).

Asset Type Fund
Common Equities and ADRs 91.9
Preferred Equities 5.5
Cash and Other Assets, Less Liabilities 2.7
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 34.7 62.2 -27.5
Large Cap ($10B-$25B) 19.4 20.2 -0.8
Mid Cap ($3B-$10B) 27.1 16.7 10.4
Small Cap (under $3B) 16.1 0.9 15.2
Cash and Other Assets, Less Liabilities 2.7 0.0 2.7

Source: FactSet Research Systems.

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.

Ratings

  • OVERALL
  • 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 USD Accumulation Share class. Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Copyright ©2020 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*

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

Robert J. Horrocks, PhD photo
Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Co-Manager

S. Joyce Li, CFA photo
S. Joyce Li, CFA

Co-Manager

*No Hong Kong based Co-Manager for the Matthews Asia Funds will exercise investment discretion for or on behalf of the Fund in Hong Kong.

Commentary

Period ended 30 September 2020

For the quarter ending 30 September 2020, the Matthews Asia Dividend Fund returned 17.63%, while its benchmark, the MSCI All Country Asia Pacific Index, returned 8.69%. 

Market Environment:

Asian equity markets further extended its strong rebound during the quarter. The broad MSCI Asia Pacific Index fully recovered the losses it suffered from the earlier COVID-19 market meltdown, finishing the third quarter with a positive year-to-date return. With an effective control of the pandemic, China has seen its economic recovery pace gain speed. Elsewhere in Asia, a combination of continued monetary easing policy and fiscal stimulus measures provided the much needed backstop to the real economy and bolstered market sentiment. In addition, the U.S. dollar weakened markedly during the quarter against most Asian currencies, another tailwind for emerging markets equity performance.

Performance Contributors and Detractors:

During the third quarter, the Fund posted strong performance driven mainly by positive stock selection and sector allocation. By country, China/Hong Kong and Japan were the top contributors to performance. By sector, consumer discretionary and consumer staples added most to the performance. Minth Group, our largest holding in the Fund, appreciated 52% in the quarter and was among the top performers in the quarter. A leading auto parts manufacturer from China, Minth Group navigated pandemic related disruptions well and further established its foothold in the global electric vehicle supply chain by gaining key industry leaders as clients. Another top contributor was LIXIL Group, a global supplier of housing fixtures listed in Japan. Under the leadership of CEO Kinya Seto, the company has been refocusing on its core businesses, streamlining cost structure and improving capital allocation. We are optimistic on the company’s strategic directions and believe its reforms will boost shareholder returns over the long run.

On the other hand, an underweight in the Philippines and India were slight detractors from relative performance. Additionally, our underweight in the information technology sector also detracted moderately. By individual securities Yuexiu Transport Infrastructure was the top performance detractor. A toll road asset owner in mainland China, Yuexiu's earnings for the first-half of the year were severely impacted by the COVID-19 outbreak. Despite the near-term headwind, Yuexiu’s underlying toll road operations started to recover during the third quarter with an improving traffic data. With a cash-generative business model, we believe Yuexiu should be able to restore its earnings power and its dividend growth going into 2021.

Notable Portfolio Changes:

Among the new positions we initiated during the quarter were several regional insurance businesses, namely Dai-ichi Life in Japan, Cathay Financials in Taiwan, and QBE in Australia. As these insurance businesses generally maintain a large fixed-income investment portfolio, their share performance is often sensitive towards a steepening yield curve. From a portfolio construction standpoint, we believe these interest-rate sensitive financial stocks collectively could be used as a "portfolio hedge" against a sudden change of forward-looking inflation expectation and a steepening yield curve, triggered by a potential medical breakthrough of COVID-19 treatment and vaccine and the global economic recovery gaining firm footing.

We exited a few holdings in the consumer staples sector during the quarter, which we either believe the "stay-home" benefits from COVID-19 pandemic have been fully reflected into the company’s share price, or the underlying business has deteriorated, making our initial investment thesis no longer valid. These included Sun Art Retail, BGF Retail, and WH Group. We decided to re-deploy capital elsewhere, including funding some of the new positions.

Outlook:

Within the Asian region, while North Asia has been leading the economic recovery effort, Southeast Asia and India are still struggling with an effective control of the virus, making their recovery picture still elusive at this moment.

Externally, the Nov. U.S. election outcome will also undoubtedly influence the post-pandemic economic and geopolitical conditions for Asia. Notwithstanding, corporate earnings in Asia this year have been resilient so far. We see considerable resilience in Asia’s dividends, providing global investors with the potential for diversification and growth.

Rolling 12 Month Returns For the period ended 31/12/2020 - I (Acc)
Name 2020 2019 2018 2017 2016 Inception Date
Matthews Asia Dividend Fund (USD)
31.32% 10.66% -12.85% 33.49% 4.09% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
20.07% 19.74% -13.25% 32.04% 5.21%
Matthews Asia Dividend Fund (GBP)
26.77% 7.36% -7.98% 21.75% 25.18% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
16.36% 15.12% -7.86% 20.61% 25.50%
Matthews Asia Dividend Fund (EUR)
20.20% 13.02% -8.85% N.A. N.A. 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
10.15% 21.94% -8.88% N.A. N.A.

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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