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Asia Growth & Income

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

0.04%

YTD Return (USD)

(as of 14/04/2021)

$24.54

Price (USD)

(as of 14/04/2021)

$232.40 million

Fund Assets

(as of 31/03/2021)

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 $232.40 million (31/03/2021)
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 31/03/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund (USD)
-3.36% -2.61% -2.61% 57.38% 7.65% 10.89% 8.16% 8.30% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-1.03% 2.42% 2.42% 52.20% 8.49% 12.52% 7.00% 7.38%
Matthews Asia Dividend Fund (GBP)
-2.10% -3.33% -3.33% 41.26% 8.44% 11.87% 9.87% 9.98% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
0.29% 1.47% 1.47% 36.79% 9.09% 13.44% 8.62% 8.62%
Matthews Asia Dividend Fund (EUR)
-0.15% 1.90% 1.90% 47.09% 9.45% n.a. n.a. 7.84% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
2.21% 6.62% 6.62% 42.10% 10.14% n.a. n.a. 9.01%
As of 31/03/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund (USD)
-3.36% -2.61% -2.61% 57.38% 7.65% 10.89% 8.16% 8.30% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-1.03% 2.42% 2.42% 52.20% 8.49% 12.52% 7.00% 7.38%
Matthews Asia Dividend Fund (GBP)
-2.10% -3.33% -3.33% 41.26% 8.44% 11.87% 9.87% 9.98% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
0.29% 1.47% 1.47% 36.79% 9.09% 13.44% 8.62% 8.62%
Matthews Asia Dividend Fund (EUR)
-0.15% 1.90% 1.90% 47.09% 9.45% n.a. n.a. 7.84% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
2.21% 6.62% 6.62% 42.10% 10.14% n.a. n.a. 9.01%
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 31/03/2021
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia Dividend Fund (USD)
57.38% -15.95% -5.69% 19.46% 12.49% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
52.20% -11.84% -4.85% 20.65% 17.07%
Matthews Asia Dividend Fund (GBP)
41.26% -10.95% 1.37% 5.96% 29.68% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
36.79% -7.35% 2.44% 7.54% 34.56%
Matthews Asia Dividend Fund (EUR)
47.09% -13.81% 3.42% n.a. n.a. 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
42.10% -9.78% 4.22% 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 31/03/2021)
2.02% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews

Portfolio Characteristics

(as of 31/03/2021)
64
Number of Securities

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

17.9x
P/E using FY1 estimates
15.6x
P/E using FY2 estimates
$77.9 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 31/03/2021)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 4.6
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.0
LG Chem, Ltd., Pfd. Materials South Korea 3.0
Breville Group, Ltd. Consumer Discretionary Australia 2.9
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.7
POSCO Materials South Korea 2.6
Lixil Corp. Industrials Japan 2.5
KATITAS Co., Ltd. Real Estate Japan 2.2
Link REIT Real Estate China/Hong Kong 2.2
Hyundai Mobis Co., Ltd. Consumer Discretionary South Korea 2.2
TOTAL 28.9

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
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 20.4 17.2 3.2
Industrials 14.8 10.5 4.3
Financials 14.2 16.8 -2.6
Information Technology 13.8 18.3 -4.5
Communication Services 9.9 10.1 -0.2
Health Care 8.2 7.1 1.1
Real Estate 7.7 4.2 3.5
Materials 6.5 6.1 0.4
Consumer Staples 2.4 5.6 -3.2
Energy 1.2 2.1 -0.9
Utilities 0.0 1.9 -1.9
Cash and Other Assets, Less Liabilities 1.1 0.0 1.1

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

Country Fund Benchmark Difference
Japan 30.4 32.6 -2.2
China/Hong Kong 25.4 29.1 -3.7
South Korea 14.1 8.7 5.4
Australia 9.3 9.2 0.1
Singapore 5.8 1.5 4.3
Taiwan 4.0 8.9 -4.9
India 3.1 6.3 -3.2
Vietnam 3.0 0.0 3.0
Indonesia 1.6 0.8 0.8
Philippines 1.4 0.4 1.0
Bangladesh 0.9 0.0 0.9
Thailand 0.0 1.2 -1.2
Malaysia 0.0 0.9 -0.9
New Zealand 0.0 0.3 -0.3
Cash and Other Assets, Less Liabilities 1.1 0.0 1.1

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

Asset Type Fund
Common Equities and ADRs 93.9
Preferred Equities 5.0
Cash and Other Assets, Less Liabilities 1.1
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 30.9 62.4 -31.5
Large Cap ($10B-$25B) 23.9 20.3 3.6
Mid Cap ($3B-$10B) 24.7 16.7 8.0
Small Cap (under $3B) 19.3 0.6 18.7
Cash and Other Assets, Less Liabilities 1.1 0.0 1.1

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
(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*

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 31 December 2020

For the year ending 31 December 2020, the Matthews Asia Dividend Fund returned 31.25%, while its benchmark, the MSCI All Country Asia Pacific Index returned 20.07%. For the fourth quarter of the year, the Fund returned 14.52% versus 17.88% for the Index.

Market Environment:

Asian equities delivered a strong performance in 2020, despite the severe blow to the region's economy by the COVID-19 pandemic. After suffering a steep loss due to the onset of the virus outbreak early in the year, Asian markets quickly found a firm bottom and staged a sharp rebound, thanks to the unprecedented liquidity injection and fiscal stimulus measures by governments. Investors' confidence was later further bolstered by clear signs of a speedy recovery of the Chinese economy and the breakthrough in COVID vaccine development. Market gained further momentum, pushing Asian equities to a record-high.

Performance Contributors and Detractors:

Our total-return investment approach provides the flexibility of investing in both dividend-paying stocks and dividend growth stocks. During the market meltdown early in the year, we aggressively increased our exposure to dividend growth stocks whose valuation was brought down significantly by the market dislocation but their structural growth remained intact.  This pivot towards dividend growth stocks paid off well for the strategy.

From a country perspective, China/Hong Kong contributed most to the Fund performance for 2020, helped by both stock selection and an overweight allocation relative to the benchmark. China’s effective response in containing the pandemic and a swift recovery of its economy provided a positive backdrop for Chinese equities to perform well. In addition, the further opening up of China's onshore capital market attracted strong capital inflow from global investors. Our portfolio benefited from an increased allocation to China-A shares, as several of our A-share holdings were among the top-performing stocks for the year. On the other hand, our holdings in India detracted the most from relative performance. As India was lagging behind North Asia in terms of pandemic control, cyclical businesses suffered a demand shock and their shares underperformed.

From a sector perspective, the portfolio’s overweight to and stock selection in consumer discretionary was the top contributor to Fund performance. Our holdings in Chinese auto-parts and auto dealerships performed strongly during the year, as demand recovered quickly in China and our holdings further solidified their industry leadership. On the other hand, communication services was the bottom-performing sector. Several of our traditional telecom stocks underperformed during the year, as growth-oriented stocks outperformed value stocks.

Turning to individual stocks, among the top-performing stocks for the year was our holding in LG Chemical based in South Korea. Traditionally considered a petrochemical business, LG Chemical has been investing aggressively in its electric vehicle (EV) battery business over the last several years. Today, LG Chemical is ranked among the top EV battery makers globally. Recognizing this paradigm shift of the global automobile industry, investors started bidding up share prices of key players along the EV industry value chain, and the company’s share price appreciated significantly. On the flipside, Hyundai Mobis, an auto-parts business also based in South Korea, was among the bottom-performing holdings for the year. Mobis saw a substantial, negative impact from the COVID-19 pandemic as its downstream auto OEM (original equipment manufacturer) customers faced both demand collapse and production disruption. Despite the short-term lag underperformance, we believe our investment thesis on Mobis remains valid. A potential value-unlocking, triggered by Hyundai Group's restructuring and Mobis' increased focus towards vehicle electrification, could be positive for Mobis’ valuation re-rating and dividend growth.

Portfolio Changes:

In the fourth quarter, we initiated two new financial stocks: AIA Group, a Hong Kong-based life insurance business with strong market presence across Asia, and Postal Savings Bank, a commercial bank with a strong deposit franchise in rural China. The financial sector was the worse-performing sector within Asia during the year and both AIA and Postal Savings Bank underperformed. However, we believe both stocks are currently priced at attractive levels versus their long-term growth potentials, and think the negative impact from COVID has been sufficiently reflected in the underperforming share price. In addition, an improving outlook on economic recovery, helped by vaccine rollouts in 2021, could be a tailwind for interest-rate sensitive stocks like financials to perform.

During the quarter, we exited one stock, China Resources Land, a Chinese real estate developer. We exited our position as our investment thesis for the company—value-unlocking from a potential spinoff of CR Land's property management business—materialized after a successful listing of its property management division in Hong Kong.

Outlook:

The resurgence of COVID-19 and the vaccine rollout are likely to drive the market volatility in the near term. Taking a more disciplined approach managing the pandemic, Asia is relatively better positioned for a potential post-pandemic economic recovery. Corporate earnings recovery and liquidity conditions should be both closely monitored to determine the strength of the current market rally. Geopolitical factors, especially U.S. – China relations under the Biden administration, will also influence the unfolding of Asia market in the new year. We believe a total-return approach, balancing dividend income with dividend growth, should continue to help us uncover attractive market opportunities in 2021.

 

 

Rolling 12 Month Returns For the period ended 31/03/2021 - I (Acc)
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia Dividend Fund (USD)
57.38% -15.95% -5.69% 19.46% 12.49% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
52.20% -11.84% -4.85% 20.65% 17.07%
Matthews Asia Dividend Fund (GBP)
41.26% -10.95% 1.37% 5.96% 29.68% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
36.79% -7.35% 2.44% 7.54% 34.56%
Matthews Asia Dividend Fund (EUR)
47.09% -13.81% 3.42% N.A. N.A. 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
42.10% -9.78% 4.22% 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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