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
-1.39%
YTD Return (USD)
(as of 03/12/2021)
$24.19
Price (USD)
(as of 03/12/2021)
$235.33 million
Fund Assets
(as of 31/10/2021)
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 | $235.33 million (31/10/2021) | |
| 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 30/09/2021 | 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR ) | |
Performance
- Monthly
- Quarterly
- Calendar Year
- Rolling 12 Month
Returns
As of 30/11/2021
As of 30/09/2021
For the years ended December 31st
For the period ended 30/09/2021
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 31/10/2021)
1.40%
Dividend Yield
Source: FactSet Research Systems, Bloomberg, Matthews Asia
Portfolio Characteristics
(as of 31/10/2021)Sources: Factset Research Systems, Inc.
Risk Metrics (3 Yr Return)
(as of 31/10/2021)1.35%
Alpha
0.93
Beta
92.80%
Upside Capture
88.57%
Downside Capture
0.80
Sharpe Ratio
0.10
Information Ratio
5.64%
Tracking Error
86.44
R²
Fund Risk Metrics are reflective of Class I USD ACC shares.
Sources: Zephyr StyleADVISOR
Top 10 Holdings
(as of 31/10/2021)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
- Country Allocation
- Asset Type Breakdown
- Market Cap Exposure
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
Not all countries are included in the benchmark index(es).
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
(as of 31/10/2021)
CATEGORY: Asia-Pacific Equity
Square Mile Rating Report
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*
Yu Zhang, CFA
Lead Manager
Yu Zhang, CFA
Portfolio Manager
Yu Zhang is a Portfolio Manager at Matthews Asia. He manages the firm's Asia Dividend and Asia ex Japan Dividend Strategies, and co-manages the China Dividend Strategy. Prior to joining Matthews Asia in 2007 as a Research Associate, Yu was an Analyst researching Japanese companies at Aperta Asset Management from 2005 to 2007. Before receiving a graduate degree in the U.S., he was an Associate in the Ningbo, China office of Mitsui & Co., a Japanese general trading firm. Yu received a B.A. in English Language from the Beijing Foreign Studies University, an MBA from Suffolk University and an M.S. in Finance from Boston College. He is fluent in Mandarin.
S. Joyce Li, CFA
Lead Manager
S. Joyce Li, CFA
Portfolio Manager
S. Joyce Li is a Portfolio Manager at Matthews Asia and manages the firm’s Asia Dividend Strategy and co-manages the Asia ex Japan Dividend and China Dividend Strategies. Prior to joining the firm in 2016, she was a Portfolio Manager and Principal at Marvin & Palmer Associates, where she co-managed equity investments in the Asia Pacific markets between 2007 and 2016. Joyce started her investment career as a Senior Investment Associate at Wilmington Trust. Joyce received an MBA with honors from the Wharton School of the University of Pennsylvania and a M.S. in Computer Science from the University of Virginia. She is fluent in Mandarin and Cantonese.
Robert J. Horrocks, PhD
Co-Manager
Robert J. Horrocks, PhD
Chief Investment Officer and Portfolio Manager
Robert Horrocks is Chief Investment Officer and Portfolio Manager at Matthews Asia and has been a Matthews Asia Funds Trustee since 2018. He manages the firm's Asian Growth and Income and co-manages the Asia Dividend and Asia ex Japan Dividend Strategies. As Chief Investment Officer, Robert oversees the firm's investment process and investment professionals and sets the research agenda for the investment team. Before joining Matthews Asia in 2008, Robert was Head of Research at Mirae Asset Management in Hong Kong. From 2003 to 2006, Robert served as Chief Investment Officer for Everbright Pramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securities in Hong Kong before moving on to spend eight years working in several different Asian jurisdictions for Schroders, including stints as Country General Manager in Taiwan, Deputy Chief Investment Officer in Korea and Designated Chief Investment Officer in Shanghai. Robert earned his PhD in Chinese Economic History from Leeds University in the United Kingdom, and is fluent in Mandarin.
Sherwood Zhang, CFA
Co-Manager
Sherwood Zhang, CFA
Portfolio Manager
Sherwood Zhang is a Portfolio Manager at Matthews Asia. He manages the firm's China Dividend Strategy and co-manages the Asia Dividend and Asia ex Japan Dividend Strategies. Prior to joining Matthews Asia in 2011, Sherwood was an analyst at Passport Capital from 2007 to 2010, where he focused on such industries as property and basic materials in China as well as consumer-related sectors. Before earning his MBA in 2007, Sherwood served as a Senior Treasury Officer for Hang Seng Bank in Shanghai and Hong Kong, and worked as a Foreign Exchange Trader at Shanghai Pudong Development Bank in Shanghai. He received his MBA from the University of Maryland and his Bachelor of Economics in Finance from Shanghai University. Sherwood is fluent in Mandarin and speaks conversational Cantonese.
*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.
Latest Dividend Research & Insights
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 Markit iBoxx Asian Local Bond Index tracks the total return performance of a bond portfolio consisting of local-currency denominated, high quality and liquid bonds in Asia ex-Japan. The Markit iBoxx Asian Local Bond Index includes bonds from the following countries: China (on- and offshore markets), Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.
The J.P. Morgan Asia Credit Index (JACI) tracks the total return performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and is partitioned by country, sector and credit rating. JACI includes bonds from the following countries: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand.
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 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).
Commentary
Period ended 30 September 2021
For the quarter ending 30 September 2021, the Matthews Asia Dividend Fund returned -2.97%, while its benchmark, the MSCI All Country Asia Pacific Index, returned -4.30% over the same period.
Market Environment:
The third quarter of 2021 was broadly negative for Asia equities, with notable exceptions India and Japan. Indian economic data and fund inflows recovered on the back of improving trends in COVID-related cases, although the recent surge in oil prices could become a headwind for India’s currency and current accounts. Japan equities bounced back strongly during the quarter, as the country’s vaccination ratio continued to climb amid steady decreases in COVID-related cases. The ruling Liberal Democratic Party’s election of its new leader suggests no major shifts in Japan’s macro or monetary policy. During the quarter, China was the worst performer due to ongoing regulatory concerns and China Evergrande Group-related fears. Consumption slowed in recent months on weak consumer sentiment and government measures to control COVID cases. Recent power shortages posed additional risk for near-term GDP growth. Regional sector performance was divergent in the quarter. Cyclical sectors including energy and materials outperformed while consumer discretionary and communication services sectors were weak.
Performance Contributors and Detractors:
During the third quarter of 2021, stock selection in Australia and Japan contributed the most to the Fund’s relative performance. During a pandemic-related market sell-off last year, we initiated a few positions in strategically unique assets in Australia, including an airport operator and a leading English language testing and college placement service provider. These holdings performed strongly in the third quarter as a result of the market refocusing on the underlying value of these businesses. In Japan, the portfolio benefited from strong earnings reported by a few of our dividend growth holdings that demonstrated their ability in navigating complex supply chain challenges and dynamic domestic pandemic situations. On the other hand, our underweight position in India detracted the most from relative performance, as India was the top performing market in the quarter.
From a sector perspective, stock selection in industrials and communication services contributed the most to relative performance. Our holdings in the industrials sector were leaders in their specific fields and benefited from the global recovery of industrial activities. Our positions in telecom operators in the Philippines and Bangladesh performed strongly in the quarter. Meanwhile, stock selection in health care and materials were the largest drag to relative performance.
With respect to individual securities, IDP Education in Australia was the top contributor to performance in the third quarter. IDP Education is a global leader in student placements and its growth is expected to resume with gradual normalization of education activities. Another holding among top contributors was Sydney Airport. In early July the company received a takeover bid from a consortium valuing the company at a 42% premium to its previous close price. We took profit and exited the position. On the other hand, the two largest detractors to absolute performance were Chinese holdings, Minth Group, a leading auto parts manufacturer, and Jinxin Fertility Group, a hospital services provider specializing in assisted reproductive services in China. Minth Group was affected by continued semiconductor shortages among its customers, an issue that we believe will get resolved over the next few quarters. Jinxin Fertility was hurt by negative sentiment on the Chinese health care sector on the back of government policy concerns during the quarter. In our opinion, Jinxin is not impacted by the recent government pricing policies and the company’s strong demand growth is aligned with the government’s goal to improve the birth rate in China.
Notable Portfolio Changes:
During the third quarter, we initiated a position in KakaoBank Corp., an internet bank in South Korea. This fast-growing bank leverages on the successful “Kakao ecosystem” that its parent company, Kakao Corp., has created within the country to deliver banking services to customers with a low-cost business model. The company has been profitable since 2019 and has the potential to further disrupt the industry and gain market share in the future, in our view. Despite KakaoBank’s substantial growth opportunities, we believe the company is well positioned to initiate its first dividend payment post-listing due to its strong cash flow generation and the high ownership retained by its parent company.
To fund these new positions, we exited several holdings, including names like TDK Corporation on a slower growth profile and Sydney Airport on value realization on takeover bids.
Outlook:
The structural consumption growth trend in Asia faces a temporary slowdown in 2021, caused by weak consumer sentiment and government measures seeking to stop the spread of COVID-19 variants in the region. Meanwhile, the ongoing manufacturing and industrial up-cycles moderated recently on challenges from raw material cost inflation and supply chain shortages. We believe that after the recent market pullback, Asia’s equity markets have largely priced in rising inflation expectations and near-term growth moderation.
Looking ahead, we are constructive on Asian equities, anticipating a positive inflection point in monetary and fiscal policies in China to support its domestic economy. Recent progress on COVID-19 vaccination rollout across the region is also encouraging. Compared to major global markets, Asian equities, as represented by the MSCI All Country Asia Pacific Index, trade at a reasonable valuation level of 14.4x forward P/E. Heading into the last quarter of 2021 and beyond, we believe that high quality businesses with sustainable cash flows are likely to lead, while resumption of structural growth drivers such as domestic consumption and industrial upgrades could return to drive further earnings growth. A balanced portfolio exposure between dividend growth stocks and high-dividend-yielding stocks is the best way to capture opportunities in the current environment in our opinion.
Earnings growth is not representative of the Fund’s future performance.
Rolling 12 Month Returns For the period ended 30/09/2021 - I (Acc)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg