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Asia Growth & Income

Matthews Asia ex Japan Dividend Fund

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

30/11/2015

Inception Date

-18.39%

YTD Return (USD)

(as of 20/05/2022)

$20.77

Price (USD)

(as of 20/05/2022)

$514.01 million

Fund Assets

(as of 30/04/2022)

Objective

Seeks total return with an emphasis on providing current income.

Strategy

The Fund pursues its objective by primarily investing in companies that exhibit attractive dividend yields and/or the potential to grow dividends over time. 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 (including, for example, investment trusts and other financial instruments) of companies located in the Asia ex Japan region.

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, 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. 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.

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

Fund Facts
Inception Date 30/11/2015
Fund Assets $514.01 million (30/04/2022)
Base Currency USD
ISIN: LU1311311358 (USD) LU1311311515 (GBP) LU1311311788 (EUR)
Bloomberg Symbol MAAEIAU:LX (USD) MAAEIAG:LX (GBP) MAEJDIE: LX (EUR)
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia ex Japan: Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2022 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
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As of 30/04/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-4.84% -10.98% -16.50% -18.58% 11.04% 11.76% n.a. 12.47% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-5.16% -9.91% -12.70% -20.80% 2.95% 5.47% n.a. 7.52%
Matthews Asia ex Japan Dividend Fund (GBP)
-0.47% -4.83% -10.31% -9.80% 12.37% 12.45% n.a. 15.65% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-0.54% -3.73% -5.82% -12.66% 4.25% 6.10% n.a. 10.61%
Matthews Asia ex Japan Dividend Fund (EUR)
0.24% -5.79% -10.32% -6.71% n.a. n.a. n.a. 13.72% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
0.03% -4.27% -5.89% -9.63% n.a. n.a. n.a. 7.35%
As of 31/03/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-3.63% -12.26% -12.26% -9.92% 13.41% 13.00% n.a. 13.53% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-2.74% -7.95% -7.95% -14.42% 5.44% 7.05% n.a. 8.53%
Matthews Asia ex Japan Dividend Fund (GBP)
-1.69% -9.88% -9.88% -5.51% 13.31% 11.87% n.a. 15.96% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-0.89% -5.31% -5.31% -10.32% 5.08% 5.95% n.a. 10.85%
Matthews Asia ex Japan Dividend Fund (EUR)
-2.80% -10.53% -10.53% -4.87% n.a. n.a. n.a. 14.28% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-1.82% -5.92% -5.92% -9.60% n.a. n.a. n.a. 7.71%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016
Matthews Asia ex Japan Dividend Fund (USD)
3.96% 51.86% 16.73% -12.37% 47.29% 6.89%
MSCI All Country Asia ex Japan Index (USD)
-4.46% 25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Asia ex Japan Dividend Fund (GBP)
5.36% 46.62% 13.21% -7.38% 34.23% 28.50%
MSCI All Country Asia ex Japan Index (GBP)
-3.58% 21.49% 13.94% -8.78% 29.78% 26.15%
Matthews Asia ex Japan Dividend Fund (EUR)
12.67% n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan Index (EUR)
2.79% n.a. n.a. n.a. n.a. n.a.
For the period ended 31/03/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-9.92% 79.90% -9.99% -4.31% 32.01% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-14.42% 57.77% -13.18% -4.95% 26.16%
Matthews Asia ex Japan Dividend Fund (GBP)
-5.51% 61.41% -4.62% 2.87% 17.09% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-10.32% 41.79% -8.76% 2.33% 12.45%
Matthews Asia ex Japan Dividend Fund (EUR)
-4.87% n.a. n.a. n.a. n.a. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-9.60% n.a. n.a. 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 30/04/2022)
1.76% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 30/04/2022)
Fund Benchmark
Number of Positions 53 1,221
Weighted Average Market Cap $74.7 billion $120.3 billion
Active Share 82.6 n.a.
P/E using FY1 estimates 16.5x 11.8x
P/E using FY2 estimates 14.1x 10.9x
Price/Cash Flow 12.6 7.4
Price/Book 2.5 1.6
Return On Equity 18.5 15.0
EPS Growth (3 Yr) 9.1% 14.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 30/04/2022)
8.25%
Alpha
0.90
Beta
94.41%
Upside Capture
68.26%
Downside Capture
0.59
Sharpe Ratio
1.05
Information Ratio
7.74%
Tracking Error
81.70

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

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 30/04/2022)
Name Sector Country % Net Assets
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.7
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.4
E Ink Holdings, Inc. Information Technology Taiwan 3.1
Netease, Inc. Communication Services China/Hong Kong 2.7
Mobile World Investment Corp. Consumer Discretionary Vietnam 2.7
PT Bank Rakyat Indonesia Persero Financials Indonesia 2.6
Baidu, Inc. Communication Services China/Hong Kong 2.6
United Overseas Bank, Ltd. Financials Singapore 2.5
ESR Kendall Square REIT Co., Ltd. Real Estate South Korea 2.5
Link REIT Real Estate China/Hong Kong 2.4
TOTAL 31.2

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 30/04/2022)
  • 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).

Asset Type Fund
Common Equities and ADRs 95.3
Cash and Other Assets, Less Liabilities 4.7

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
(as of 24/01/2022)

Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.

The Elite RatingTMsystem is proprietary to FundCalibre Ltd, but should not be taken as a recommendation.

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 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 March 2022

For the quarter ending 31 March 2022, the Matthews Asia ex Japan Dividend Fund returned -12.26%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -7.95% over the same period.

Market Environment:

The first quarter of 2022 was choppy for Asian equity markets, weighed down by the spillover from the U.S. Fed’s monetary tightening, continued regulatory pressure on Chinese internet companies, economic headwinds from the Russia/Ukraine conflict and China’s zero-COVID policy. Southeast Asian equities were a bright spot during the quarter, driven by market optimism regarding economic normalization and the re-opening of country borders in the region. Among Southeast Asia, Indonesia was the best performing market, with additional help from rising commodity prices. China was the worst performer, amid worries about regulatory risks and the economic consequences of its draconian COVID-related lock-down measures in several major cities. Overall, Asian growth stocks performed poorly during the quarter on the back of rising U.S. interest rates and perceived headwinds relating to higher import costs.

Performance Contributors and Detractors:

On a country basis, our stock selection in China detracted the most from relative performance during the period. Holdings in Chinese dividend growth stocks experienced a sharp valuation contraction, as tightening U.S. monetary policy and geopolitical uncertainties caused significant disruption to growth equities. On the other hand, our allocation to Vietnam (which is not represented in the benchmark) contributed positively to relative performance, led by strong share performance of IT service company FPT Corporation.

From a sector perspective, stock selection within consumer discretionary detracted the most from relative performance, as the portfolio’s holdings in auto parts companies struggled, weighed down by a dampened profit margin outlook due to the sharp commodity price spike experienced since the onset of the Russia/Ukraine military conflict.

Turning to individual stocks, our long-time holding in Chinese auto body parts manufacturer Minth Group was a notable detractor to performance in the quarter. The rapid rise in aluminum and plastics prices after the Russian invasion of Ukraine posed challenges for Minth to pass through cost increases to its customers on a timely basis. Also, further disruption of Minth’s logistics network, prolonged semiconductor chip shortages due to geopolitical events and China’s recent Covid outbreak negatively impacted global auto manufacturing production and Minth’s near-term business growth. Nevertheless, we believe Minth’s market positioning remains favorable in the electric vehicle supply chain in the medium term, as exemplified by its strong order growth from global car manufacturers for its products used in electric vehicles. The company’s planned A-share listing in the near future may provide additional capital for future growth as well.

On the positive side, our holding in Bank Rakyat, a leading Indonesian financial services company, was a significant contributor to absolute performance in the quarter. Similar to many other countries in Asia, Indonesia’s economy has gradually reopened and resumed normal business activities, benefiting loan growth and asset quality at the bank.

Notable Portfolio Changes:

During the quarter, we increased our allocation to the financials sector by adding commercial banking businesses in developed Asia, where local monetary policy is more closely following the U.S. rate-hike cycle. These include United Overseas Bank (UOB) in Singapore and CTBC Financial Holding in Taiwan. In addition to U.S. rate sensitivity, UOB benefited from its strong franchise in wealth management for clients in the region and CTBC enjoyed a tailwind from Taiwanese corporates’ capital investment needs overseas, which was fueled by demand for semiconductors and technology products globally.

Also, we increased exposure to “re-opening” businesses, as more Asian economies are moving from a pandemic control phase into a “live with COVID-19” endemic phase. One example is our new position in Bangkok Dusit Medical Services, a premium hospital operator in Thailand. The company’s earnings growth is expected to pick up pace on the back of normalization of non-Covid medical operations and the recovery of medical tourism in Thailand.

Lastly, we’ve sought to upgrade the quality of holdings in dividend growth stocks, as the growth-to-value rotation offered opportunities to own certain structural-growth businesses at much reduced valuation multiples—but with their long-term growth outlook intact. To fund these new positions, we exited a few stocks in the consumer discretionary and technology sectors whose underlying fundamentals, in our view, no longer represented the best risk-reward opportunities.

Outlook:

While the U.S. monetary tightening cycle was expected by market participants, renewed concerns on growth both in the U.S. and Asia are headwinds facing Asian equities at the moment. The prospect of a protracted war between Russia and Ukraine further exacerbates near-term market volatility and risks of elevated commodity prices and crippled supply chains.

In particular, China’s continued implementation of its zero-COVID policy to battle the current Omicron surge has taken a toll on its economy, and as a result, corporate earnings and supply chain throughput could face downward pressure. China’s policy makers have been launching a series of economic stimulus policies to counter the effects of COVID measures, and we expect such policy accommodation to accelerate in an effort to put a floor to growth. We also observe more supportive stances taken by Chinese policy makers on private enterprises, capital markets and cooperation with U.S. regulators on overseas listings.

Going forward, we are looking for businesses with a strong ability to fend off inflation cost pressures, maintain their earnings and dividend growth outlook, and that are potential beneficiaries from a stronger policy response from China, including an easing of regulatory uncertainties.

Earnings growth is not representative of the Fund’s future performance.

Rolling 12 Month Returns For the period ended 31/03/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-9.92% 79.90% -9.99% -4.31% 32.01% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-14.42% 57.77% -13.18% -4.95% 26.16%
Matthews Asia ex Japan Dividend Fund (GBP)
-5.51% 61.41% -4.62% 2.87% 17.09% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-10.32% 41.79% -8.76% 2.33% 12.45%
Matthews Asia ex Japan Dividend Fund (EUR)
-4.87% N.A. N.A. N.A. N.A. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-9.60% N.A. N.A. 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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