TOP
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

5.11%

YTD Return (USD)

(as of 03/12/2021)

$25.73

Price (USD)

(as of 03/12/2021)

$536.14 million

Fund Assets

(as of 31/10/2021)

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 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 30/11/2015
Fund Assets $536.14 million (31/10/2021)
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 30/09/2021 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 30/11/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
0.98% -0.04% 5.07% 15.44% 22.24% 18.39% n.a. 17.05% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-3.86% -6.60% -5.79% 0.66% 10.86% 10.85% n.a. 10.28%
Matthews Asia ex Japan Dividend Fund (GBP)
4.40% 3.32% 7.66% 15.34% 20.44% 16.85% n.a. 19.38% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-0.39% -2.84% -2.66% 1.57% 9.53% 9.59% n.a. 12.68%
Matthews Asia ex Japan Dividend Fund (EUR)
3.61% 4.22% 13.56% 21.71% n.a. n.a. n.a. 29.16% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-1.16% -2.05% 2.41% 6.97% n.a. n.a. n.a. 14.53%
As of 30/09/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-2.22% -6.12% 2.78% 24.49% 18.50% 17.07% n.a. 17.14% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-4.15% -9.23% -3.32% 14.73% 9.50% 10.44% n.a. 11.08%
Matthews Asia ex Japan Dividend Fund (GBP)
0.25% -3.20% 4.46% 18.77% 17.31% 16.22% n.a. 19.37% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-2.17% -7.00% -1.98% 10.00% 8.29% 9.62% n.a. 13.20%
Matthews Asia ex Japan Dividend Fund (EUR)
0.00% -3.57% 8.96% 25.93% n.a. n.a. n.a. 29.32% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-2.37% -7.12% 2.07% 16.08% n.a. n.a. n.a. 16.45%
For the years ended December 31st
Name 2020 2019 2018 2017 2016
Matthews Asia ex Japan Dividend Fund (USD)
51.86% 16.73% -12.37% 47.29% 6.89%
MSCI All Country Asia ex Japan Index (USD)
25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Asia ex Japan Dividend Fund (GBP)
46.62% 13.21% -7.38% 34.23% 28.50%
MSCI All Country Asia ex Japan Index (GBP)
21.49% 13.94% -8.78% 29.78% 26.15%
For the period ended 30/09/2021
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
24.49% 31.32% 1.79% 11.01% 19.06% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
14.73% 18.16% -3.15% 1.74% 23.02%
Matthews Asia ex Japan Dividend Fund (GBP)
18.77% 26.07% 7.82% 13.95% 15.25% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
10.00% 12.63% 2.49% 4.67% 19.11%
Matthews Asia ex Japan Dividend Fund (EUR)
25.93% n.a. n.a. n.a. n.a. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
16.08% 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 31/10/2021)
1.30% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/10/2021)
Fund Benchmark
Number of Positions 61 1,209
Weighted Average Market Cap $74.4 billion $152.8 billion
Active Share 84.8 n.a.
P/E using FY1 estimates 21.2x 13.7x
P/E using FY2 estimates 17.9x 12.9x
Price/Cash Flow 17.6 9.7
Price/Book 3.0 1.9
Return On Equity 19.3 13.0
EPS Growth (3 Yr) 18.7% -3.0%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2021)
9.85%
Alpha
0.84
Beta
94.20%
Upside Capture
58.37%
Downside Capture
1.34
Sharpe Ratio
1.14
Information Ratio
7.68%
Tracking Error
80.93

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

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/10/2021)
Name Sector Country % Net Assets
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.2
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.4
E Ink Holdings, Inc. Information Technology Taiwan 2.9
Mobile World Investment Corp. Consumer Discretionary Vietnam 2.3
Link REIT Real Estate China/Hong Kong 2.2
HDFC Bank, Ltd. Financials India 2.2
Nam Long Investment Corp. Real Estate Vietnam 2.1
Ashok Leyland, Ltd. Industrials India 2.1
FPT Corp. Information Technology Vietnam 2.1
Hoa Phat Group JSC Materials Vietnam 2.0
TOTAL 26.5

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).

Asset Type Fund
Common Equities and ADRs 97.4
Warrant/Rights 0.1
Cash and Other Assets, Less Liabilities 2.5

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 29/07/2021)

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

Overall Morningstar RatingTM is reflective of the 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 30 September 2021

For the quarter ending 30 September 2021, the Matthews Asia ex Japan Dividend Fund returned -6.12%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -9.23% over the same period.

Market Environment:

The third quarter of 2021 was broadly negative for Asia ex Japan equities, with India being a notable exception. 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. During the quarter, China was the worst performer due to ongoing regulatory concerns and China Evergrande Group-related fears. Consumption within China 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:

From a country perspective, China and Vietnam were the top contributors to relative performance during the third quarter. Portfolio holding Tiangong International, a Chinese specialty steel manufacturer, was the top performer during the period. Earlier in the year we took market sell-off opportunities during COVID resurgence to increase investments in Vietnam and many of these stocks performed well in the third quarter as well. On the other hand, our underweight to India detracted the most during the period, as Indian equities have strongly outperformed their Asian peers within the benchmark.

From a sector perspective, stock selection in the consumer discretionary and industrials sectors contributed the most to the Fund’s relative outperformance. A few portfolio holdings in these sectors enjoyed positive demand and pricing for their products and services, as a result of global economic recovery and supply chain tightness. On the other hand, stock selection in communication services detracted from relative performance, as our holdings in XD, Inc., a Chinese online gaming company, and Tencent Holdings, a leading internet platform in China, suffered weak sector sentiment from regulatory uncertainties.

Notable Portfolio Changes:

During the quarter, we made several changes to our China exposure. We exited our holdings in two Chinese property management companies, namely KWG Living Group and Powerlong Commercial Management, to minimize the potential contagion risk in the real estate sector. On the other hand, we initiated several positions in Chinese consumer and healthcare businesses where we see more favorable risk-reward profile after the recent market sell-off. Among the new names are Zhou Hei Ya International, a snack food business in China, and AK Medical Holdings, a medical device maker.

Outside of China, we also initiated several new positions. Some of those include CTOS Digital BHD, a credit bureau business in Malaysia, KakaoBank Corp., an internet banking business in South Korea, and Brighten Opix, a Taiwanese specialty contact lens manufacturer. We view each of those businesses as having a clear competitive advantage, highly cash-generative business model, and good alignment of interest by the controlling shareholder, which bodes well for positive dividend growth outlook.

To fund these new positions, we exited several holdings in industrial, financials, consumer discretionary, and communications sectors, including those with expensive valuation multiples and slowing growth profiles.

Outlook:

The structural consumption growth trend in Asia faces a temporary slowdown in 2021 in our view, 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. Looking ahead, we remain 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, Asia ex Japan equities, as represented by the MSCI All Country Asia ex Japan Index, still trade at a reasonable valuation level of 14.0x 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.

 

 

Rolling 12 Month Returns For the period ended 30/09/2021 - I (Acc)
Name 2021 2020 2019 2018 2017 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
24.49% 31.32% 1.79% 11.01% 19.06% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
14.73% 18.16% -3.15% 1.74% 23.02%
Matthews Asia ex Japan Dividend Fund (GBP)
18.77% 26.07% 7.82% 13.95% 15.25% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
10.00% 12.63% 2.49% 4.67% 19.11%
Matthews Asia ex Japan Dividend Fund (EUR)
25.93% N.A. N.A. N.A. N.A. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
16.08% 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. 

Index Definitions