Matthews Asia Sustainable Future Fund

  • Unconstrained strategy focused on companies that make a positive environmental, social and eco­nomic impact in Asia ex Japan
  • All-cap portfolio with diversified emerging and frontier market exposures
  • Deep bottom-up fundamental approach that seeks to generate attractive long-term risk-adjusted returns by investing in well-governed companies


Inception Date


YTD Return (USD)

(as of 28/03/2023)



(as of 28/03/2023)


1 Day NAV Change

(as of 28/03/2023)


The Fund seeks to achieve long-term capital appreciation while investing in companies that contribute to a sustainable future.


The Sub-Fund has sustainable investment as its objective within the meaning of Article 9 of SFDR. In managing the Sub-Fund, the Investment Manager will apply its ESG investment guidelines further described in “General Information Relating To Sustainability” in the main part of the Prospectus.


The Fund seeks to achieve its investment objective by investing, directly or indirectly, primarily (i.e., at least 65% of its net assets) in equities of companies located in, or with substantial ties to, the Asia ex Japan region that the Investment Manager believes contribute positively to one or more of its sustainability focus areas. On an ancillary basis, the Fund may invest in other permitted assets on a worldwide basis. For the purpose of this policy, the Asia ex Japan region consists of all countries and markets in Asia excluding Japan, but including all other developed, emerging and frontier countries and markets in Asia. The Fund seeks to invest primarily in companies that the Investment Manager believes, based on its analysis, meet the following environmental, social and governance ("ESG") standards: (1) they do not cause significant environmental or social harm; (2) they have good governance practices; and (3) they contribute to a sustainable future. In evaluating whether a company meets these ESG standards, the Investment Manager focuses on a company's contribution or potential future contribution to positive ESG outcomes based on a variety of criteria, which may include some or all of the following: climate change mitigation and adaptation, clean environment, circular economy, or sustainable production and consumption; health and well-being, human capital development, inclusive development or enablement of sustainable development; and/or good governance practices that demonstrate a strong commitment to integration of ESG principles.

Fund Facts
Inception Date 21/07/2022
Fund Assets $5.54 million (28/02/2023)
Base Currency USD
ISIN: LU2459556697 (USD) LU2459556770 (GBP)
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region
SFDR Classification Article 9
Fees & Expenses
Management Fee 0.75%


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. The Investment Manager's consideration of ESG factors in making its investment decisions materially impact the investment performance of the Fund. These and other risks associated with investing in the Fund can be found in the Prospectus.

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


  • Monthly
  • Quarterly
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As of 28/02/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Sustainable Future Fund (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI All Country Asia ex Japan Index (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Matthews Asia Sustainable Future Fund (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI All Country Asia ex Japan Index (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
As of 31/12/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Sustainable Future Fund (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI All Country Asia ex Japan Index (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Matthews Asia Sustainable Future Fund (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI All Country Asia ex Japan Index (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.

The Fund has commenced operations from 21 July 2022 and performance will not be shown until the fund has reached one year since inception.

Portfolio Characteristics

(as of 28/02/2023)
Fund Benchmark
Number of Positions 47 1,185
Weighted Average Market Cap $23.3 billion $106.5 billion
Active Share 95.4 n.a.
P/E using FY1 estimates 20.9x 12.8x
P/E using FY2 estimates 17.1x 11.7x
Price/Cash Flow 11.5 6.8
Price/Book 2.7 1.5
Return On Equity 4.7 15.6
EPS Growth (3 Yr) 22.2% 16.5%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 28/02/2023)
Name Sector Country % Net Assets
Full Truck Alliance Co., Ltd. Industrials China/Hong Kong 6.6
Bandhan Bank, Ltd. Financials India 5.5
Samsung SDI Co., Ltd., Pfd. Information Technology South Korea 5.1
Hong Kong Exchanges & Clearing, Ltd. Financials China/Hong Kong 4.9
Legend Biotech Corp. Health Care United States 4.9
Ecopro BM Co., Ltd. Industrials South Korea 4.3
JD Health International, Inc. Consumer Discretionary China/Hong Kong 4.3
Meituan Consumer Discretionary China/Hong Kong 3.9
Shriram Finance, Ltd. Financials India 3.9
Micron Technology, Inc. Information Technology United States 3.4
TOTAL 46.8

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 28/02/2023)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Industrials 24.8 6.6 18.2
Information Technology 20.9 22.8 -1.9
Financials 15.0 21.1 -6.1
Consumer Discretionary 12.5 14.5 -2.0
Health Care 11.6 3.9 7.7
Real Estate 4.2 3.9 0.3
Communication Services 2.7 10.3 -7.6
Consumer Staples 0.1 5.3 -5.2
Materials 0.0 5.5 -5.5
Energy 0.0 3.5 -3.5
Utilities 0.0 2.6 -2.6
Cash and Other Assets, Less Liabilities 8.3 0.0 8.3

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

Country Fund Benchmark Difference
China/Hong Kong 42.0 43.8 -1.8
India 15.1 14.9 0.2
South Korea 12.8 13.3 -0.5
Taiwan 9.8 17.0 -7.2
United States 8.7 0.0 8.7
Vietnam 1.6 0.0 1.6
Bangladesh 1.2 0.0 1.2
Indonesia 0.5 2.2 -1.7
Singapore 0.0 3.9 -3.9
Thailand 0.0 2.3 -2.3
Malaysia 0.0 1.7 -1.7
Philippines 0.0 0.8 -0.8
Cash and Other Assets, Less Liabilities 8.3 0.0 8.3

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 23.1 57.3 -34.2
Large Cap ($10B-$25B) 12.9 21.5 -8.6
Mid Cap ($3B-$10B) 35.3 19.7 15.6
Small Cap (under $3B) 20.5 1.6 18.9
Cash and Other Assets, Less Liabilities 8.3 0.0 8.3

Source: FactSet Research Systems unless otherwise noted.
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.

ESG Characteristics

(as of 31/12/2022)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 95.9% Benchmark Coverage: 96.5%
0.0 0.3 -0.3
Fund Coverage: 95.9% Benchmark Coverage: 99.8%
0.0 0.4 -0.4
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100.0% Benchmark Coverage: 100.0%
0.0 0.7 -0.7
Board Diversity
Fund Coverage: 100.0% Benchmark Coverage: 99.1%
25.6 20.4 5.2

Board Diversity: Represents the weighted average ratio of female board members to male board members in investee companies.
Tobacco: Represents companies that generate revenue from tobacco manufacturing or production or that generate more than 50% of revenue from tobacco retail.
UN Global Compact Violators: Represents companies that have been assessed as failing to comply with the 10 United Nations Global Compact Principles by ISS-ESG Norms-Based Research. Different ESG research providers may come to different conclusions on the severity of the violation.

Source: Sustainalytics, Factset, MSCI, Matthews Asia.

GHG Intensity

(as of 31/12/2022)

Fund Coverage: 91.14; Benchmark Coverage: 98 as of 31/12/2022

GHG Intensity: Represents the normalized portfolio’s total weighted average (scope 1 + scope 2) carbon emissions intensity, using the most recently available data (emissions data from 2020). Carbon intensity represents the issuer’s total carbon emissions per EUR million of revenue (tCO2e divided by EUR million in revenue).

Source: Sustainalytics, MSCI, Matthews Asia.

Sustainability-related Disclosures

This Fund Yes No
Complies with Article 9 of SFDR  
Investment process integrates ESG factors and sustainability risks based on proprietary and third-party research  
Applies norms- and activity-based exclusions  
Promotes environmental and social characteristics  
Has a sustainable investment objective  
Conducts engagement  
Exercises Voting Rights  

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 Fund’s investment objective and risk factors.

For more information, please refer to our Responsible Investment and Stewardship Policy and our Sustainable Finance Disclosure Regulation – Article 10.

Portfolio Managers

Vivek  Tanneeru photo
Vivek Tanneeru

Lead Manager


Period ended 31 December 2022

The Matthews Asia Sustainable Future Fund was launched on 21 July 2022.

Market Environment:

In 2022, the U.S. and many other parts of the developed world saw high rates of inflation that they hadn’t experienced since the 1980s. The U.S. Federal Reserve increased the Fed funds rate seven times last year after guiding for a transitory inflation for much of 2021. This led to strong U.S. dollar performance that peaked around the end of the third quarter.

Inflation was less of a challenge in key emerging markets like China, partly because of suppressed economic activity resulting from China’s zero COVID policy which was in place for much of 2022, and because where inflation was elevated, a number of central banks proactively addressed it by sharply increasing rates.

Nonetheless, Asia emerging market currencies were not completely immune to the impact of a very strong greenback. The Hong Kong dollar, Thai baht and Malaysian Ringgit were the least affected against the dollar last year while the Indian rupee, Taiwanese dollar and Philippine peso were the worst performers. For perspective, some major developed market currencies, such as the Japanese yen and British pound, fared worse than some Asia market currencies.

Since the Fund’s inception, Thailand was the best-performing Asia emerging market, followed by Malaysia and the Philippines. On the other hand, Taiwan, China/Hong and South Korea were the worst-performers. These poor performers turned in robust performances in the fourth quarter as they were aided by China’s lifting of its pandemic restrictions.

Performance Contributors and Detractors:

On a country basis, our stock selection in Taiwan was the biggest contributor to relative performance since the Fund’s inception. Our overweight to India and allocation to China/Hong Kong were the next biggest contributors to relative performance though this was mitigated by our stock selection in India and China/Hong Kong which detracted from performance.

From a sector perspective, stock selection in consumer discretionary was the biggest contributor to relative performance. Our underweight and stock selection in information technology was a large contributor and our overweight and stock selection in real estate was also a positive. On the flip side, our stock selection in industrials and financials were the biggest detractor from relative performance.

At the stock level, as China’s zero-COVID policy was lifted toward the end of 2022 our Chinese portfolio holdings in general and holdings in JD Health and Full Truck Alliance in particular rebounded strongly and contributed positively to relative performance. JD Health, an internet health-care platform, was the top performer as it benefited from a surge in demand for health-care products and services during the latest wave of COVID and also on expectations of favorable regulatory changes. Full Truck Alliance, an online freight platform, gained as a result of China reopening expectations and rebound in economic activity that would be beneficial to its revenue growth and also on expectations of movement restrictions that constrained trucking industry being lifted. Our Indian holdings also benefited from the normalization of economic activity in the country. Phoenix Mills, a retail mall operator, and Lemon Tree Hotels were among top contributors amid stronger pricing and/or higher sales in these consumer segments compared with pre-pandemic levels. Conversely, electric vehicle (EV) supply-chain names underperformed toward the end of 2022 on worries about developed world economic growth potentially softening in 2023 at a time when the EV industry is rapidly increasing production capacity. South Korean EV component company Solus Advanced Materials, which has manufacturing operations in Europe, detracted from performance amid concerns about its cost competitiveness given a significant increase in energy prices in Europe. We retain a positive view on the long-term demand trends for the EV industry and the competitiveness of Asian battery cell makers within it.

Notable Portfolio Changes:

We did not initiate any new positions during the fourth quarter of 2022.


The Fed’s interest rate strategy and the market’s expectation of its evolution continue to be the most important variables impacting the near-term regional, sector and currency performance in emerging markets. We expect the impact of Fed’s actions in 2023 to be less than it was in 2022 as the tightening cycle enters late stages. In addition, we are also wary of the cumulative impact of the Fed’s interest rate hikes on U.S. and developed world economic activity.

Our other key focus in 2022 was the evolution of China’s zero-COVID policy and its impact on economic activity in the country. This has largely been resolved given the unexpected lifting of most COVID restrictions in China in late 2022. Elsewhere, Russia’s invasion of Ukraine and its effect on energy prices— alongside OPEC’s efforts to keep the prices high—needs careful watching, especially as Chinese economic activity is likely to pick up as 2023 progresses.

Over the coming years, we expect the emerging markets gross domestic product (GDP) growth-differential with developed markets to improve from a 23-year low reached in 2022. This development, alongside relatively attractive valuations, should potentially lend support to better equity performance against developed markets compared with the last decade.

Companies that address critical challenges, such as climate change and inclusive development, will continue to thrive, in our view. And for investors interested in sustainability themes, including reducing carbon emissions, alleviating poverty and creating greater financial inclusion in the developing world, Asia emerging markets are a key investment destination. To tackle sustainable themes globally, we believe we need to include the world’s most populous economies, many of which lie in Asia.  As the post-COVID global economic recovery matures and markets contend with macro headwinds and volatility, we believe there are attractive opportunities for alpha generation throughout our large, diverse, sustainable investment universe.


Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg

To find documents in additional languages, please visit the Fund Literature page in our Resources section.


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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