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 04/10/2023)



(as of 04/10/2023)


1 Day NAV Change

(as of 04/10/2023)


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


The Fund has sustainable investment as its objective within the meaning of Article 9 of SFDR. In managing the 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 $5.87 million (31/08/2023)
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 31/08/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Sustainable Future Fund (USD)
-6.32% 5.36% 6.02% 5.04% n.a. n.a. n.a. 1.98% 21/07/2022
MSCI All Country Asia ex Japan Index (USD)
-6.39% 2.21% 2.59% -0.24% n.a. n.a. n.a. -0.50%
Matthews Asia Sustainable Future Fund (GBP)
-5.04% 2.67% 0.52% -3.71% n.a. n.a. n.a. -3.51% 21/07/2022
MSCI All Country Asia ex Japan Index (GBP)
-4.95% -0.03% -2.61% -8.39% n.a. n.a. n.a. -5.61%
As of 30/06/2023
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.

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 31/08/2023)
Fund Benchmark
Number of Positions 45 1,227
Weighted Average Market Cap $25.4 billion $109.9 billion
Active Share 95.5 n.a.
P/E using FY1 estimates 18.5x 13.4x
P/E using FY2 estimates 15.0x 11.6x
Price/Cash Flow 12.2 6.8
Price/Book 2.6 1.4
Return On Equity 9.2 15.1
EPS Growth (3 Yr) 35.2% 18.2%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 31/08/2023)
Name Sector Country % Net Assets
Shriram Finance, Ltd. Financials India 7.5
Full Truck Alliance Co., Ltd. Industrials China/Hong Kong 6.9
Bandhan Bank, Ltd. Financials India 6.7
Legend Biotech Corp. Health Care China/Hong Kong 6.4
Meituan Consumer Discretionary China/Hong Kong 5.2
Hong Kong Exchanges & Clearing, Ltd. Financials China/Hong Kong 4.9
Samsung SDI Co., Ltd., Pfd. Information Technology South Korea 4.6
JD Health International, Inc. Consumer Staples China/Hong Kong 4.5
Micron Technology, Inc. Information Technology United States 3.9
Contemporary Amperex Technology Co., Ltd. Industrials China/Hong Kong 3.2
TOTAL 53.8

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 31/08/2023)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 25.2 23.7 1.5
Industrials 19.8 7.3 12.5
Financials 19.7 20.7 -1.0
Health Care 11.0 3.9 7.1
Consumer Discretionary 9.2 15.1 -5.9
Real Estate 5.1 3.3 1.8
Consumer Staples 5.0 5.1 -0.1
Communication Services 4.8 9.7 -4.9
Materials 0.0 5.2 -5.2
Energy 0.0 3.7 -3.7
Utilities 0.0 2.4 -2.4
Cash and Other Assets, Less Liabilities 0.2 0.0 0.2

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

Country Fund Benchmark Difference
China/Hong Kong 49.5 40.6 8.9
India 21.6 17.1 4.5
Taiwan 11.0 17.2 -6.2
South Korea 10.2 14.1 -3.9
United States 3.9 0.0 3.9
Vietnam 2.2 0.0 2.2
Bangladesh 1.1 0.0 1.1
Indonesia 0.3 2.3 -2.0
Singapore 0.0 3.8 -3.8
Thailand 0.0 2.3 -2.3
Malaysia 0.0 1.6 -1.6
Philippines 0.0 0.7 -0.7
Macau 0.0 0.3 -0.3
Cash and Other Assets, Less Liabilities 0.2 0.0 0.2

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 25.4 59.1 -33.7
Large Cap ($10B-$25B) 15.5 19.8 -4.3
Mid Cap ($3B-$10B) 39.0 19.1 19.9
Small Cap (under $3B) 19.9 2.0 17.9
Cash and Other Assets, Less Liabilities 0.2 0.0 0.2

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 30/06/2023)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 96% Benchmark Coverage: 98%
0.0 0.4 -0.4
Fund Coverage: 96% Benchmark Coverage: 100%
0.0 0.4 -0.4
Fund Coverage: 96% Benchmark Coverage: 100%
0.0 1.1 -1.1
Fund Coverage: 96% Benchmark Coverage: 100%
0.0 0.5 -0.5
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100% Benchmark Coverage: 100%
0.0 0.7 -0.7
Board Diversity
Fund Coverage: 100% Benchmark Coverage: 98%
18.4 17.2 1.2

Board Diversity: Represents the weighted average ratio of female 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.
Alcohol: Represents companies that generate revenue from alcohol manufacturing or production.
Gambling: Represents companies that generate more than 50% of revenue from gambling.

Source: Sustainalytics, Factset, MSCI, Matthews Asia.

GHG Intensity

(as of 30/06/2023)

Fund Coverage: 100%; Benchmark Coverage: 98% as of 30/06/2023

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, 2021). Carbon intensity represents the issuer’s total carbon emissions per EUR million of revenue (tCO2e divided by EUR million in revenue).

Source: Sourced from ISS ESG. Where not covered by external data providers, we have tried to source these data points.

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

Inbok  Song photo
Inbok Song



Period ended 30 June 2023

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

Market Environment:

There were two key developments during the first six months of the year. Firstly, the market has been surprised by the persistence of higher inflation and, as a result, peak interest rate expectations in the western world have been steadily revised up. Secondly, there was the market’s excitement about the potential of artificial intelligence (AI), with the release of very successful, large language and stable diffusion models and blowout quarterly results and guidance from NVIDIA, a key player in the space, which together triggered a reassessment of the growth prospects of large tech companies. This led to a very top-heavy performance of equity markets, in the U.S. in particular.

During the period, the relative attractiveness of Asian markets with low inflation came to the fore, such as South Korea and Taiwan. Some currencies in the region also did well against the U.S. dollar, including the Indonesian rupiah and the Philippine peso, while the Malaysian ringgit and the Chinese renminbi were among the biggest depreciators against the greenback.

Taiwan, South Korea and Indonesia were the best-performing markets in the region in the first half, according to the Fund’s benchmark, the MSCI All Country Asia ex Japan Index, while Malaysia, Thailand and China were the worst performers. From a sector perspective, IT, energy and communication services were the best performers while utilities, real estate and health care were the weakest.

Performance Contributors and Detractors: 

From a country perspective, stock selection in South Korea and India were the biggest contributors to the Fund’s relative performance in the first half. On the other hand, an overweight and stock selection in China was the biggest detractor amid negative sentiment over the country’s uneven recovery and geopolitical tensions with the U.S.

From a sector perspective, stock selection in financials was the biggest contributor, followed by stock selections in real estate and health care. In contrast, our mild overweight and stock selection in consumer staples and underweight and selection in communication services were the biggest detractors.

From a stock perspective, Ecopro BM, a South-Korea-based manufacturer of high-nickel cathode materials for renewable batteries, was the biggest contributor to relative and absolute performance in the first half as the company benefited from strong order growth from key customers, particularly in the U.S.

Shriram Finance, an India-based auto and consumer finance services provider, was also a strong contributor as the outlook for both loan growth and margins for non-banking financial companies continued to improve with the bulk of interest rate-hikes likely behind us.

On the flip side, our Chinese or China-exposed holdings such as Full Truck Alliance, a Chinese freight marketplace operator, and JD Health, a leading Chinese online pharmacy company, detracted as the market worried about the slow pace of the Chinese economic recovery. We remain positive about the long-term prospects of these companies and our base case remains a steady, not spectacular, recovery of China’s economy over the coming quarters.

Notable Portfolio Changes: 

In the second quarter, we didn’t initiate any new holdings. We exited our position in Taiwan Semiconductor Manufacturing Co. (TSMC) as we found more attractive opportunities elsewhere in the Taiwan technology supply chain.


The U.S. Fed’s interest rate-strategy and the market’s expectation of its evolution have been the most important variables impacting the performance of markets over the last few quarters. With the Fed seemingly coming close to the end of its rate-hiking cycle, the focus will now shift to assessing the cumulate impact of all the hikes on economic growth prospects over the coming quarters.

Like during the first half, our focus in the second half of 2023 will be on assessing how China’s economic recovery and growth prospects play out and how they might affect the dynamics of other Asian markets. Russia’s invasion of Ukraine and its effect on energy prices—alongside OPEC’s (Organization of the Petroleum Exporting Countries) persistent efforts to keep prices high—will also need ongoing, careful monitoring although to a lesser extent than in 2022.

Over the coming years, we expect the gross domestic product (GDP) growth-differential between Asian emerging markets and developed markets to improve. This development, alongside relatively attractive valuations, should potentially lend support to better equity performance against developed markets compared with the last decade.

Finally, since our inception in July 2022, we have viewed sustainability investing as a synonym for long-term investing. Our approach focuses on investing in companies that are well-positioned to embrace global, multidecadal trends, including addressing critical challenges like climate change and inclusive development. These companies also often tend to be good in identifying and proactively addressing long-terms risk to their businesses. Asian markets, we believe, are key destination for sustainable investment themes that offer attractive opportunities for alpha generation.

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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