Matthews China A-Share Fund

  • High-conviction, long-only equity portfolio focused on companies benefiting from China’s economic evolution
  • All-cap fundamental GARP approach driven by on-the-ground, proprietary research
  • Focus on “new economy” sectors such as information technology, health care and consumer discretionary


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 Sub-Fund’s investment objective is to achieve long-term capital appreciation.


The Sub-Fund promotes environmental and social characteristics according to Article 8 of SFDR. Furthermore, the Sub-Fund uses both activity- and norm-based exclusions. Information relating to the environmental and social characteristics of this Sub-Fund is available in 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 listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange and traded and denominated in the currency of China, the renminbi ("China A Shares"). On an ancillary basis, the Fund may invest in other permitted assets on a worldwide basis. For the purpose of this policy, China includes the People's Republic of China, its administrative and other districts, such as Hong Kong, as well as Taiwan. The Fund may invest (whether directly or indirectly) in China A Shares, either directly via a Qualified Foreign Investor (“QFI”) license awarded to the Company, or via the Shanghai-Hong Kong Stock Connect and/or Shenzhen-Hong Kong Stock Connect programs, or indirectly via investment in access products.

Fund Facts
Inception Date 21/07/2022
Fund Assets $4.74 million (28/02/2023)
Base Currency USD
ISIN: LU2459556184 (USD) LU2459556267 (GBP)
Benchmark MSCI China A Onshore index
Geographic Focus China - China includes its administrative and other districts, such as Hong Kong
SFDR Classification Article 8
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 currency, 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. Investments in a single-country fund may be subject to a higher degree of market risk than diversified funds because of concentration in a specific country.

Investing in Chinese securities involve risks. Heightened risks related to the regulatory environment and the potential actions by the Chinese government could negatively impact performance. China listed companies and trading of China A Shares are subject to market rules and disclosure requirements in the China stock market. Any changes in laws, regulations, rules and policies of the China A Share market may affect share prices. There are foreign shareholding restrictions and disclosure obligations applicable to China A Shares. The Fund will be subject to restrictions on trading (including restriction on retention of proceeds) in China A Shares as a result of its interest in the China A Shares. Part of the assets of the Fund may be invested in China A Shares through the use of a Qualified Foreign Investor (“QFI”) license. There are rules and restrictions under current QFI regulations including rules on remittance of principal, investment restrictions, and repatriation of principal and profits. The Fund may invest in China A Shares trading on the Shanghai Stock Exchange and Shenzhen Stock Exchange via Stock Connect which is subject to a daily quota. If the daily quota is exceeded, buy orders will be rejected. Additional risks applicable to using Stock Connect include, but are not limited to, legal/beneficial ownership risk, clearing and settlement and custody risk, suspension risk, differences in trading days, operational risk, regulatory risk, Nominee Arrangements in Holding China A Shares, investor compensation, and taxation risks.

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


  • Monthly
  • Quarterly
  • data_graph_selected Created with Sketch.
As of 28/02/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China A-Share Fund (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore index (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Matthews China A-Share Fund (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore 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 China A-Share Fund (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore index (USD)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a.
Matthews China A-Share Fund (GBP)
n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore 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 43 812
Weighted Average Market Cap $48.1 billion $40.9 billion
Active Share 99.6 n.a.
P/E using FY1 estimates 20.9x 14.8x
P/E using FY2 estimates 16.9x 12.8x
Price/Cash Flow 14.4 7.4
Price/Book 3.1 2.0
Return On Equity 20.2 16.8
EPS Growth (3 Yr) 20.8% 19.8%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 28/02/2023)
Name Sector % Net Assets
Kweichow Moutai Co., Ltd. Consumer Staples 5.5
Shenzhen Inovance Technology Co., Ltd. Industrials 3.5
China Merchants Bank Co., Ltd. Financials 3.3
Shanghai Jinjiang International Hotels Co., Ltd. Consumer Discretionary 3.3
Shenzhen Mindray Bio-Medical Electronics Co., Ltd. Health Care 3.2
Jiangsu Hengrui Pharmaceuticals Co., Ltd. Health Care 3.0
China Jushi Co., Ltd. Materials 3.0
Focus Media Information Technology Co., Ltd. Communication Services 3.0
China Vanke Co., Ltd. Real Estate 2.9
Midea Group Co., Ltd. Consumer Discretionary 2.8
TOTAL 33.5

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 28/02/2023)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Industrials 28.3 16.6 11.7
Consumer Discretionary 14.9 7.5 7.4
Information Technology 13.6 16.6 -3.0
Consumer Staples 11.8 12.8 -1.0
Materials 8.7 13.5 -4.8
Health Care 8.3 9.0 -0.7
Financials 5.0 16.3 -11.3
Communication Services 3.0 1.7 1.3
Real Estate 2.9 1.7 1.2
Utilities 0.0 2.3 -2.3
Energy 0.0 2.1 -2.1
Cash and Other Assets, Less Liabilities 3.5 0.0 3.5

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 42.2 36.4 5.8
Large Cap ($10B-$25B) 19.5 23.7 -4.2
Mid Cap ($3B-$10B) 25.8 33.1 -7.3
Small Cap (under $3B) 8.9 6.8 2.1
Cash and Other Assets, Less Liabilities 3.5 0.0 3.5
China Exposure Portfolio Weight
A Shares 88.5
B Shares 8.0
Cash and Other Assets, Less Liabilities 3.5

Definitions: SAR (Hong Kong) companies are companies that conduct business in Hong Kong and/or mainland China. China-affiliated corporations [CAC], also known as "Red Chips," are mainland China companies with partial state ownership listed in Hong Kong, and incorporated in Hong Kong. China A Shares are Mainland Chinese companies incorporated in China and listed on the Shanghai or Shenzhen exchanges, available mostly to local Chinese investors and qualified institutional investors. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. Overseas Listed [OL] companies are companies that conduct business in mainland China but listed in overseas markets such as Japan, Singapore, Taiwan and the United States.

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: 91.0% Benchmark Coverage: 90.0%
0.0 0.2 -0.2
Fund Coverage: 95.4% Benchmark Coverage: 93.7%
0.0 0.0 0.0
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100.0% Benchmark Coverage: 100.0%
0.0 0.2 -0.2
Board Diversity
Fund Coverage: 100.0% Benchmark Coverage: 98.3%
28.8 27.0 1.8

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: 88.43; Benchmark Coverage: 92.43 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 8 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

Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Lead Manager


Period ended 31 December 2022

The Matthews China A-Share Fund was launched on 21 July 2022.

Market Environment:

2022 will certainly be remembered as a year of volatility. Global equity markets reacted negatively to a series of events, including the Russian invasion of Ukraine, the spike in energy costs, aggressive rate rises by the U.S. Federal Reserve and other central banks, the lockdown in Shanghai, tensions over Taiwan, and the Chinese Communist Party’s selection of a new leadership team for the next five years.

In November, Chinese equities markets hit their lowest point of the year. However, in that same month, China relaxed many of its COVID quarantine policies, signaling a change in policy direction in managing the virus, and Chinese equities reacted favorably. Then, in early December, the government announced the scrapping of its zero-COVID policy and the removal of quarantine requirements for international visitors. Meanwhile, the U.S. Public Company Accounting Oversight Board (PCAOB) announced that it was able to fully inspect and investigate the audit workbooks of PCAOB-registered accounting firms working for Chinese companies listed on U.S. securities exchanges. This greatly reduced the risk of Chinese companies being forced to delist in the U.S. On the back of these positive developments, Chinese equities, especially those listed in the offshore market, began a strong rebound.

The recovery of China A-share prices has been notably less significant than for Hong Kong-listed shares and Chinese American Depositary Receipts (ADRs). This is understandable as during the past two-to-three years, the sell-off in the A-shares market has been much milder and many companies which will be direct beneficiaries of China’s reopening are not listed in the A-shares market.

Performance Contributors and Detractors:

At the sector level, stock selection in industrials was the top contributor to relative performance since the fund’s inception. Our stock selection in consumer discretionary was also a big contributor as was our relatively large cash position. In contrast, our underweight allocation to financials was the largest performance detractor.

At the holdings level, Shenzhen Inovance Technology, a leading industrial automation equipment company, was the largest contributor to relative performance after the company announced triple-digit profit growth in its second-quarter earnings. Jiangsu Hengli Hydraulic, a manufacturer of hydraulic components and systems, was the second-largest contributor as the firm reported 20% profit growth in its third-quarter earnings. Real estate developer China Vanke was the third-largest contributor, buoyed by market expectations that its relatively strong financial position and good reputation could help it lead an industry recovery.

On the flip side, OPT Machine Vision Tech, another industrial automation company, was the largest detractor to relative performance, as the company reported weak third-quarter results. Kweichow Moutai, a leading liquor producer, was the second-largest detractor, as zero-COVID hurt its end markets. Zhejiang HangKe Technology, a battery-equipment maker, was also a big detractor as changes to electronic vehicles (EV) tax credits under the Inflation Reduction Act in the U.S. and slowing sales of EVs in China created uncertainty for some customers.

Notable Portfolio Changes: 

In the last quarter, we added Shanghai M&G Stationery and Focus Media Information, two companies that we believe could benefit from China’s reopening. We also added Jason Furniture Hangzhou, which in our view could benefit from a strong construction completion cycle in 2023. During the period, we exited battery-equipment maker Zhejiang HangKe Technology, packaging materials manufacturer Yunnan Energy New Material, and electronic devices manufacturer GoerTek.


We are glad to see the Chinese government finally change course on its zero-COVID policy. The uncertain regulation of internet platforms, draconian cooling measures for the property market and zero-COVID have been the three main drags on the economy. But while policies are turning on all these areas there is still work to do. Many private entrepreneurs need to be incentivized to take risk and make investments and start hiring again while Chinese consumers who have stacked additional savings during the pandemic could also be helped with spending subsidies.

After the recent strong rally in Chinese equities, we believe the next phase of the rebound will be driven by strong fundamentals. During this phase, high-quality companies with strong earnings and cash flow and healthy balance sheets could start to outperform. These companies have always been our focus. With their low valuations and strong growth potential we believe our portfolio could deliver an attractive total risk-adjusted return for shareholders.

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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