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 04/10/2023)



(as of 04/10/2023)


1 Day NAV Change

(as of 04/10/2023)


Seeks to achieve long term capital appreciation.


The Fund promotes environmental and social characteristics according to Article 8 of SFDR. Furthermore, the Fund uses both activity- and norm-based exclusions. Information relating to the environmental and social characteristics of this 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 $4.12 million (31/08/2023)
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
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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 China A-Share Fund (USD)
-6.93% -0.97% -10.10% -14.15% n.a. n.a. n.a. -16.43% 21/07/2022
MSCI China A Onshore index (USD)
-8.05% -3.36% -6.95% -12.74% n.a. n.a. n.a. -15.94%
Matthews China A-Share Fund (GBP)
-5.64% -3.39% -14.63% -21.35% n.a. n.a. n.a. -20.94% 21/07/2022
MSCI China A Onshore index (GBP)
-6.63% -5.47% -11.67% -19.87% n.a. n.a. n.a. -20.26%
As of 30/06/2023
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.

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 40 836
Weighted Average Market Cap $48.6 billion $39.8 billion
Active Share 99.7 n.a.
P/E using FY1 estimates 19.2x 13.2x
P/E using FY2 estimates 15.8x 11.3x
Price/Cash Flow 13.7 6.4
Price/Book 3.2 1.7
Return On Equity 18.9 15.4
EPS Growth (3 Yr) 23.3% 27.2%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 31/08/2023)
Name Sector % Net Assets
Kweichow Moutai Co., Ltd. Consumer Staples 6.2
Focus Media Information Technology Co., Ltd. Communication Services 3.8
Shenzhen Inovance Technology Co., Ltd. Industrials 3.6
Himile Mechanical Science and Technology (Shandong) Co., Ltd. Industrials 3.5
Midea Group Co., Ltd. Consumer Discretionary 3.3
Jason Furniture Hangzhou Co., Ltd. Consumer Discretionary 3.1
China Jushi Co., Ltd. Materials 3.1
WuXi AppTec Co., Ltd. Health Care 3.1
Shanghai Jinjiang International Hotels Co., Ltd. Consumer Discretionary 3.0
Will Semiconductor Co., Ltd. Shanghai Information Technology 2.8
TOTAL 35.5

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 31/08/2023)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Industrials 28.9 16.5 12.4
Consumer Discretionary 14.5 7.2 7.3
Consumer Staples 13.2 11.9 1.3
Information Technology 12.1 18.0 -5.9
Materials 6.3 12.1 -5.8
Financials 4.1 17.3 -13.2
Health Care 4.1 8.3 -4.2
Communication Services 3.8 2.3 1.5
Real Estate 2.5 1.8 0.7
Utilities 0.0 2.5 -2.5
Energy 0.0 2.1 -2.1
Cash and Other Assets, Less Liabilities 10.4 0.0 10.4

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) 31.1 32.8 -1.7
Large Cap ($10B-$25B) 25.7 24.4 1.3
Mid Cap ($3B-$10B) 23.2 32.3 -9.1
Small Cap (under $3B) 9.5 10.6 -1.1
Cash and Other Assets, Less Liabilities 10.4 0.0 10.4
China Exposure Portfolio Weight
A Shares 84.5
B Shares 5.0
Cash and Other Assets, Less Liabilities 10.4

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 30/06/2023)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 97% Benchmark Coverage: 92%
0.0 0.2 -0.2
Fund Coverage: 97% Benchmark Coverage: 93%
0.0 0.0 0.0
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100% Benchmark Coverage: 100%
0.0 0.2 -0.2
Board Diversity
Fund Coverage: 100% Benchmark Coverage: 98%
18.6 18.5 0.1

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.

Source: Sustainalytics, Factset, MSCI, Matthews Asia.

GHG Intensity

(as of 30/06/2023)

Fund Coverage: 100%; Benchmark Coverage: 93% 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 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

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Lead Manager


Period ended 30 June 2023

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

Market Environment:

Chinese equities performed sluggishly in the first half of the year after the post-zero-COVID reopening rally fizzled out in February as consumption data in the period disappointed the market. During the second-quarter holiday festivals of Qing Ming in April, May Day and Duan Wu in June, there was surging demand for travel, and tourist numbers and hotel room rates recovered back to pre-COVID levels. However, spending during the periods remained below pre-COVID levels indicating that Chinese consumers lacked the confidence to spend.

The real estate market is also creating worries as new home sales shrank during the first six months of the year. This has generated calls for the government to further relax the cooling measures it put in place toward the end of the sector’s almost 20-year-long boom. Chinese equities rallied a number of times in the first half on speculation the government was considering certain stimulus policies. However, we think there is limited room to ease monetary policy as the U.S. economy continues to defy the risk of recession. China’s central bank cannot cut interest rates too aggressively as that could create further depreciation pressure on an already weakened Chinese renminbi. A cheap renminbi is good for China’s exports but not for encouraging inward capital flows.  

In addition to China’s uneven recovery, the impact of geopolitical tensions was also present, as the U.S. further tightened restrictions on exports to China of key semiconductor manufacturing equipment and materials.

Performance Contributors and Detractors:

At the sector level, stock selection in industrials was the biggest contributor to relative performance in the period, followed by stock selection in health care. On the other hand, our overweight and stock selections in consumer discretionary and real estate were the biggest detractors. We are revaluating our positions and allocation in the latter sector.

At the holdings level, Himile Mechanical Science & Technology was the top contributor to relative performance over the period. The company didn’t just report strong earnings with its traditional tire-mold business, it also started to meaningfully sell its computer numerical control (CNC) machine tool to external customers.

Beijing Kingsoft Office Software, an office application-software company, was the second-biggest contributor amid market expectations that integration of AI technology with its office application software will speed up its conversion to a cloud-based business model.

In contrast, China Tourism Group, a leading duty-free licensed operator, was the biggest detractor during the period amid an underwhelming consumer recovery in the country. Competition is also increasing in the company’s sector and Chinese consumers are spending less on discretionary items such as cosmetics. We are evaluating the situation carefully.

China Vanke, a property developer, was the second-biggest detractor amid ongoing uncertainty over the prospects China’s residential property market. Chongqing Changan Automobile, a passenger-car manufacturer, was also a large detractor. The industry is facing unusually high inventory due to the upgrade of emission standards this year and there’s concern that manufacturers such as Changan might have to cut prices significantly to move sales.

Notable Portfolio Changes:

During the second quarter, we added BYD, China’s top-selling auto and electric vehicle (EV) maker, as its A-shares look attractive compared with both its historical valuation and the valuation of its Hong Kong-listed shares.  

During the period, we sold Anhui Jinhe Industrial, an artificial sweetener manufacturer, over concerns that price declines in the artificial sweetener market might not be short term as consumer preferences change.


While we share some near-term concern over the Chinese economy with many observers, such as unemployment of young people and private enterprises’ low appetite for expansion, we continue to believe the elements of the country’s economic success are still in place. And the current market valuation of Chinese equities is not reflecting an economic revival—many Chinese consumer company shares, for example, have plunged back to last October’s levels. We continue to believe therefore that holding high-quality Chinese companies has the potential to offer very attractive rewards for investors over the long term.

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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