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 29/02/2024)



(as of 29/02/2024)


1 Day NAV Change

(as of 29/02/2024)


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 $3.35 million (31/01/2024)
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
  • Calendar Year
  • Rolling 12 Month
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As of 31/01/2024
Annualized Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China A-Share Fund (USD)
-10.98% -11.80% -10.98% -33.23% n.a. n.a. n.a. -23.40% 21/07/2022
MSCI China A Onshore index (USD)
-10.14% -10.22% -10.14% -27.93% n.a. n.a. n.a. -20.44%
Matthews China A-Share Fund (GBP)
-10.84% -15.54% -10.84% -35.23% n.a. n.a. n.a. -26.45% 21/07/2022
MSCI China A Onshore index (GBP)
-10.05% -14.45% -10.05% -30.33% n.a. n.a. n.a. -23.68%
As of 31/12/2023
Annualized Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China A-Share Fund (USD)
-2.35% -6.27% -18.00% -18.00% n.a. n.a. n.a. -18.26% 21/07/2022
MSCI China A Onshore index (USD)
-1.25% -3.08% -11.46% -11.46% n.a. n.a. n.a. -15.45%
Matthews China A-Share Fund (GBP)
-2.91% -9.66% -22.28% -22.28% n.a. n.a. n.a. -21.77% 21/07/2022
MSCI China A Onshore index (GBP)
-1.93% -7.21% -16.45% -16.45% n.a. n.a. n.a. -19.15%
For the years ended December 31st
Name 2023 2022 2021 2020 2019
Matthews China A-Share Fund (USD)
-18.00% n.a. n.a. n.a. n.a.
MSCI China A Onshore index (USD)
-11.46% n.a. n.a. n.a. n.a.
Matthews China A-Share Fund (GBP)
-22.28% n.a. n.a. n.a. n.a.
MSCI China A Onshore index (GBP)
-16.45% n.a. n.a. n.a. n.a.
For the period ended 31/12/2023
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China A-Share Fund (USD)
-18.00% n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore index (USD)
-11.46% n.a. n.a. n.a. n.a.
Matthews China A-Share Fund (GBP)
-22.28% n.a. n.a. n.a. n.a. 21/07/2022
MSCI China A Onshore index (GBP)
-16.45% n.a. n.a. n.a. n.a.

Source: Brown Brothers Harriman (Luxembourg) S.C.A.

All returns over 1 year are annualized

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.

Portfolio Characteristics

(as of 31/01/2024)
Fund Benchmark
Number of Positions 38 761
Weighted Average Market Cap $41.9 billion $36.9 billion
Active Share 99.8 n.a.
P/E using FY1 estimates 16.4x 12.0x
P/E using FY2 estimates 13.6x 10.5x
Price/Cash Flow 11.7 5.5
Price/Book 2.8 1.4
Return On Equity 19.6 15.0
EPS Growth (3 Yr) 23.4% 25.7%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 31/01/2024)
Name Sector % Net Assets
Kweichow Moutai Co., Ltd. Consumer Staples 5.3
Midea Group Co., Ltd. Consumer Discretionary 4.2
Shenzhen Inovance Technology Co., Ltd. Industrials 3.7
Focus Media Information Technology Co., Ltd. Communication Services 3.5
Himile Mechanical Science and Technology (Shandong) Co., Ltd. Industrials 3.4
Will Semiconductor Co., Ltd. Shanghai Information Technology 3.3
Jason Furniture Hangzhou Co., Ltd. Consumer Discretionary 3.2
Shanghai Jinjiang International Hotels Co., Ltd. Consumer Discretionary 3.1
Inner Mongolia Yili Industrial Group Co., Ltd. Consumer Staples 2.6
Jiangsu Hengli Hydraulic Co., Ltd. Industrials 2.5
TOTAL 34.8

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 31/01/2024)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Industrials 25.3 16.0 9.3
Consumer Discretionary 17.1 7.6 9.5
Consumer Staples 12.6 11.5 1.1
Information Technology 11.5 16.5 -5.0
Materials 4.8 10.8 -6.0
Financials 4.4 19.3 -14.9
Communication Services 3.5 2.4 1.1
Health Care 2.3 8.4 -6.1
Utilities 0.0 3.1 -3.1
Energy 0.0 2.9 -2.9
Real Estate 0.0 1.4 -1.4
Cash and Other Assets, Less Liabilities 18.4 0.0 18.4

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) 32.1 31.7 0.4
Large Cap ($10B-$25B) 22.1 24.5 -2.4
Mid Cap ($3B-$10B) 13.2 30.7 -17.5
Small Cap (under $3B) 14.2 13.1 1.1
Cash and Other Assets, Less Liabilities 18.4 0.0 18.4
China Exposure Portfolio Weight
Mainland China Listed Companies 81.6
Cash and Other Assets, Less Liabilities 18.4

Mainland China listed companies includes A Share and B Shares. 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. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. ADRs are American Depositary Receipts and GDRs are Global Depositary Receipts. Hong Kong Listed Companies include SAR (Hong Kong) companies, China-affiliated corporations, and H Shares. SAR 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. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. Other represents Chinese companies listed in other countries or non-China companies with a majority of revenue coming from China such as Japan, Singapore, Taiwan and the United States or other non-China companies.

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 31/12/2023)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 98% Benchmark Coverage: 96%
0.0 0.2 -0.2
Fund Coverage: 98% Benchmark Coverage: 96%
0.0 0.0 0.0
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100% Benchmark Coverage: 94%
0.0 0.2 -0.2
Board Diversity
Fund Coverage: 100% Benchmark Coverage: 98%
20.6 19.8 0.8

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.
Controversial weapons include companies with involvement in the following: anti-personnel mines; biological and chemical weapons; cluster weapons; depleted uranium; nuclear weapons and white phosphorus. A company is excluded if it is directly involved in the production, selling and/or distribution of (parts of) controversial weapons and this involvement concerns the core weapon system, or components/services of the core weapon system that are tailor-made and essential for the lethal use of the weapon.

Source: Sustainalytics, Factset, MSCI, Matthews Asia.

GHG Intensity

(as of 31/12/2023)

Fund Coverage: 100%; Benchmark Coverage: 93% as of 31/12/2023

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 ESG-Related Investment Policy of Matthews Asia Funds.

Portfolio Managers

Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Lead Manager

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Lead Manager


Period ended 31 December 2023

For the year ending 31 December 2023, the Matthews China A-Share Fund returned -18.00%, while its benchmark, the MSCI China A Onshore Index returned -11.46%. For the fourth quarter of the year, the Fund returned -6.27% versus -3.08% for the benchmark.

Market Environment  

2023 was a disappointing year for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post--COVID lockdowns but also due to the lack of any significant stimulus measures by the government. Although the government did start to gradually loosen property purchase-restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound. 

The challenging real estate market and the soft consumption environment have combined to create a potential formula for deflation, in our view. From what we can see, many entrepreneurs—whose animal spirits were curbed during the COVID period—are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francsico in November didn’t really impact the ongoing concerns of the market. And staying at the macro level, Chinese equites were a key exception in a November global equities rally that followed signals by U.S. Federal Reserve Chairman Jay Powell that the U.S. interest rate-upcycle was near an end.

Performance Contributors and Detractors  

Stock selection in mega cap and mid-cap stocks detracted from total and relative returns in 2023 as these holdings were hurt by the weakness of China’s economic recovery. 

At the sector level, stock selection in consumer discretionary and materials, and an underweight and stock selection in financials were the biggest detractors to relative returns in the period. On the flip side, stock selection in industrials was the top contributor. The portfolio’s cash position also helped cushion some downside during the year. 

At the holdings level, Shanghai Jin Jiang International Hotels, a hotel chain operator, was among the biggest detractors to total and relative returns in 2023 amid market concern that the rebound in domestic tourism was short lived. While its room rate and occupancy level could decline in the near future, we believe there is still room for the company’s European operations to improve and that there is opportunity for its profitability and dividend to recover. China Tourism Group Duty Free Corp., a duty free store operator, was also one of the biggest detractors. The company is being challenged in its market as Chinese tourists increasingly have more choices other than Hainan island where the company generates the majority of its revenue. Chongqing Brewery was another detractor. Wusu, the company’s main growth brand in the last few years, seems to be losing steam while western brands licensed under its parent Carlsberg haven’t yet gained a strong momentum. 

On the other hand, Will Semiconductor, an image sensor maker, was the biggest contributor to total returns as the company benefited from a rebound in smart phone demand. Zhejiang Sanhua Intelligent Controls and Leader Harmonious Drive Systems also gained from strong investor sentiment toward the market for humanoid robots as both companies have products that potentially could be applied in the area.

Notable Portfolio Changes  

We initiated a position in Fuyao Glass Industry Group, a leading automotive glass manufacturer, in the last quarter of the year. We believe the company is well positioned as new electric vehicles (EVs) continue to include more glass content compared with traditional vehicles. In addition, we added a position in Naura Technology Group, a semiconductor equipment maker, because it is likely to benefit from a continued investment push into chip manufacturing in China. 

In contrast, we sold our position in China Vanke, a real estate developer, given the significant difficulties that these firms face in trying to sell new residential properties and monetize other commercial real estate assets, such as shopping malls or warehouses, in such an uncertain environment. We also exited Shanghai International Airport as we see difficulties in outbound tourism quickly recovering to pre-COVID levels. 


We remain cautious on Chinese equities. Both domestic and international investors have had their confidence severely tested over the last three years. Unlike many other equities markets, there is no “natural” inflow into China’s market through pensions or retirement savings plans. That’s left only selected groups of companies with strong cash flow and balance sheets being active in the market and buying back their own shares. 

Among the traditional drivers of Chinese economic growth, aside from real estate, the export sector is still demonstrating some strength. However, as China grows its share of global industrial output, it raises the specter of more trade frictions alongside continuing U.S. tariffs. In terms of consumption, the third economic driver, Chinese consumers are likely to continue to behave very conservatively due to a lackluster employment market and bleak outlook for income growth. Industries with high paying jobs have unfortunately become casualties of tightened regulation and some have been subject to pay-cut directives from the government. 

Chinese policymakers, in our view, have not yet realized the real threat of deflation to the economy. Although we don’t fully subscribe to the theory of a “Japanification” of China, we believe the government needs to do a lot more to avoid this trap and the risk of a “lost decade.” 

Rolling 12 Month Returns For the period ended 31/12/2023 - I (Acc)
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China A-Share Fund (USD)
-18.00% N.A. N.A. N.A. N.A. 21/07/2022
MSCI China A Onshore index (USD)
-11.46% N.A. N.A. N.A. N.A.
Matthews China A-Share Fund (GBP)
-22.28% N.A. N.A. N.A. N.A. 21/07/2022
MSCI China A Onshore index (GBP)
-16.45% N.A. N.A. N.A. N.A.

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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