Matthews China Fund

  • High-conviction equity portfolio seeks companies benefiting from China’s domestic consumption
  • All-cap fundamental GARP approach driven by on-the-ground, proprietary research
  • Combines long-term core holdings with more opportunistic ideas to provide consistency through cycles


Inception Date


YTD Return (USD)

(as of 30/05/2023)



(as of 30/05/2023)


1 Day NAV Change

(as of 30/05/2023)


Seeks 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, at least 65% of its total net assets, in equities of companies located in China, and may invest the remainder of its net assets 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 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. 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. 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.

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

Fund Facts
Inception Date 26/02/2010
Fund Assets $88.56 million (30/04/2023)
Base Currency USD
ISIN: LU0491817440 (USD) LU0594556135 (GBP)
Benchmark MSCI China Index
Geographic Focus China and Taiwan: China includes its administrative and other districts, such as Hong Kong.
SFDR Classification Article 8
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2022 1.00% ( USD ) 1.00% ( GBP )


  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
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As of 30/04/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-7.77% -18.25% -7.56% -5.64% -3.60% -2.18% 4.10% 3.58% 26/02/2010
MSCI China Index (USD)
-5.16% -11.16% -0.69% -5.64% -6.15% -4.88% 2.91% 2.88%
Matthews China Fund (GBP)
-8.51% -19.33% -10.79% -4.99% -3.50% -0.28% 6.39% 5.08% 28/02/2011
MSCI China Index (GBP)
-6.70% -12.98% -4.96% -5.75% -6.04% -3.12% 5.13% 4.53%
As of 31/03/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
0.76% 0.23% 0.23% -6.05% 1.99% -0.46% 4.94% 4.25% 26/02/2010
MSCI China Index (USD)
4.52% 4.71% 4.71% -4.57% -2.51% -3.87% 3.57% 3.32%
Matthews China Fund (GBP)
-1.43% -2.49% -2.49% -0.30% 1.94% 2.14% 7.09% 5.89% 28/02/2011
MSCI China Index (GBP)
2.34% 1.87% 1.87% 1.62% -2.41% -1.41% 5.72% 5.17%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Matthews China Fund (USD)
-23.62% -13.32% 43.38% 33.92% -19.89% 57.70% -3.95% -0.45% -2.95% 6.75%
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26% 3.96%
Matthews China Fund (GBP)
-14.45% -12.17% 38.50% 29.88% -15.40% 43.82% 15.48% 4.66% 3.00% 4.49%
MSCI China Index (GBP)
-11.95% -20.92% 25.66% 18.88% -13.70% 40.97% 20.60% -2.27% 15.00% 2.03%
For the period ended 31/03/2023
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Fund (USD)
-6.05% -29.94% 61.17% -2.29% -5.73% 26/02/2010
MSCI China Index (USD)
-4.57% -32.47% 43.81% -5.66% -6.08%
Matthews China Fund (GBP)
-0.30% -26.51% 44.59% 3.51% 1.39% 28/02/2011
MSCI China Index (GBP)
1.62% -29.24% 29.24% -0.86% 1.11%

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

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 30/04/2023)
Fund Benchmark
Number of Positions 51 715
Weighted Average Market Cap $92.7 billion $118.9 billion
Active Share 67.2 n.a.
P/E using FY1 estimates 12.4x 10.3x
P/E using FY2 estimates 11.1x 9.2x
Price/Cash Flow 8.9 6.1
Price/Book 1.7 1.4
Return On Equity 12.8 11.8
EPS Growth (3 Yr) 2.7% 2.7%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 30/04/2023)
Upside Capture
Downside Capture
Sharpe Ratio
Information Ratio
Tracking Error

Fund Risk Metrics are reflective of Class I USD ACC shares.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 30/04/2023)
Name Sector % Net Assets
Alibaba Group Holding, Ltd. Consumer Discretionary 7.4
Tencent Holdings, Ltd. Communication Services 6.6
Meituan Consumer Discretionary 5.3
PDD Holdings, Inc. Consumer Discretionary 4.7
China Merchants Bank Co., Ltd. Financials 4.4, Inc. Consumer Discretionary 4.3
China International Capital Corp., Ltd. Financials 4.0
KE Holdings, Inc. Real Estate 3.1
Contemporary Amperex Technology Co., Ltd. Industrials 2.9
CITIC Securities Co., Ltd. Financials 2.8
TOTAL 45.5

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 30/04/2023)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 31.2 27.0 4.2
Financials 19.7 16.9 2.8
Communication Services 12.0 19.2 -7.2
Industrials 8.4 5.8 2.6
Information Technology 6.5 5.9 0.6
Real Estate 6.1 3.4 2.7
Consumer Staples 5.9 6.2 -0.3
Health Care 5.4 6.2 -0.8
Energy 1.6 3.2 -1.6
Utilities 1.5 2.6 -1.1
Materials 0.7 3.6 -2.9
Cash and Other Assets, Less Liabilities 0.9 0.0 0.9

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) 62.2 64.0 -1.8
Large Cap ($10B-$25B) 24.1 19.4 4.7
Mid Cap ($3B-$10B) 8.9 15.1 -6.2
Small Cap (under $3B) 3.8 1.6 2.2
Cash and Other Assets, Less Liabilities 0.9 0.0 0.9
China Exposure Portfolio Weight
SAR (Hong Kong) 38.7
A Shares 31.2
H Shares 17.5
Overseas Listed Companies (OL) 10.0
Unassigned 1.8
Cash and Other Assets, Less Liabilities 0.9

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 31/03/2023)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 100% Benchmark Coverage: 98%
0.0 0.0 0.0
Fund Coverage: 100% Benchmark Coverage: 99%
0.0 0.0 0.0
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100% Benchmark Coverage: 100%
0.0 0.1 -0.1
Board Diversity
Fund Coverage: 100% Benchmark Coverage: 99%
17.5 17.1 0.4

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 31/03/2023)

Fund Coverage: 100%; Benchmark Coverage: 98% as of 31/03/2023

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.


  • 3 YEAR
  • 5 YEAR
  • 10 YEAR

Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.

Overall Morningstar RatingTM is reflective of the noted share class. Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Copyright ©2023 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is provided for reference purposes only.

The Overall Morningstar®️ Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings.

Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

Portfolio Managers

Andrew  Mattock, CFA photo
Andrew Mattock, CFA

Lead Manager

Winnie  Chwang photo
Winnie Chwang


Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA



Period ended 31 March 2023

For the quarter ending 31 March 2023, the Matthews China Fund returned 0.23%, while its benchmark, the MSCI China Index, returned 4.71%.

Market Environment:

Chinese equities grinded higher, albeit with considerable volatility, even after posting some of the strongest results within global markets in the final quarter of 2022. The country’s lifting of its long-standing COVID restrictions allowed for a ‘more normal’ Lunar New Year celebration helping to boost consumption indicators, especially those focused on domestic tourism, local services and entertainment. However, spy balloons, bilateral tensions and a spike in U.S. interest rates spurred profit taking in Chinese equities in February which relinquished almost the entire year-to-date gains. In March, cross-strait tensions seemed to fade and the Chinese government showed strong support for gaming and internet sectors along with announcing state-owned enterprise (SOE) reforms and additional fiscal stimulus which, combined, improved local sentiment causing A-share small-cap equities and large Hong Kong-based platform companies to bounce higher.

In the first quarter, large-cap platform companies within the information technology and communication services sectors lead the MSCI China Index higher while health care and real estate—especially smaller caps—lagged. 

Performance Contributors and Detractors: 

The portfolio’s overweight and stock selection within information technology and an underweight and stock selection within consumer staples contributed to relative performance. On the other hand, the portfolio’s allocation and stock selection within communication services detracted from performance. An overweight and stock selection within the consumer discretionary sector also detracted as some of the holdings announced weaker-than-expected numbers in their most recent earnings and hindered performance.

Among individual securities, KE Holdings—China’s leading online real estate platform—was a top contributor to both absolute and relative performance. The company has been benefiting from expectations of recovering real estate sales in China as the country’s reopening unfolds. KE Holdings is also continuing to benefit from existing home sales (which are more secular in nature driven by household formation and upgrading trends) rather than new home sales (which could be more speculative in nature). We continue to see this holding as one that would benefit from increased real estate trends this year.

On the other hand,—China’s leading e-commerce platform company known for its authentic products as well as fast and efficient product delivery—was among the weakest performers. The company announced weaker-than-expected numbers in its most recent earnings and provided a conservative outlook for the first half of the year.’s announcement of additional investments it may make in order to fend off e-commerce competition in the country also caused market worries. However, we continue to find the company’s value proposition compelling in China’s e-commerce industry. has built a moat around product quality and logistics network, which are hard to replicate and may continue to benefit the company as the business moves into other areas, such as online pharmaceutical distribution.

Notable Portfolio Changes:

During the first quarter, we took the opportunity to consolidate the portfolio from 64 names at the end of December 2022, to 52 at the end of March 2023. We consolidated many small A-share names that were under 50 basis points (0.50%) in position, including Anjoy Food Group, Beijing Huafeng Test and Control Technology, Cambricon Technologies and Gigadevice Semiconductor. Many of these A-share positions continue to be relatively more expensive and operate in a landscape where competition continues to be rather intense.

We also added a few holdings including Ping An—the leading financial conglomerate in China with businesses in life insurance and banking—and Zhejiang Supcon Technology, an industrial automation leader, managing large scale factory automation projects. Ping An’s aggressive cost cutting during the pandemic resulted in a much healthier cost base. We believe China’s reopening will help with the company’s business operations and activity as life agents are able to regain mobility and sell to clients.  Zhejiang Supcon has been steadily gaining both domestic and international market share and is actively growing from selling hardware to also selling software to help digitize the next generation of factories.


China’s reopening continues to be bumpy with some sectors such as consumer discretionary and communication services (advertising) recovering ahead of others. We continue to monitor China’s property market developments as this is key in ensuring growth stability within the country. So far, a gradual, slightly better-than-expected property sector recovery has been seen on the ground. Industrial sector recovery has been weighed down by underperformance in the renewables sectors (EV/solar/wind) so far. We feel that investor sentiment has been overly bearish on concerns about slowing demand and oversupply. This continues to be a secular opportunity for growth and is key in China’s carbon neutrality transition. Platform companies in China continue to experience market sentiment volatility given varying geopolitical reactions. However, valuations are cheap, and any signs of warmer sentiment benefits a recovery in the stock prices of these platform companies more meaningfully.

Rolling 12 Month Returns For the period ended 31/03/2023 - I (Acc)
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Fund (USD)
-6.05% -29.94% 61.17% -2.29% -5.73% 26/02/2010
MSCI China Index (USD)
-4.57% -32.47% 43.81% -5.66% -6.08%
Matthews China Fund (GBP)
-0.30% -26.51% 44.59% 3.51% 1.39% 28/02/2011
MSCI China Index (GBP)
1.62% -29.24% 29.24% -0.86% 1.11%

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. 

Index Definitions