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 10/08/2022)



(as of 10/08/2022)


1 Day NAV Change

(as of 10/08/2022)


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 $96.20 million (31/07/2022)
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 31/07/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-10.71% 3.38% -22.65% -31.23% 2.05% 3.41% 6.17% 4.57% 26/02/2010
MSCI China Index (USD)
-9.44% -2.29% -19.58% -28.23% -3.52% -1.42% 4.50% 3.35%
Matthews China Fund (GBP)
-11.00% 6.81% -14.20% -21.05% 2.11% 4.99% 8.91% 6.51% 28/02/2011
MSCI China Index (GBP)
-9.62% 0.81% -10.49% -18.00% -3.32% 0.17% 7.17% 5.46%
As of 30/06/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
12.91% 6.32% -13.37% -29.29% 5.81% 7.52% 7.14% 5.57% 26/02/2010
MSCI China Index (USD)
6.63% 3.50% -11.19% -31.70% -0.44% 2.29% 5.69% 4.20%
Matthews China Fund (GBP)
17.33% 15.22% -3.59% -19.07% 7.47% 9.00% 9.89% 7.66% 28/02/2011
MSCI China Index (GBP)
10.66% 12.21% -0.95% -22.30% 1.13% 3.67% 8.43% 6.44%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews China Fund (USD)
-13.32% 43.38% 33.92% -19.89% 57.70% -3.95% -0.45% -2.95% 6.75% 11.90%
MSCI China Index (USD)
-21.64% 29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26% 3.96% 23.10%
Matthews China Fund (GBP)
-12.17% 38.50% 29.88% -15.40% 43.82% 15.48% 4.66% 3.00% 4.49% 7.16%
MSCI China Index (GBP)
-20.92% 25.66% 18.88% -13.70% 40.97% 20.60% -2.27% 15.00% 2.03% 17.69%
For the period ended 30/06/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-29.29% 37.40% 21.92% -2.89% 24.89% 26/02/2010
MSCI China Index (USD)
-31.70% 27.54% 13.28% -6.55% 21.42%
Matthews China Fund (GBP)
-19.07% 21.61% 26.13% 0.54% 23.25% 28/02/2011
MSCI China Index (GBP)
-22.30% 14.08% 16.68% -3.06% 19.46%

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 31/07/2022)
Fund Benchmark
Number of Positions 65 715
Weighted Average Market Cap $74.6 billion $112.7 billion
Active Share 75.4 n.a.
P/E using FY1 estimates 13.7x 10.0x
P/E using FY2 estimates 12.0x 8.9x
Price/Cash Flow 13.2 5.8
Price/Book 2.3 1.4
Return On Equity 11.9 11.6
EPS Growth (3 Yr) -4.1% 6.0%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 30/06/2022)
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 31/07/2022)
Name Sector % Net Assets
Alibaba Group Holding, Ltd. Consumer Discretionary 7.4
Meituan Consumer Discretionary 6.4
Pinduoduo, Inc. Consumer Discretionary 5.5, Inc. Consumer Discretionary 5.1
Tencent Holdings, Ltd. Communication Services 3.8
China Merchants Bank Co., Ltd. Financials 3.7
China International Capital Corp., Ltd. Financials 3.7
CITIC Securities Co., Ltd. Financials 2.9
Shenzhen Inovance Technology Co., Ltd. Industrials 2.5
Estun Automation Co., Ltd. Industrials 2.3
TOTAL 43.3

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 31/07/2022)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 32.8 30.0 2.8
Information Technology 15.4 6.0 9.4
Financials 13.6 15.3 -1.7
Industrials 12.8 6.0 6.8
Communication Services 7.4 17.9 -10.5
Health Care 5.3 6.3 -1.0
Real Estate 4.8 3.4 1.4
Consumer Staples 4.0 6.0 -2.0
Materials 3.7 3.6 0.1
Utilities 0.0 2.8 -2.8
Energy 0.0 2.5 -2.5
Cash and Other Assets, Less Liabilities 0.1 0.0 0.1

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) 53.2 64.0 -10.8
Large Cap ($10B-$25B) 26.7 20.1 6.6
Mid Cap ($3B-$10B) 16.6 14.3 2.3
Small Cap (under $3B) 3.4 1.6 1.8
Cash and Other Assets, Less Liabilities 0.1 0.0 0.1
China Exposure Portfolio Weight
A Shares 50.3
SAR (Hong Kong) 29.4
Overseas Listed Companies (OL) 10.7
H Shares 9.4
Cash and Other Assets, Less Liabilities 0.1

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.


  • 3 YEAR
  • 5 YEAR
  • 10 YEAR
(as of 28/07/2022)

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 ©2021 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 30 June 2022

For the first half of 2022, the Matthews China Fund returned -13.37%, while its benchmark, the MSCI China Index, returned -11.19% over the same period. For the quarter ending June 30, 2022, the Fund returned 6.32%, while the benchmark returned 3.50%.

Market Environment:

The first half of the year was negative and choppy for Chinese markets led down by the confluence of COVID-19 case spikes resulting in policy-enforced lockdowns in tier one cities, ADR delisting pricing pressures and investor worries that Russia-like sanctions could be implemented upon select Chinese companies. However, Chinese equities rebounded in the second quarter of the year following three consecutive negative quarters amid less restrictive regulatory pressure on Chinese platforms and internet giants, accommodative monetary and fiscal policy combined with positive changes to COVID lock-down protocols.

Quarantine restrictions for in-bound foreign visitors were reduced and late quarter weakness in imported commodity prices could support China’s current account while reducing inflationary pressures. Although the government’s announced 2022 GDP growth-rate target of “around 5.5%” may not be fully achieved, we believe the government will largely succeed in supporting its economy and that corporate earnings will remain some of the highest globally in 2022-23.

Performance Contributors and Detractors:

From a sector perspective, stock selection and allocation within consumer discretionary, real estate and consumer staples contributed to relative performance during the first half of the year. Among the portfolio’s consumer discretionary holdings, Pinduoduo, China’s largest agriculture-focused technology platform that connects farmers and distributors with consumers directly through its interactive shopping experience, contributed the most to the Fund’s absolute and relative performance. In light of the regulatory impact seen in the second half of 2021, more internet platform companies in China have begun to adapt to new regulations, including trying to set a path to profitability. We see more encouraging signs of monetization efforts and this, coupled with attractive valuations can potentially help the stocks to continue to recover.

On the other hand, the portfolio’s overweight in information technology and stock selection in industrials and financials sectors detracted from relative performance. Sungrow Power Supply Co., a solar component manufacturer, detracted from performance. The A-Shares market experienced a sharp correction in growth sectors including that of the renewable sector given a general risk off appetite, coupled with COVID concerns. We continue to believe that the solar industry will continue to be a secular opportunity. Most recently, the industry is seeing strong demand from Europe given escalating energy prices in the region. Valuations for Sungrow have also corrected down to more reasonable levels and thus we remain comfortable in holding this stock in the portfolio.

Notable Portfolio Changes:

During the second quarter, we increased our exposure to the real estate sector given overall policy improvements in the sector, including progress on re-financing roadblocks and lower mortgage rates. We believe that these eased measures will start to drive contracted sales growth when COVID lockdown restrictions are eased. Property developers and management companies still trade at attractive valuations and there remains an opportunity for market consolidation for the larger and better run players. We also reduced some exposure from holdings in communication services sector, including Tencent. Tencent continues to be one of China’s most dominant internet platforms and gaming remains the largest part of its exposure. However, with a broad-base revenue moderation in gaming, coupled with weaker outlook on its advertising business, we have trimmed from this exposure to fund other opportunities.


The A-Shares market has recovered meaningfully since the end of April lows. It is uncertain if second quarter results (which will be weak given it will bake in the worst of the COVID lockdowns) might derail this recovery.  However, we are cautiously optimistic that in the second half of this year, the conditions in China will continue to improve.

Large scale lockdowns seem a lot less probable as the government continues to become more pragmatic. Further, the party will likely do what they can to improve economic conditions ahead of the party meeting at the end of the year which may make it more likely that monetary and fiscal stimulus will be unleashed in the second half. Sentiment towards growth globally remains tepid but we believe the significantly lower valuations might warrant a re-interest in this category as well.

Rolling 12 Month Returns For the period ended 30/06/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-29.29% 37.40% 21.92% -2.89% 24.89% 26/02/2010
MSCI China Index (USD)
-31.70% 27.54% 13.28% -6.55% 21.42%
Matthews China Fund (GBP)
-19.07% 21.61% 26.13% 0.54% 23.25% 28/02/2011
MSCI China Index (GBP)
-22.30% 14.08% 16.68% -3.06% 19.46%

Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg


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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