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 20/02/2024)



(as of 20/02/2024)


1 Day NAV Change

(as of 20/02/2024)


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, 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 $34.56 million (31/01/2024)
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 31/01/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-11.18% -11.88% -11.18% -37.07% -24.06% -3.84% 1.32% 1.46% 26/02/2010
MSCI China Index (USD)
-10.61% -10.56% -10.61% -28.86% -23.15% -6.79% 0.60% 1.10%
Matthews China Fund (GBP)
-11.00% -15.57% -11.00% -38.97% -22.05% -3.20% 3.99% 2.54% 28/02/2011
MSCI China Index (GBP)
-10.52% -14.78% -10.52% -31.22% -21.19% -6.18% 3.20% 2.38%
As of 31/12/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-2.06% -6.13% -19.88% -19.88% -19.05% 0.37% 1.79% 2.34% 26/02/2010
MSCI China Index (USD)
-2.40% -4.21% -11.04% -11.04% -18.31% -2.65% 1.03% 1.93%
Matthews China Fund (GBP)
-2.57% -9.55% -24.16% -24.16% -17.09% 0.50% 4.50% 3.49% 28/02/2011
MSCI China Index (GBP)
-3.09% -8.29% -16.05% -16.05% -16.39% -2.67% 3.71% 3.29%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews China Fund (USD)
-19.88% -23.62% -13.32% 43.38% 33.92% -19.89% 57.70% -3.95% -0.45% -2.95%
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26%
Matthews China Fund (GBP)
-24.16% -14.45% -12.17% 38.50% 29.88% -15.40% 43.82% 15.48% 4.66% 3.00%
MSCI China Index (GBP)
-16.05% -11.95% -20.92% 25.66% 18.88% -13.70% 40.97% 20.60% -2.27% 15.00%
For the period ended 31/12/2023
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Fund (USD)
-19.88% -23.62% -13.32% 43.38% 33.92% 26/02/2010
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66%
Matthews China Fund (GBP)
-24.16% -14.45% -12.17% 38.50% 29.88% 28/02/2011
MSCI China Index (GBP)
-16.05% -11.95% -20.92% 25.66% 18.88%

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 31/01/2024)
Fund Benchmark
Number of Positions 52 765
Weighted Average Market Cap $90.3 billion $108.7 billion
Active Share 62.3 n.a.
P/E using FY1 estimates 10.2x 8.9x
P/E using FY2 estimates 9.0x 8.0x
Price/Cash Flow 6.9 4.8
Price/Book 1.3 1.1
Return On Equity 11.7 12.5
EPS Growth (3 Yr) 14.7% 12.7%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/12/2023)
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 31/01/2024)
Name Sector % Net Assets
Tencent Holdings, Ltd. Communication Services 9.0
Alibaba Group Holding, Ltd. Consumer Discretionary 8.2
China Merchants Bank Co., Ltd. Financials 5.3
PDD Holdings, Inc. Consumer Discretionary 4.6
Meituan Class B Consumer Discretionary 4.3
CITIC Securities Co., Ltd. Financials 3.7, Inc. Consumer Discretionary 3.6
KE Holdings, Inc. Real Estate 3.5
PetroChina Co., Ltd. Energy 3.1
China International Capital Corp., Ltd. Financials 3.0
TOTAL 48.3

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 31/01/2024)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 32.6 28.9 3.7
Financials 20.0 17.3 2.7
Communication Services 15.3 20.3 -5.0
Industrials 8.0 5.3 2.7
Consumer Staples 6.7 5.1 1.6
Real Estate 5.3 2.5 2.8
Information Technology 4.5 5.7 -1.2
Health Care 4.4 5.1 -0.7
Energy 3.1 3.8 -0.7
Utilities 0.7 2.7 -2.0
Materials 0.0 3.2 -3.2
Liabilities in Excess of Cash and Other Assets -0.5 0.0 -0.5

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) 63.1 62.6 0.5
Large Cap ($10B-$25B) 25.0 17.3 7.7
Mid Cap ($3B-$10B) 8.0 16.5 -8.5
Small Cap (under $3B) 4.3 3.6 0.7
Liabilities in Excess of Cash and Other Assets -0.5 0.0 -0.5
China Exposure Portfolio Weight
Hong Kong Listed Companies 56.7
Mainland China Listed Companies 28.0
ADR/GDR 14.6
Other 1.2
Liabilities in Excess of Cash and Other Assets -0.5

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: 99% Benchmark Coverage: 99%
0.0 0.0 0.0
Fund Coverage: 99% 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 0.0 0.0
Board Diversity
Fund Coverage: 100% Benchmark Coverage: 100%
20.2 19.8 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.
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: 99%; Benchmark Coverage: 99% 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.


  • 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 December 2023

For the year ending December 31, 2023, the Matthews China Fund returned -19.88%, while its benchmark, the MSCI China Index returned -11.04%. For the fourth quarter of the year, the Fund returned -6.13% versus -4.21% 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. While the government started to gradually loosen nearly all 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 have 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 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 curb the ongoing concerns of international investors.  

In terms of markets, quarterly results of leading Chinese companies, especially large-cap technology firms, seem to be hinting toward upward surprises in terms of topline revenue and earnings. During the last quarter of the year, information technology (IT) and utilities were the only positive sectors while real estate was weakest followed by consumer staples and communication services. Chinese small and mid caps ended lower but outperformed weak large and mega caps during the quarter.

Performance Contributors and Detractors 

From a sector perspective, our lack of exposure to materials and stock selection within IT and consumer staples contributed the most to relative performance in 2023. Among individual holdings, the top stock performer was Pinduoduo (PDD), one of China’s largest e-commerce platforms that started its businesses with a focus on lower-tier city, price sensitive consumers directly through its interactive shopping experience. PDD deliver strong results during the year in what has been a weaker e-commerce market in China. Gross merchandize value (GMV) growth and monetization for PDD has remained on track. PDD’s strong execution continues to make it a standout in its peer group. Tencent Music Entertainment Group, the largest music streaming service entity in China, was another outperformer. We think the market is coming to terms with the steady decline of its social entertainment business being offset by what is a growing willingness of consumers to pay for music streaming services. Music services in China have an opportunity to realize higher profitability than global peers such as Spotify, in our view, because the top labels in China account for a smaller share of music streaming traffic and therefore don’t have as much bargaining power in China as they do in the West.        

On the other hand, stock selection in real estate, consumer discretionary and financials detracted from performance for the year. Turning to individual holdings, property developer CIFI Holdings was among the biggest detractors to performance. CIFI’s stocks only resumed trading at the end of September after a long suspension and its negative share price performance had an accumulated impact over the time it was suspended. China’s largest food delivery service and internet platform company Meituan, a well held name in global portfolios, also detracted as a risk off appetite toward China led to a selloff. was the biggest detractor during the year. The e-commerce platform has generated concerns overs its growth prospects and has been weighed down by China’s muted recovery. While internet platform companies’ valuations have pulled back considerably, we believe they largely remain profitable and scale-oriented businesses. We continue to be overweight in consumer discretionary, led by an exposure in platform companies which we feel are very cheap and continue to deliver earnings improvement. 

Notable Portfolio Changes

We streamlined the number of positions in the portfolio from 64 to 51 over the course of the year.  Our overall exposure in mainland-listed companies has been reduced from around 39% in Dec. 2022 to 27% at the end of the year. Many smaller A-shares positions that were more expensive were exited from the portfolio as cheaper valuations, given the pull back, enabled us to build more into better quality holdings. In the more recent quarters, we have incrementally added to our positions in certain communication services names such as Tencent Music and social platform company Kuaishou Technology (driven by low valuations as well as increased willingness among consumers to spend and pay for online services). We’ve also added to consumer names such as Yum China and Tsingtao Brewery (driven by the pull back of these names leading to attractive valuations for what are still renowned brands in China). 


2023 has been generally a challenging year for China. Despite the lifting of COVID restrictions in the country, the government’s lack of stimulus generally led to weakening economic support for the rest of the year. At the same time, property market woes continued for a prolonged period, impacting sentiment and business confidence in the country. While more supportive measures have been rolled later in the year to address property market concerns, a meaningful inflection remains to be seen. 

Looking ahead, we are cautiously looking for a stabilization of the deterioration in property markets. While we do not expect a significant warming of geo-relations, the ongoing current status quo of a more construction post-APEC posturing would be welcomed by the market. Valuations continued to trend down in 2023, and the broader China market hovers around similar levels as 2009 despite better quality businesses and earnings profile. We continue to believe that patience is needed in these market environments and that it will ultimately pay off once the market turns. We intend to stick to our knitting and aim to deliver consistent growth-at-a reasonable price strategy for our clients. 

Rolling 12 Month Returns For the period ended 31/12/2023 - I (Acc)
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Fund (USD)
-19.88% -23.62% -13.32% 43.38% 33.92% 26/02/2010
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66%
Matthews China Fund (GBP)
-24.16% -14.45% -12.17% 38.50% 29.88% 28/02/2011
MSCI China Index (GBP)
-16.05% -11.95% -20.92% 25.66% 18.88%

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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