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 05/12/2022)



(as of 05/12/2022)


1 Day NAV Change

(as of 05/12/2022)


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 $62.96 million (31/10/2022)
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 31/10/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-13.34% -26.92% -43.47% -48.27% -8.39% -4.48% 2.10% 1.92% 26/02/2010
MSCI China Index (USD)
-16.81% -28.75% -42.70% -47.82% -13.73% -9.55% 0.13% 0.55%
Matthews China Fund (GBP)
-16.83% -22.82% -33.78% -38.02% -4.71% -1.77% 5.60% 4.03% 28/02/2011
MSCI China Index (GBP)
-19.34% -24.69% -32.59% -37.87% -10.31% -6.93% 3.55% 2.81%
As of 30/09/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-13.54% -24.71% -34.77% -38.28% -2.17% -0.60% 3.93% 3.10% 26/02/2010
MSCI China Index (USD)
-14.54% -22.44% -31.12% -35.29% -7.06% -5.42% 2.56% 2.04%
Matthews China Fund (GBP)
-9.02% -17.41% -20.38% -24.86% 1.44% 3.30% 8.00% 5.73% 28/02/2011
MSCI China Index (GBP)
-10.92% -15.62% -16.42% -21.84% -3.94% -1.88% 6.42% 4.75%
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 30/09/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-38.28% 6.92% 41.87% 2.62% 0.99% 26/02/2010
MSCI China Index (USD)
-35.29% -7.24% 33.76% -3.77% -2.05%
Matthews China Fund (GBP)
-24.86% 2.01% 36.18% 8.69% 3.70% 28/02/2011
MSCI China Index (GBP)
-21.84% -11.06% 27.50% 1.83% 0.77%

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 31/10/2022)
Fund Benchmark
Number of Positions 62 721
Weighted Average Market Cap $55.5 billion $77.3 billion
Active Share 76.7 n.a.
P/E using FY1 estimates 11.4x 7.8x
P/E using FY2 estimates 10.3x 7.5x
Price/Cash Flow 9.0 4.3
Price/Book 1.6 1.1
Return On Equity 12.6 12.0
EPS Growth (3 Yr) -9.7% 5.0%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2022)
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 31/10/2022)
Name Sector % Net Assets
Pinduoduo, Inc. Consumer Discretionary 8.0
Alibaba Group Holding, Ltd. Consumer Discretionary 7.0
Meituan Consumer Discretionary 6.0, Inc. Consumer Discretionary 4.8
China Merchants Bank Co., Ltd. Financials 4.4
China International Capital Corp., Ltd. Financials 4.2
CITIC Securities Co., Ltd. Financials 3.0
Shenzhen Inovance Technology Co., Ltd. Industrials 2.6
Sungrow Power Supply Co., Ltd. Industrials 2.6
Shanghai Baosight Software Co., Ltd. Information Technology 2.5
TOTAL 45.1

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 31/10/2022)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 33.2 29.0 4.2
Financials 15.5 16.7 -1.2
Information Technology 15.4 6.4 9.0
Industrials 13.0 6.4 6.6
Health Care 5.6 6.7 -1.1
Communication Services 5.1 15.9 -10.8
Consumer Staples 4.6 6.0 -1.4
Real Estate 4.4 3.2 1.2
Materials 3.7 3.9 -0.2
Energy 0.0 3.1 -3.1
Utilities 0.0 2.7 -2.7
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) 53.2 55.8 -2.6
Large Cap ($10B-$25B) 22.0 22.8 -0.8
Mid Cap ($3B-$10B) 22.3 16.9 5.4
Small Cap (under $3B) 3.0 4.5 -1.5
Liabilities in Excess of Cash and Other Assets -0.5 0.0 -0.5
China Exposure Portfolio Weight
A Shares 51.9
SAR (Hong Kong) 26.0
Overseas Listed Companies (OL) 12.4
H Shares 10.1
Liabilities in Excess of Cash and Other Assets -0.5

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 ©2022 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 September 2022

For the quarter ending 30 September 2022, the Matthews China Fund returned -24.71%, while its benchmark, the MSCI China Index returned -22.44%.

Market Environment:

Chinese equities were extremely weak in the third quarter as a confluence of negative headlines including worries about a spillover of China’s real estate woes into its broader economy, lingering COVID restrictions and geopolitical tensions weighed on its economy. China’s property market sentiment has been hit hard and continued to struggle as potential buyers and local government cast doubts on whether some financially distressed developers can finish and deliver their pre-sold homes on time. COVID-related worries reappeared as cases jumped in the mega city of Chengdu, with a population of over 20 million, spurring a city-wide multi-day lockdown and mass testing—a protocol which has been discouraged since May of this year. In addition, in late July, a group of four companies were added to the SEC’s listed of potential de-listings from U.S. exchanges, and news that U.S. House Speaker Nancy Pelosi may visit Taiwan added to investor nervousness.

The People’s Bank of China (PBOC) announced a series of monetary and fiscal support measures during the quarter, including another cut to its 1-year policy rate and a lowering of its longer-term loan prime.

Performance Contributors and Detractors:

The portfolio’s overweight to A shares detracted from performance in the quarter. The A-share markets experienced a pull back on weak consumer sentiment given the Chinese government’s zero-COVID policy which has impacted the domestic market much more so than the Hong Kong market in our portfolio. From a sector perspective, allocation and stock selection within the real estate sector detracted the most from relative performance. The portfolio’s real estate holdings including CIFI, a property developer focused on building houses near the outer perimeter of tier-one cities, fell amid deepening market concerns about the outlook of the overall property market in China.

On the other hand, stock selection within consumer discretionary and a higher weighting to the industrials sector contributed the most to relative performance. Among the portfolio’s industrial holdings, Shanghai International Airport, one of China’s major airports, was among the top contributors to relative performance.  Although international travelers provide more revenue for the airport, it has benefited from pent up demand in domestic travel. And while international outbound tourism may be a few quarters away pending a more pragmatic approach to China’s zero-COVID policy, we expect Shanghai International Airport and duty-free operators to stand to beneficiaries of an eventual reopening of tourism activities.

Notable Portfolio Changes:

During the quarter, we added to existing positions within the consumer discretionary sector, and information technology sector exposure was decreased given the pull back in technology related stock prices on increased concerns global semiconductor cycle weakness. We also rotated capital within the real estate sector and sold KWG Living. We also added to our position in KE Holdings, a housing transactions platform provider. The real estate segment in China overall has also corrected down quite massively from the valuation standpoint and we believe there is more opportunity to recover from a very weak sentiment. The property sector is a very meaningful part of China’s overall economy, and we are continuing to monitor the health of this market very closely.


China’s second quarter results released in July continued to reflect a weak economy dealing with COVID lockdown issues. At the same time, the overhang from a weak property sector and geopolitical tensions continue to plague China’s equity market performance. While the property market continues to be weak, there are signs that the government is increasingly looking to loosen the very tight conditions, including supporting banks to provide financing to developers, and allowing certain developers to issue renminbi-denominated bonds. The larger unknown is geopolitics, including the how U.S. – China relations will pan out. But there have been signs of pragmatism in Beijing. In August, China resolved a long-running dispute with the U.S. Public Company Accounting Oversight Board (PACOB), and PACOB inspectors are now checking the accounting workbooks for Chinese companies listed in the U.S. As for China’s zero COVID policy, while it is difficult to predict an actual point in time where we might see the end of current strict COVID measures, we are cautiously optimistic that the Chinese government will return to a more pragmatic approach, which strikes a better balance between public health and the economy.

Rolling 12 Month Returns For the period ended 30/09/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-38.28% 6.92% 41.87% 2.62% 0.99% 26/02/2010
MSCI China Index (USD)
-35.29% -7.24% 33.76% -3.77% -2.05%
Matthews China Fund (GBP)
-24.86% 2.01% 36.18% 8.69% 3.70% 28/02/2011
MSCI China Index (GBP)
-21.84% -11.06% 27.50% 1.83% 0.77%

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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