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 28/03/2023)



(as of 28/03/2023)


1 Day NAV Change

(as of 28/03/2023)


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 $92.48 million (28/02/2023)
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 28/02/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
-12.03% 4.27% -0.52% -15.21% -0.81% -1.14% 4.54% 4.22% 26/02/2010
MSCI China Index (USD)
-10.38% 5.40% 0.18% -16.00% -6.09% -5.35% 2.64% 2.99%
Matthews China Fund (GBP)
-10.55% 3.42% -1.07% -6.20% 1.25% 1.52% 6.96% 6.06% 28/02/2011
MSCI China Index (GBP)
-8.86% 3.68% -0.46% -6.90% -4.40% -2.87% 4.98% 5.00%
As of 31/12/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Fund (USD)
4.81% 17.09% -23.62% -23.62% -1.72% 0.36% 4.75% 4.31% 26/02/2010
MSCI China Index (USD)
5.21% 13.53% -21.80% -21.80% -7.38% -4.40% 2.62% 3.01%
Matthews China Fund (GBP)
4.54% 7.45% -14.45% -14.45% 1.34% 2.72% 7.90% 6.25% 28/02/2011
MSCI China Index (GBP)
4.16% 5.35% -11.95% -11.95% -4.35% -2.13% 5.76% 5.11%
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 31/12/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-23.62% -13.32% 43.38% 33.92% -19.89% 26/02/2010
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75%
Matthews China Fund (GBP)
-14.45% -12.17% 38.50% 29.88% -15.40% 28/02/2011
MSCI China Index (GBP)
-11.95% -20.92% 25.66% 18.88% -13.70%

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 28/02/2023)
Fund Benchmark
Number of Positions 64 712
Weighted Average Market Cap $79.0 billion $117.5 billion
Active Share 74.3 n.a.
P/E using FY1 estimates 15.0x 10.5x
P/E using FY2 estimates 13.3x 10.0x
Price/Cash Flow 10.3 5.8
Price/Book 1.8 1.4
Return On Equity 12.6 12.4
EPS Growth (3 Yr) -8.3% 4.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 28/02/2023)
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 28/02/2023)
Name Sector % Net Assets
Alibaba Group Holding, Ltd. Consumer Discretionary 7.2
PDD Holdings, Inc. Consumer Discretionary 7.1
Meituan Consumer Discretionary 5.3, Inc. Consumer Discretionary 5.0
China International Capital Corp., Ltd. Financials 4.6
China Merchants Bank Co., Ltd. Financials 4.5
Tencent Holdings, Ltd. Communication Services 4.2
KE Holdings, Inc. Real Estate 3.5
CITIC Securities Co., Ltd. Financials 3.2
ENN Energy Holdings, Ltd. Utilities 2.2
TOTAL 46.8

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 28/02/2023)
  • Sector Allocation
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 36.1 28.8 7.3
Financials 16.0 15.7 0.3
Information Technology 10.9 6.0 4.9
Industrials 9.6 5.5 4.1
Communication Services 7.6 19.6 -12.0
Real Estate 7.5 3.5 4.0
Health Care 4.5 6.1 -1.6
Consumer Staples 3.5 5.7 -2.2
Materials 2.4 3.7 -1.3
Utilities 2.2 2.6 -0.4
Energy 0.0 2.6 -2.6
Liabilities in Excess of Cash and Other Assets -0.3 0.0 -0.3

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) 56.2 61.7 -5.5
Large Cap ($10B-$25B) 25.5 20.8 4.7
Mid Cap ($3B-$10B) 15.0 16.1 -1.1
Small Cap (under $3B) 3.6 1.3 2.3
Liabilities in Excess of Cash and Other Assets -0.3 0.0 -0.3
China Exposure Portfolio Weight
A Shares 39.9
SAR (Hong Kong) 37.0
Overseas Listed Companies (OL) 13.1
H Shares 10.2
Liabilities in Excess of Cash and Other Assets -0.3

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 31/12/2022)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 98.8% Benchmark Coverage: 94.6%
0.0 0.0 0.0
Fund Coverage: 99.9% Benchmark Coverage: 99.3%
0.0 0.0 0.0
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100.0% Benchmark Coverage: 100.0%
0.0 0.1 -0.1
Board Diversity
Fund Coverage: 100.0% Benchmark Coverage: 98.8%
23.4 19.4 4.0

Board Diversity: Represents the weighted average ratio of female board members to male 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 31/12/2022)

Fund Coverage: 98.92; Benchmark Coverage: 96.52 as of 31/12/2022

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). Carbon intensity represents the issuer’s total carbon emissions per EUR million of revenue (tCO2e divided by EUR million in revenue).

Source: Sustainalytics, MSCI, Matthews Asia.

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 December 2022

For the year ending 31 December 2022, the Matthews China Fund returned -23.62%, while its benchmark, the MSCI China Index returned -21.80%. For the fourth quarter of the year, the Fund returned 17.09% versus 13.53% for the benchmark. 

Market Environment:

During the year, Chinese small caps lagged their large cap peers. Chinese equities were weak and choppy most of the year with continued worry of an economic growth slowdown in the country, weighed down by COVID-19 and enforced lockdowns, ADR delisting pricing pressures and investor worries that Russia-like sanctions could be implemented upon select Chinese companies. Additionally, geopolitical headwinds combined with disappointing announcements post the 20th Party Congress weighed on markets. China’s property market sentiment continued to be negative, and the real estate sector has been hit hard as potential buyers and local government casted doubts on whether some financially distressed developers can finish and deliver their pre-sold homes on time.

However, the last quarter of the year saw a reversal as Chinese equities posted some of the strongest results within global markets with a rebound in sentiment stemming from the government’s statements and actions which support the easing of COVID-related restrictions in favor of ‘living with COVID’ policies. The roll-back of COVID restrictions gained momentum during the quarter spurring speculation of a forthcoming increase in consumer discretionary activity and overall mobility.

Performance Contributors and Detractors:

The portfolio’s stock selection within the industrials and utilities sectors as well as its under allocation to the real estate sector contributed the most to the Fund’s relative performance for the full year. Among individual holdings, Yangzijiang Shipbuilding, one of the few private shipbuilders left in China and is a well-run and efficient operator, contributed the most to absolute and relative performance. The company outperformed on strong vessel orderbooks given by greater demand on higher freight rates as well as environmentally driven upgrades, which encourages an acceleration of scrapping of old vessels for the industry. China Overseas Property, a property management firm, whose sister company (China Overseas Land and Investment) is one of China’s largest state-owned property developers, was another top contributor to relative performance. In the current market consolidation phase of the real estate industry, state-owned enterprise (SOE) developers are favored as they have some of the strongest balance sheets in the market and have fewer liquidity concerns. China Overseas Property has an asset light business model and is less subject to liquidity concerns. Further, its association with a SOE developer will continue to enable it to grow steadily while at the same time potentially benefit from M&A opportunities.

On the other hand, holdings in the information technology were among the top detractors to performance for the year. Technology holdings, including ACM Research, detracted amid regulatory policies and harsher new technology export controls introduced by the U.S. ACM Research is a semiconductor equipment company which provides a variety of equipment used in China’s foundries. With the new technology export controls in place, which prohibit high end equipment to be exported to China, China’s foundries may slow their capex expansion and reduce semiconductor equipment expenditures as they will not as easily move up the technology curve into more advanced processes.

CIFI Ever Sunshine was another detractor to performance. The company is a property management company and shares a similar business model as China Overseas Property, but is associated with private developer, CIFI. Private developers saw a significant multiple de-rating over the quarter given markets concerns about solvency. We continue to hold CIFI Ever Sunshine as we believe private developers will continue to see their liquidity conditions improve as contracted sales pick up with COVID restrictions easing.

Notable Portfolio Changes:

During the quarter, we added AK Medical, one of China’s leading orthopedics joint manufacturers. We have observed throughout the year that the overall attitude towards drug and medical devices price cuts have moderated and become less severe. This improves the overall predictability of future pricing impact and strengthens earnings visibility for the sector. AK Medical has also demonstrated its competitiveness under harsh pricing environments and has continued to gain market share. We like the orthopedic industry given its large addressable market and continued trends of orthopedic needs increasing given the demographic shifts in China. We also exited China Yongda, a luxury and mass-market auto dealer in China. The company trades at very attractive valuations and we continued to hold onto the stock given potential customer traffic recovery post covid. However, we eventually decided to sell out of the name due to limited portfolio exposure to the growing category of new energy vehicles (NEVs) and concerns that NEVs will require less service and maintenance and affect a sizable part of revenues and profits for the company.


Looking ahead, China’s reopening will unfortunately be messy and the road to recovery will not be a smooth one. However, the overall direction of recovery remains clear and Portfolio Managers expect much of the COVID-related disruptions endured in 2022 to be behind. Global economic outlook looks increasingly uncertain as the US. continues to slow, and Europe’s economic outlook continues to look fragile. In this environment, China will have to depend ever more on its internal growth engine for recovery, which could be a challenge pending more encouraging signs of recovery on the property, consumption and industrial output fronts, although we are cautiously optimistic that China is able to navigate through these challenges. Valuations wise, the Hong Kong market has rebounded, with positive stock performance in the fourth quarter of 2022, bolstered by end-of-COVID optimism. The A-share market however, has not quite reacted to much of the good news surrounding COVID relaxation. Coupled with valuations that are now more attractive, the A-share market stands to benefit from positive catalysts this year and in the portfolio managers’ views, is well positioned for an improvement in 2023.


Rolling 12 Month Returns For the period ended 31/12/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Fund (USD)
-23.62% -13.32% 43.38% 33.92% -19.89% 26/02/2010
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75%
Matthews China Fund (GBP)
-14.45% -12.17% 38.50% 29.88% -15.40% 28/02/2011
MSCI China Index (GBP)
-11.95% -20.92% 25.66% 18.88% -13.70%

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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