A focus on Asia—and providing compelling investment solutions for our clients—is what we believe distinguishes us among investment managers. Our insights into investment opportunities and risks are backed by proprietary research, a collaborative culture and 30 years of experience.
30/04/2015
Inception Date
17.15%
YTD Return (USD)
(as of 15/10/2026)
$26.85
NAV (USD)
(as of 15/10/2026)
-0.74
1 Day NAV Change
(as of 15/10/2026)
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 publicly traded common stocks, preferred stocks and convertible securities of companies located in Japan, and may invest the remainder of its net assets in other permitted assets on a worldwide basis.
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 market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. 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. In addition, because the Fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
These and other risks associated with investing in the Fund can be found in the prospectus.
| Inception Date | 30/04/2015 | |
| Fund Assets | $160.56 million (30/09/2026) | |
| Base Currency | USD | |
| ISIN: | LU1220257130 (USD) LU1220257486 (GBP) LU1525503915 (USD Hedged) | |
| Bloomberg Symbol | MAFJFIU:LX (USD) MAFJFIG:LX (GBP) MAFJIHU:LX (USD Hedged) | |
| Benchmark | MSCI Japan Index | |
| Geographic Focus | Japan | |
| SFDR Classification | Article 8 | |
| Management Fee | 0.75% | |
| Total Expense Ratio | 0.80% ( USD ) 0.80% ( GBP ) 0.80% ( USD Hedged ) | |
| Objective | Long-term capital appreciation. |
| Strategy | The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in publicly traded common stocks, preferred stocks and convertible securities of companies located in Japan, and may invest the remainder of its net assets in other permitted assets on a worldwide basis. |
| Risks |
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 market securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. 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. In addition, because the Fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
The risks associated with investing in the Fund can be found in the prospectus |
Source: Brown Brothers Harriman (Luxembourg) S.C.A.
All returns over 1 year are annualized
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.
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Class I USD ACC shares.
Source: FactSet Research Systems
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
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
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.
Board Diversity: Represents the weighted average ratio of female board members in investee companies.
Tobacco: Represents companies that generate more than 5% of revenue from tobacco manufacturing exposure to 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.
| 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.
Portfolio Manager
Shuntaro Takeuchi is a Portfolio Manager at Matthews. Prior to joining the firm in 2016, he was an Executive Director for Japan Equity Sales at UBS Securities LLC in New York. Beginning in 2003, he worked on both Japanese Equity and International Equity Sales at UBS Japan Securities, based in Tokyo, and held the position of Special Situations Analyst from 2006 to 2008, and Head of International Equity Sales from 2009 to 2013. Before that, he worked at Merrill Lynch Japan from 2001 to 2003 in U.S. Equity Sales. Shuntaro received a B.A. in Commerce and Management from Hitotsubashi University in Tokyo. He is fluent in Japanese.
Portfolio Manager
Donghoon Han is a Portfolio Manager at Matthews. Prior to joining Matthews in 2020, Donghoon was Vice President and portfolio manager at Goldman Sachs Asset Management in Tokyo, responsible for investments in technology, automotive and transportation sectors in Japan. From 2014 to 2016, he was a senior associate at Citadel Global Equities researching technology and industrial sectors in Japan. From 2010 to 2014, Donghoon worked at Dodge & Cox as an equity research associate covering global technology sector with a focus on semiconductors and electronic components. He received B.A. in International Liberal Arts from Waseda University in Tokyo. Donghoon is fluent in Japanese and Korean. He is a Chartered Member of the Securities Analysts Association of Japan.
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.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI China A Onshore Index captures large and mid cap representation across China securities listed on the Shanghai and Shenzhen exchanges. Index is for comparative purposes only and it is not possible to invest directly in an index.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
Commentary
Period ended 30 September 2026
Summary
Market Environment
Japanese equities advanced during the quarter, although returns varied across sectors, market cap and investment styles. Notably, the MSCI Japan Value Index outperformed the MSCI Japan Growth Index by more than 10% in U.S. dollar terms.
Investor focus remained on the path of Bank of Japan policy normalization, rising Japanese government bond yields and movements in the yen. These factors influenced market leadership, particularly across financial companies, exporters and other businesses sensitive to domestic interest rates and currency movements. Meanwhile, manufacturing activity remained subdued and inflation stayed above the Bank of Japan's long-term target, leaving investors to balance a gradually evolving macroeconomic backdrop with generally resilient corporate earnings.
Market leadership broadened as investors placed greater emphasis on earnings delivery, capital returns and company-specific fundamentals. Financial companies continued to benefit from a higher-rate environment and improving shareholder-return policies, while select industrial and service-oriented businesses were supported by digitalization, infrastructure investment and efforts to improve productivity. Within technology, results became more differentiated as investors reassessed near-term expectations for semiconductor demand and capital spending.
Against this backdrop, companies demonstrating durable earnings growth and credible paths to higher profitability were generally better positioned, while businesses more dependent on valuation expansion faced greater scrutiny. Disciplined stock selection and valuation awareness therefore remained central to the Fund's investment approach.
Performance
For the quarter ended September 30, 2026, the Japan Fund returned 3.71% (I Acc USD) in U.S. dollar terms, compared with 6.09% for the MSCI Japan Index over the same period.
By sector, Industrials and Information Technology added to relative performance. Consumer Discretionary was the largest sector detractor. Though Financial, Materials, and Communication Services also weighed on performance. Financials generated positive absolute returns but detracted modestly on a relative basis.
Industrials
Industrials was the largest positive sector contributor. Recruit Holdings, a staffing and human-resources technology company, rose 54% and was the largest holding-level contributor, supported by operating performance and earnings momentum. Hitachi, a diversified industrial and technology company with businesses spanning digital systems, energy and infrastructure, gained 28% as investors continued to recognize its improving earnings profile and portfolio transformation. Toyota Tsusho, a diversified trading company with exposure to mobility, industrial and resource-related businesses, advanced 27% on continued business momentum and was another significant relative contributor.
Information Technology
Information Technology contributed positively to relative performance despite weakness across parts of the semiconductor allocation. NEC, an information technology and network-services company, gained 26% on continued earnings momentum and demand related to digitalization. Tokyo Electron, a leading semiconductor production-equipment company, fell -20% and detracted as its larger portfolio weight amplified the effect of the decline. Renesas Electronics, a supplier of automotive and industrial semiconductors, declined -25% and was also a detractor. Kioxia Holdings, a producer of NAND flash memory used in data-storage applications, fell -37%; however, it modestly contributed to relative performance as its return was slightly ahead of its benchmark comparison.
The longer-term investment cases across the semiconductor and technology holdings remain supported by semiconductor content growth, digital infrastructure and disciplined capital investment. However, near-term performance results may vary with industry demand and customer spending.
Consumer Discretionary and Other Sectors
Consumer Discretionary was the largest sector detractor. Sumitomo Electric Industries, a manufacturer of automotive wiring systems, power cables and electronic components, declined -27% and was one of the largest holding-level detractors as investors became more cautious on cyclical and auto-related demand. This weakness was partly offset by Sony Group, a global entertainment and technology company with businesses across gaming, music, film and image sensors, which gained 19% and contributed modestly to relative performance.
Materials also detracted. Shin-Etsu Chemical, a global producer of semiconductor materials and specialty chemicals, fell -11% as investors reassessed near-term demand and pricing conditions. Within Financials, Mitsubishi UFJ Financial Group, one of Japan's largest banking groups, gained 21% and contributed modestly to relative results as higher domestic rates and improving capital returns supported the sector.
Positioning
Portfolio changes during the quarter were measured and remained consistent with the Fund's focus on durable earnings growth and long-term margin expansion. Exposure to Industrials and Financials increased, while Information Technology exposure declined following gains earlier in the year. These changes reflected bottom-up security selection and valuation discipline rather than broad sector-level views.
We initiated a position in Mizuho Financial Group, one of Japan's major banking groups, with businesses spanning commercial banking, trust banking, securities and asset-management. We believe the position provides exposure to a business that may benefit from a gradually normalizing domestic interest-rate environment, improving profitability and a greater focus on capital returns.
We also added Yamaha Motor, a global manufacturer of motorcycles, marine products and other mobility equipment. In our view, the investment provides exposure to a diversified franchise with established global brands and opportunities to improve earnings through its product mix, operating discipline and demand across mobility and marine markets.
The position in Sumitomo Electric Industries was exited during the quarter. While the company retains competitive positions across automotive wiring, power infrastructure and electronic components, We exited the position as the near-term risk-reward became less favorable in our view. We reallocated capital to opportunities with clearer earnings visibility and potential for improved returns.
Outlook
We remain constructive on Japanese equities, supported by broadly favorable macro conditions and policy signals. Our core view is unchanged: Japan’s equity performance is increasingly earnings-driven, with AI a key driver of returns and a source of growing concentration risk. In this environment, we continue to favor growth at a reasonable price (GARP) opportunities with strong earnings visibility, company-specific earnings upgrades, and beneficiaries of ongoing corporate governance reform, while remaining mindful of potential style rotation should market breadth begin to normalize.
Importantly, relative to other North Asian markets such as Taiwan and South Korea, Japan offers a broader, more liquid opportunity set beyond AI-related themes. While investors can access similar structural growth drivers, including automation, digitalization, industrial upgrading, and advanced manufacturing, Japan offers a wide range of sectors and companies, supporting diversified exposure and potentially lower beta profile.
The structural case for Japan remains intact in our view, underpinned by the progressive globalization of Japanese corporates, expanding access to higher-growth end markets, with globally oriented companies delivering strong earnings growth. In parallel, we continue to view innovation as a persistent alpha source in Japan.
Overall, we believe the market is transitioning from a beta-driven re-rating phase to a differentiation phase, where alpha generation could be less from broad multiple expansion and more from identifying sustainable earnings compounders within an increasingly distorted factor landscape.
Our approach reflects our long-standing observation that Japanese equity returns are primarily earnings driven. We therefore maintain diversified exposure across three different earnings profiles: Linear Growth, Cyclical Growth, and Idiosyncratic Growth. This framework aims to capture varied return drivers while managing risk control.
Linear Growth holdings provide portfolio stability through companies with earnings visibility remains supported by durable structural trends. Cyclical Growth remains an increasingly selective source of upside, particularly in market-leading manufacturing and selected financials exposed to global industrial activity and capital expenditure cycles, as well as policy supported domestic investment themes tied to infrastructure, energy security, defense. Idiosyncratic Growth offers opportunities where company specific catalysts can offset declining macro visibility. Japan’s corporate governance reforms remain an important differentiator, with our focus on companies demonstrating tangible return-on-equity (ROE) improvement and shareholder value creation.
Rolling 12 Month Returns For the period ended 30/09/2026 - I (Acc)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg