Snapshot
- Total return strategy seeks to access the growth of Asia Pacific with lower volatility
- Unconstrained all-cap portfolio with a quality bias
- Flexible approach offers participation in both growth and value markets
30/04/2010
Inception Date
0.83%
YTD Return (USD)
(as of 28/11/2023)
$17.01
NAV (USD)
(as of 28/11/2023)
+0.01
1 Day NAV Change
(as of 28/11/2023)
Objective
Seeks total return through capital appreciation and current income.
Strategy
The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in income-paying publicly traded common stocks, preferred stocks, convertible preferred stocks and other equity-related instruments of companies located in the Asia Pacific region, 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, 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. The Fund invests in holdings denominated in foreign currencies, 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. There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.
These and other risks associated with investing in the Fund can be found in the prospectus.
Fund Facts
| Inception Date | 30/04/2010 | |
| Fund Assets | $80.49 million (31/10/2023) | |
| Base Currency | USD | |
| ISIN: | LU0491818331 (USD) LU0594556648 (GBP) LU0491818174 (EUR) | |
| Bloomberg Symbol | MATAADI:LX (USD) MATAAIA:LX (GBP) MAASDIE:LX (EUR) | |
| Benchmark | MSCI All Country Asia Pacific Index | |
| Geographic Focus | Asia Pacific: Consists of all countries and markets in Asia, as well as Australia and New Zealand including all developed, emerging and frontier countries and markets in Asia | |
Fees & Expenses
| Management Fee | 0.75% | |
| Total Expense Ratio As of 31/03/2022 | 0.90% ( USD ) 0.90% ( GBP ) 0.90% ( EUR ) | |
| Objective | Seeks total return through capital appreciation and current income. |
| Strategy | The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total net assets, in income-paying publicly traded common stocks, preferred stocks, convertible preferred stocks and other equity-related instruments of companies located in the Asia Pacific region, 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, 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. The Fund invests in holdings denominated in foreign currencies, 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. There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.
The risks associated with investing in the Fund can be found in the prospectus |
Performance
- Monthly
- Quarterly
- Calendar Year
- Rolling 12 Month
Returns
As of 31/10/2023
As of 30/09/2023
For the years ended December 31st
For the period ended 30/09/2023
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.
Yield
(as of 31/10/2023)
3.11%
Dividend Yield
<p data-pm-slice="1 1 []">Dividend Yield (trailing) is the weighted average sum of the dividends paid by each equity security held by the Fund over the last 12 months divided by the current price as of report date. The annualised dividend yield is for the equity-only portion of the Fund and does not reflect the actual yield an investor in the Fund would receive. There can be no guarantee that companies that the Fund invests in, and which have historically paid dividends, will continue to pay them or to pay them at the current rates in the future. A positive distribution yield does not imply positive return, and past yields are no guarantee of future yields.</p>
| Dividend Yield | 3.11% |
Source: FactSet Research Systems, Bloomberg, Matthews Asia
Portfolio Characteristics
(as of 31/10/2023)Sources: Factset Research Systems, Inc.
Risk Metrics (3 Yr Return)
(as of 31/10/2023)-8.00%
Alpha
0.90
Beta
73.67%
Upside Capture
112.37%
Downside Capture
-0.68
Sharpe Ratio
-1.27
Information Ratio
5.97%
Tracking Error
88.08
R²
Fund Risk Metrics are reflective of Class I USD ACC shares.
Sources: Zephyr StyleADVISOR
Top 10 Holdings
(as of 31/10/2023)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 31/10/2023)- Sector Allocation
- Country Allocation
- Asset Type Breakdown
- Market Cap Exposure
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
Not all countries are included in the benchmark index(es).
Source: FactSet Research Systems.
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.
Ratings
(as of 31/10/2023)
CATEGORY: Asia-Pacific Equity
| OVERALL | 3 stars |
| 3 YEAR | 2 stars |
| 5 YEAR | 2 stars |
| 10 YEAR | 3 stars |
Square Mile Rating Report
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
Robert J. Horrocks, PhD
Lead Manager
Robert J. Horrocks, PhD
Chief Investment Officer and Portfolio Manager
Robert Horrocks is Chief Investment Officer and Portfolio Manager at Matthews and has been a Matthews Asia Funds Trustee since 2018. He manages the firm’s Asian Growth and Income and Asia Dividend Strategy and co-manages the Asia ex Japan Total Return Equity Strategy. As Chief Investment Officer, Robert oversees the firm’s investment process and investment professionals and sets the research agenda for the investment team. Before joining Matthews in 2008, Robert was Head of Research at Mirae Asset Management in Hong Kong. From 2003 to 2006, Robert served as Chief Investment Officer for Everbright Pramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securities in Hong Kong before moving on to spend eight years working in several different Asian jurisdictions for Schroders, including stints as Country General Manager in Taiwan, Deputy Chief Investment Officer in Korea and Designated Chief Investment Officer in Shanghai. Robert earned his PhD in Chinese Economic History from Leeds University in the United Kingdom, and is fluent in Mandarin.
Kenneth Lowe, CFA
Lead Manager
Kenneth Lowe, CFA
Portfolio Manager
Kenneth Lowe is a Portfolio Manager at Matthews and manages the firm’s Asian Growth and Income, Asia Dividend and the Asia ex Japan Total Return Equity Strategies. Prior to joining Matthews in 2010, he was an Investment Manager on the Asia and Global Emerging Market Equities Team at Martin Currie Investment Management in Edinburgh, Scotland. Kenneth received an M.A. in Mathematics and Economics from the University of Glasgow.
Elli Lee
Co-Manager
Elli Lee
Portfolio Manager
Elli Lee is a Portfolio Manager at Matthews and manages the firm’s Korea Strategy and co-manages the Asia Dividend, China Dividend and Asian Growth and Income Strategies. Prior to joining Matthews in 2016, Elli worked at Bank of America Merrill Lynch for 10 years, most recently in Korean Equity Sales and previously as an Equity Research Analyst covering South Korea’s engineering, construction, steel and education sectors. From 2003 to 2005, Elli was an Investor Relations Specialist at Hana Financial Group in Seoul. She earned a Master of Science in Global Finance from the Hong Kong University of Science and Technology Business School and New York University Stern School of Business, and received a B.A. in Economics from Bates College. Elli is fluent in Korean.
Siddharth Bhargava
Co-Manager
Siddharth Bhargava
Portfolio Manager
Siddharth Bhargava is a Portfolio Manager at Matthews and co-manages the firm’s Asian Growth and Income and Asia Dividend Strategies. Prior to joining Matthews in 2011, he was an Investment Analyst at Navigator Capital. Siddharth also served as a credit and debt market research assistant to Dr. Edward Altman at the New York University Salomon Center. From 2005 to 2008, he was a Credit Analyst at Sandell Asset Management. Siddharth received a B.A. in Economics from the University of Virginia and an MBA from the Stern School of Business at New York University. He is fluent in Hindi and conversational in German.
Winnie Chwang
Co-Manager
Winnie Chwang
Portfolio Manager
Winnie Chwang is a Portfolio Manager at Matthews and manages the firm’s China Small Companies and China Dividend Strategies and co-manages the China, Pacific Tiger and Asia Dividend Strategies. She joined the firm in 2004 and has built her investment career at the firm. Winnie earned an MBA from the Haas School of Business and received her B.A. in Economics with a minor in Business Administration from the University of California, Berkeley. She is fluent in Mandarin and conversational in Cantonese.
Fund Literature
Factsheet Prospectus UK KIID (USD) UK KIID (GBP) UK KIID (EUR) KID (USD) KID (GBP) KID (EUR)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 2023
For the quarter ending 30 September 2023, the Matthews Asia Dividend Fund returned -3.98%, while its benchmark, the MSCI All Country Asia Pacific Index, returned -2.65%.
Market Environment:
The last quarter was a challenge for most major markets, both developed and emerging. Resilience in the U.S. fueled concerns that the Federal Reserve will sustain higher for longer interest rates and this pressured risk assets globally. In addition, a rise in oil prices and renewed strength in the U.S. dollar have worked against emerging markets. Investors are also starting to re-evaluate the chances of a liquidity-induced recession in developed economies which could hamper demand for emerging market-originated exports. In China, economic data continued to disappoint while negative news about the real estate sector re-emerged. On a more optimistic note, the cadence of policy announcements aimed at supporting China’s economy seems to suggest that the government is keen on getting its key sectors moving again. Elsewhere, India’s equity market performed strongly in the period helped by a robust macroeconomic backdrop, resilient corporate earnings and solid inflows.
Performance Contributors and Detractors:
At the regional level, the portfolio’s stock selection in China/Hong Kong was the largest detractor to relative returns in the period. Internet platforms such as JD.com and Tencent Holdings among some other economically sensitive holdings hurt performance. Stock selection in Japan was also negative as certain holdings across a variety of sectors fell throughout the quarter, and some of our holdings in India struggled to participate in that market’s move upward. On the other hand, stock selection in Australia was the biggest contributor to relative returns while stock selection in South Korea was also helpful as the portfolio’s more limited holdings declined less than the market on average, aided by a lack of exposure to areas such as those linked to electric vehicle batteries. In addition, the portfolio’s off-benchmark allocation to the frontier market of Vietnam was a top contributor to relative returns.
At the sector level, stock selection in financials and consumer discretionary weighed on relative performance. In contrast, an underweight and stock selection within information technology (IT) and stock selection in consumer staples contributed to performance.
At the holdings level, AIA Group was the largest detractor to total returns during the period. Although the company continued to deliver what we believe was robust value of new business growth in the first half, the stock has performed poorly in recent months. This is potentially due to concerns over the growth and margin profile of its expansion in China combined with overall fund flow in Asia equity markets negatively impacting the stock. Kakaku.com, a Japanese internet company that includes a price comparison platform as well as other services such as restaurant promotions, declined as results remained weaker than hoped. Fellow Japanese company Keyence, a leader in industrial automation and inspection equipment, also sputtered on earnings given the softer backdrop for automation demand and some areas of rising costs. Conversely, Vietnamese IT services company FPT Corp. was the biggest contributor to total returns as the company has been seeing reasonable earnings growth momentum, particularly within digital transformation. Australian refinery, distributor and retailer Ampol also gained amid decent results, despite a refinery outage, given growth in non-fuel and international earnings. Disco Corp., a Japanese leader in precision processing equipment for cutting, grinding and polishing in the technology industry, moved up further in part due to its exposure to higher growth areas such as generative artificial intelligence (AI) and power semiconductors.
Notable Portfolio Changes:
We exited Japanese life insurer Dai Ichi Life during the quarter. Although not expensive, we believe that the company has somewhat limited sustainable growth drivers and that these funds are better utilized elsewhere within the portfolio.
Outlook:
Questions remain over the economic outlook in the U.S. as markets digest the prospect that the Federal Reserve will maintain a policy of higher rates for longer. This could also impact certain Asian markets given they may have less scope for monetary easing while facing tight funding costs. China is still dealing with many challenges that shouldn’t be dismissed, including a soft property market, liquidity issues among developers, low consumer confidence and what appear to be dashed entrepreneurial spirits. This economic weakness may allow for some policy easing in China as demonstrated by recent moves. This, alongside significant household savings, provides a degree of comfort at a macroeconomic level. At a microeconomic level, weak sentiment toward the Chinese market, a reasonable base for earnings comparisons in 2024 and appealing valuations are also reasons to be constructive. In Japan, near-term projected earnings growth remains acceptable, and it is the combination of potentially better shareholder returns and the increase in inflation that justify some continued optimism. For the region more broadly, valuations are moderate. The MSCI Asia Pacific Index trades at 12.4x FY24 P/E with over 13% growth expected for next year on current estimates. While this appears reasonably attractive, the macroeconomic backdrop remains uncertain and potentially volatile in our estimation. We continue to focus on keeping the portfolio invested in those companies that we believe can manage through such an environment as well as serve our clients well over the long term.
Rolling 12 Month Returns For the period ended 30/09/2023 - I (Acc)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg