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Matthews Asia Dividend Fund

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

-28.92%

YTD Return (USD)

(as of 05/12/2022)

$17.13

NAV (USD)

(as of 05/12/2022)

+0.12

1 Day NAV Change

(as of 05/12/2022)

Objective

Seeks total return with an emphasis on providing 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 $115.53 million (31/10/2022)
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 )

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
    Returns
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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 Asia Dividend Fund (USD)
-6.16% -17.78% -37.43% -38.15% -6.21% -4.17% 2.60% 3.34% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-1.95% -14.32% -27.60% -28.92% -3.40% -1.53% 3.84% 3.41%
Matthews Asia Dividend Fund (GBP)
-9.96% -13.13% -26.65% -25.85% -2.42% -1.44% 6.10% 5.99% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
-4.93% -9.44% -14.82% -15.37% 0.44% 1.32% 7.39% 5.79%
Matthews Asia Dividend Fund (EUR)
-7.66% -15.24% -28.45% -27.31% -2.41% -1.03% n.a. 0.02% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
-2.81% -11.60% -16.69% -16.77% 0.58% 1.76% n.a. 2.76%
As of 30/09/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund (USD)
-11.95% -11.65% -33.32% -34.52% -2.80% -2.08% 3.32% 3.89% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-11.81% -11.05% -26.16% -27.49% -1.37% -0.31% 4.01% 3.59%
Matthews Asia Dividend Fund (GBP)
-7.25% -3.01% -18.53% -20.17% 0.80% 1.77% 7.35% 7.00% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
-8.07% -3.23% -10.40% -12.41% 1.93% 3.42% 7.92% 6.29%
Matthews Asia Dividend Fund (EUR)
-9.67% -5.82% -22.52% -22.24% 0.91% 1.77% n.a. 1.51% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
-9.48% -5.07% -14.28% -14.21% 2.21% 3.51% n.a. 3.35%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews Asia Dividend Fund (USD)
-1.75% 31.32% 10.66% -12.85% 33.49% 4.09% 3.87% -0.96% 12.26% 21.06%
MSCI All Country Asia Pacific Index (USD)
-1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19% 17.05%
Matthews Asia Dividend Fund (GBP)
-0.44% 26.77% 7.36% -7.98% 21.75% 25.18% 9.10% 5.11% 9.70% 16.00%
MSCI All Country Asia Pacific Index (GBP)
-0.28% 16.36% 15.12% -7.86% 20.61% 25.50% 4.01% 6.53% 10.11% 11.91%
Matthews Asia Dividend Fund (EUR)
6.39% 20.20% 13.02% -8.85% n.a. n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia Pacific Index (EUR)
6.31% 10.15% 21.94% -8.88% n.a. n.a. n.a. n.a. n.a. n.a.
For the period ended 30/09/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia Dividend Fund (USD)
-34.52% 15.32% 21.60% -6.96% 5.38% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-27.49% 18.61% 11.55% -2.60% 5.36%
Matthews Asia Dividend Fund (GBP)
-20.17% 9.90% 16.75% -1.48% 8.18% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
-12.41% 13.72% 6.33% 3.07% 8.39%
Matthews Asia Dividend Fund (EUR)
-22.24% 16.65% 13.27% -1.12% 7.45% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
-14.21% 20.01% 3.71% 3.77% 7.23%

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 31/10/2022)
1.95% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/10/2022)
Fund Benchmark
Number of Positions 57 1,506
Weighted Average Market Cap $36.0 billion $62.8 billion
Active Share 87.6 n.a.
P/E using FY1 estimates 15.8x 11.4x
P/E using FY2 estimates 13.1x 11.1x
Price/Cash Flow 11.9 7.0
Price/Book 2.2 1.4
Return On Equity 16.1 14.3
EPS Growth (3 Yr) 12.5% 10.9%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2022)
-2.85%
Alpha
0.97
Beta
92.01%
Upside Capture
105.41%
Downside Capture
-0.39
Sharpe Ratio
-0.41
Information Ratio
6.91%
Tracking Error
84.28

Fund Risk Metrics are reflective of Class I USD ACC shares.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/10/2022)
Name Sector Country % Net Assets
UNO Minda, Ltd. Consumer Discretionary India 5.8
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 4.3
FPT Corp. Information Technology Vietnam 4.1
KATITAS Co., Ltd. Real Estate Japan 3.4
Asia Commercial Bank JSC Financials Vietnam 3.4
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.1
IDP Education, Ltd. Consumer Discretionary Australia 2.9
SINBON Electronics Co., Ltd. Information Technology Taiwan 2.9
Olympus Corp. Health Care Japan 2.6
ICICI Bank, Ltd. Financials India 2.5
TOTAL 35.0

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
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 29.4 14.2 15.2
Information Technology 14.5 17.0 -2.5
Industrials 13.2 11.7 1.5
Financials 12.1 19.5 -7.4
Communication Services 7.4 7.9 -0.5
Real Estate 7.3 3.8 3.5
Health Care 7.2 7.2 0.0
Consumer Staples 6.1 5.8 0.3
Energy 1.3 3.4 -2.1
Materials 0.0 7.1 -7.1
Utilities 0.0 2.4 -2.4
Cash and Other Assets, Less Liabilities 1.6 0.0 1.6

Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.

Country Fund Benchmark Difference
Japan 30.3 33.1 -2.8
China/Hong Kong 23.1 21.2 1.9
Vietnam 11.5 0.0 11.5
Australia 9.6 11.9 -2.3
India 8.3 10.5 -2.2
Taiwan 6.6 8.6 -2.0
Singapore 3.4 2.3 1.1
Thailand 2.3 1.4 0.9
Indonesia 2.2 1.5 0.7
Bangladesh 1.0 0.0 1.0
South Korea 0.0 7.7 -7.7
Malaysia 0.0 1.0 -1.0
Philippines 0.0 0.5 -0.5
New Zealand 0.0 0.3 -0.3
Cash and Other Assets, Less Liabilities 1.6 0.0 1.6

Not all countries are included in the benchmark index(es).

Asset Type Fund
Common Equities and ADRs 98.4
Cash and Other Assets, Less Liabilities 1.6
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 29.8 54.8 -25.0
Large Cap ($10B-$25B) 11.5 22.7 -11.2
Mid Cap ($3B-$10B) 31.7 20.6 11.1
Small Cap (under $3B) 25.4 1.9 23.5
Cash and Other Assets, Less Liabilities 1.6 0.0 1.6

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

  • OVERALL
  • 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 ©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*

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

S. Joyce Li, CFA photo
S. Joyce Li, CFA

Lead Manager

Robert J. Horrocks, PhD photo
Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Co-Manager

*No Hong Kong based Co-Manager for the Matthews Asia Funds will exercise investment discretion for or on behalf of the Fund in Hong Kong.

Commentary

Period ended 30 September 2022

For the quarter ending 30 September 2022, the Matthews Asia Dividend Fund returned -11.65%, while its benchmark, the MSCI All Country Asia Pacific Index, returned -11.05%.

Market Environment:

During the third quarter, a more affirmative and hawkish stance adopted by the U.S. Federal Reserve and the ongoing energy crisis in Europe increased recessionary risks globally through reactionary tightening by other central banks to defend their currencies and curb imported inflation. Global equities declined broadly during the period. In Asia, Indonesia and India were the only two markets with positive returns, posting 7.8% and 6.8% gains respectively. Indonesia stood out with its government’s policy reforms and resilient economy supported by the commodity cycle. In India, we observed continued strength in capital spending and domestic consumption driven by its residential property market and the economy’s rising role in the global supply chain. However, India’s high valuation at 21.4x forward P/E in the current stage of monetary tightening makes it vulnerable to profit taking. In China, the market declined 22% in the quarter, reflecting caution over a softening economy and corporate earnings in the near term as the government closely adheres to its zero-COVID policy ahead of the Party Congress in October. Meanwhile, Japan fell 7.5% with most of the decline driven by yen depreciation.

Performance Contributors and Detractors:

From a regional perspective, our overweight and stock selection in China detracted most from relative performance during the third quarter as the market worried about an economic slowdown caused by China’s zero-COVID policy. Our underweight allocation to India also hurt relative performance as investors remained positive on the solid trend of capital spending and consumption in the country. The high market valuation of Indian equities makes investments there less attractive at the moment as we see evidence of higher inflation and tightening monetary policies.

On the other hand, our stock selection in Japan contributed positively in the quarter as holdings in consumer sectors received strong earnings tailwinds as restrictions lift on inbound tourism to the country. Our lack of exposure to South Korea and our underweight and stock selection in Taiwan were also positive contributors.

From a sector perspective, poor stock selection in health care detracted the most from relative performance. The market has been concerned about the outlook for Chinese medical and clinical service companies amid geopolitical tensions with the U.S. Conversely, our stock selection in information technology (IT) and consumer discretionary were the biggest contributors to relative performance. Holdings positioned to benefit from a rebound in Japanese tourism and stocks with idiosyncratic earnings drivers were less impacted by global economic challenges and outperformed.

Turning to individual holdings, Chinese internet leaders, including Alibaba Group, Tencent and Baidu, were among the largest detractors to performance in the period. Although sentiment remains pessimistic due to the prospect of near-term earnings hits from weak consumption, these companies have rationalized their capital investments and operational cost base and are better valued for the eventual reopening of the Chinese economy. On the positive side, UNO Minda, a leading auto parts manufacturer in India, was the top contributor to performance. The company posted strong earnings growth, driven by its leading market share in the fast-growing SUV market.

Notable Portfolio Changes:

In the third quarter, we initiated two positions in Japanese stocks whose earnings are expected to grow strongly after Japan fully reopens for inbound tourism. One is Kyoritsu Maintenance, an operator and manager of business and resort hotels. Another is Kotobuki Spirits, a leading retail chain with high popularity among tourists for its concessionaries. The recent depreciation of the yen and benign domestic inflation have further added to the appeal of Japan as a post-pandemic travel destination.

Conversely, we reduced positions in commercial banks, including United Overseas Bank in Singapore and CTBC Financial Holding in Taiwan. The expectation of a longer period of U.S. monetary-tightening policies and a strong U.S. dollar have started to force many other central banks into accelerated tightening and increased the risks of recession in some countries. This has led to heightened risks in lending growth and asset quality trends at commercial banks.

Outlook:

China's zero-COVID policy remains a major impediment to its economic recovery. While the implementation of such restrictive policy could become more pragmatic after October's Party Congress, trying to balance economic growth with pandemic control means a full re-opening of the economy is a low probability event for this year. A weaker Chinese economy, coupled with a hawkish U.S. Fed monetary policy stance and a fragile European economy facing a deep energy crisis, could continue rattling investors' confidence. However, by sticking with our total-return investment approach and using dividends as a quality check, we believe the volatile market environment is also one of the best times to look for well-run Asian businesses with structural growth trends intact and upgrade the overall quality of our portfolio holdings.

 

Rolling 12 Month Returns For the period ended 30/09/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia Dividend Fund (USD)
-34.52% 15.32% 21.60% -6.96% 5.38% 30/04/2010
MSCI All Country Asia Pacific Index (USD)
-27.49% 18.61% 11.55% -2.60% 5.36%
Matthews Asia Dividend Fund (GBP)
-20.17% 9.90% 16.75% -1.48% 8.18% 28/02/2011
MSCI All Country Asia Pacific Index (GBP)
-12.41% 13.72% 6.33% 3.07% 8.39%
Matthews Asia Dividend Fund (EUR)
-22.24% 16.65% 13.27% -1.12% 7.45% 15/05/2017
MSCI All Country Asia Pacific Index (EUR)
-14.21% 20.01% 3.71% 3.77% 7.23%

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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