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Matthews Asia ex Japan Dividend Fund

 Snapshot
  • Total return strategy seeks to access the growth of Asia Pacific ex Japan with lower volatility
  • Unconstrained all-cap portfolio with a quality bias
  • Flexible approach offers participation in both growth and value markets

30/11/2015

Inception Date

9.56%

YTD Return (USD)

(as of 01/02/2023)

$20.62

NAV (USD)

(as of 01/02/2023)

+0.13

1 Day NAV Change

(as of 01/02/2023)

Objective

Seeks total return with an emphasis on providing current income.

Sustainability

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.

Strategy

The Fund pursues its objective by primarily investing in companies that exhibit attractive dividend yields and/or the potential to grow dividends over time. 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 (including, for example, investment trusts and other financial instruments) of companies located in the Asia ex Japan region.

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 30/11/2015
Fund Assets $498.63 million (31/12/2022)
Base Currency USD
ISIN: LU1311311358 (USD) LU1311311515 (GBP) LU1311311788 (EUR)
Bloomberg Symbol MAAEIAU:LX (USD) MAAEIAG:LX (GBP) MAEJDIE: LX (EUR)
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia ex Japan: Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region, excluding Japan
SFDR Classification Article 8
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 31/12/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
1.95% 3.75% -26.05% -26.05% 5.30% 3.61% n.a. 9.34% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-0.14% 11.43% -19.36% -19.36% -1.15% -0.34% n.a. 5.60%
Matthews Asia ex Japan Dividend Fund (GBP)
1.69% -4.82% -17.12% -17.12% 8.58% 6.07% n.a. 12.80% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-1.14% 3.40% -9.19% -9.19% 2.08% 2.03% n.a. 8.99%
Matthews Asia ex Japan Dividend Fund (EUR)
-0.90% -5.28% -21.56% -21.56% n.a. n.a. n.a. 3.82% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-3.66% 2.28% -14.07% -14.07% n.a. n.a. n.a. 1.38%
As of 31/12/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
1.95% 3.75% -26.05% -26.05% 5.30% 3.61% n.a. 9.34% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-0.14% 11.43% -19.36% -19.36% -1.15% -0.34% n.a. 5.60%
Matthews Asia ex Japan Dividend Fund (GBP)
1.69% -4.82% -17.12% -17.12% 8.58% 6.07% n.a. 12.80% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-1.14% 3.40% -9.19% -9.19% 2.08% 2.03% n.a. 8.99%
Matthews Asia ex Japan Dividend Fund (EUR)
-0.90% -5.28% -21.56% -21.56% n.a. n.a. n.a. 3.82% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-3.66% 2.28% -14.07% -14.07% n.a. n.a. n.a. 1.38%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016
Matthews Asia ex Japan Dividend Fund (USD)
-26.05% 3.96% 51.86% 16.73% -12.37% 47.29% 6.89%
MSCI All Country Asia ex Japan Index (USD)
-19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Asia ex Japan Dividend Fund (GBP)
-17.12% 5.36% 46.62% 13.21% -7.38% 34.23% 28.50%
MSCI All Country Asia ex Japan Index (GBP)
-9.19% -3.58% 21.49% 13.94% -8.78% 29.78% 26.15%
Matthews Asia ex Japan Dividend Fund (EUR)
-21.56% 12.67% n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan Index (EUR)
-14.07% 2.79% n.a. n.a. n.a. n.a. n.a.
For the period ended 31/12/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-26.05% 3.96% 51.86% 16.73% -12.37% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-19.36% -4.46% 25.36% 18.52% -14.12%
Matthews Asia ex Japan Dividend Fund (GBP)
-17.12% 5.36% 46.62% 13.21% -7.38% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-9.19% -3.58% 21.49% 13.94% -8.78%
Matthews Asia ex Japan Dividend Fund (EUR)
-21.56% 12.67% n.a. n.a. n.a. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-14.07% 2.79% n.a. n.a. n.a.

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 31/12/2022)
1.61% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/12/2022)
Fund Benchmark
Number of Positions 51 1,187
Weighted Average Market Cap $71.4 billion $99.5 billion
Active Share 80.7 n.a.
P/E using FY1 estimates 18.5x 11.8x
P/E using FY2 estimates 16.0x 11.8x
Price/Cash Flow 13.2 6.8
Price/Book 2.7 1.5
Return On Equity 17.7 14.5
EPS Growth (3 Yr) 19.0% 9.8%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/12/2022)
6.66%
Alpha
0.94
Beta
102.07%
Upside Capture
82.18%
Downside Capture
0.21
Sharpe Ratio
0.77
Information Ratio
8.35%
Tracking Error
85.09

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

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/12/2022)
Name Sector Country % Net Assets
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.4
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 5.1
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 4.0
E Ink Holdings, Inc. Information Technology Taiwan 2.9
Samsung Electronics Co., Ltd. Information Technology South Korea 2.6
China Tourism Group Duty Free Corp., Ltd. Consumer Discretionary China/Hong Kong 2.6
JD.com, Inc. Consumer Discretionary China/Hong Kong 2.5
Pharmaron Beijing Co., Ltd. Health Care China/Hong Kong 2.4
Poya International Co., Ltd. Consumer Discretionary Taiwan 2.4
FPT Corp. Information Technology Vietnam 2.4
TOTAL 32.3

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 31/12/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 20.8 15.0 5.8
Information Technology 19.8 21.0 -1.2
Industrials 19.3 6.8 12.5
Health Care 12.7 4.1 8.6
Financials 7.8 21.5 -13.7
Communication Services 7.7 9.9 -2.2
Real Estate 4.8 4.0 0.8
Consumer Staples 3.2 5.5 -2.3
Materials 2.6 5.4 -2.8
Energy 0.0 3.7 -3.7
Utilities 0.0 3.1 -3.1
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

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

Country Fund Benchmark Difference
China/Hong Kong 42.8 44.3 -1.5
Taiwan 17.7 15.4 2.3
Vietnam 11.9 0.0 11.9
South Korea 8.5 12.8 -4.3
India 6.0 16.3 -10.3
Malaysia 3.4 1.8 1.6
Indonesia 3.1 2.2 0.9
Singapore 2.9 3.9 -1.0
Thailand 2.2 2.5 -0.3
Philippines 0.0 0.8 -0.8
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

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

Asset Type Fund
Common Equities and ADRs 98.8
Cash and Other Assets, Less Liabilities 1.2
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 32.5 56.5 -24.0
Large Cap ($10B-$25B) 6.0 22.5 -16.5
Mid Cap ($3B-$10B) 20.2 19.3 0.9
Small Cap (under $3B) 40.1 1.6 38.5
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

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.

ESG Characteristics

(as of 31/12/2022)
  • Business Involvement
  • Sustainability Attributes
Name Fund Benchmark Difference
Controversial Weapons
Fund Coverage: 77.0% Benchmark Coverage: 96.5%
0.0 0.3 -0.3
Tobacco
Fund Coverage: 80.9% Benchmark Coverage: 99.8%
0.0 0.4 -0.4
Name Fund Benchmark Difference
UN Global Compact Violators
Fund Coverage: 100.0% Benchmark Coverage: 100.0%
0.0 0.7 -0.7
Board Diversity
Fund Coverage: 100.0% Benchmark Coverage: 99.1%
24.2 20.4 3.8

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: 80.53; Benchmark Coverage: 98 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.

Ratings

  • OVERALL
  • 3 YEAR
  • 5 YEAR
(as of 23/01/2023)

Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.

The Elite RatingTMsystem is proprietary to FundCalibre Ltd, but should not be taken as a recommendation.

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 ©2021 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*

Sharat  Shroff, CFA photo
Sharat Shroff, CFA

Lead Manager

Kenneth  Lowe, CFA photo
Kenneth Lowe, CFA

Lead Manager

Inbok  Song photo
Inbok Song

Co-Manager

Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Co-Manager

Robert J. Horrocks, PhD photo
Jeremy  Sutch, CFA photo
Jeremy Sutch, CFA

Co-Manager

Sojung  Park photo
Sojung Park

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 31 December 2022

For the year ending 31 December 2022, the Matthews Asia ex Japan Dividend Fund returned -26.05%, while its benchmark, the MSCI All Country Asia ex Japan Index returned -19.36%. For the fourth quarter of the year, the Fund returned 3.75% versus 11.43% for the benchmark.

Market Environment:

2022 was a painful year for investors in Asian equities due to a combination of the negative effects from rising inflation in the Western world and China’s continued restrictive zero-COVID policy. Earlier in the year, China’s equities received support amid indications Beijing was easing back on its regulatory interventions in the technology and consumer internet markets only for them to fall on concerns over an economic slowdown caused by the government’s implementation of its zero-COVID strategy.

In the last two quarters, the portfolio has been hurt by its exposure to the Vietnamese market. This was triggered by two events: firstly, rising U.S. interest rates have placed real pressure on the Vietnamese dong and secondly, and more significantly, the Vietnamese government launched an anti-corruption investigation into fraudulent corporate activities within the real estate sector. Both led to greater risk aversion in the marketplace.

India is a different story. While there are good quality businesses in the country, valuation multiples are among the highest in Asia which have led us to being more cautious and selective in our exposure. These different market dynamics within Asia have all been set against a macroeconomic backdrop where U.S. Fed policy has influenced not only Asian but global markets in general.

Performance Contributors and Detractors:

From a country perspective, China/Hong Kong was the biggest detractor to performance during 2022. Chinese equities broadly have been hurt by the significant economic impact of the government’s zero-COVID policy. The negative impact of the zero-COVID approach on performance was mitigated in the fourth quarter when the government abruptly scrapped the policy. Vietnam also detracted after the government-led probe into the real estate sector triggered a sharp selloff in the market.

On the other hand, our underweight allocation to South Korea and good stock selection in Taiwan contributed the most to relative performance.

From a sector perspective, consumer discretionary was the biggest detractor as holdings in Chinese discretionary names suffered poor share performance due to the impact of the country’s zero-COVID policy. In contrast, our underweight and stock selection in information technology contributed the most to relative performance.

At the holdings level, Chinese and Vietnamese companies were among the biggest detractors to performance. Hoa Phat Group, a Vietnamese materials company, detracted as the company's profit margins were hurt by surging input material costs while the finished steel products' selling price suffered from oversupply. On the other hand, BGF Retail, a consumer staples company in South Korea, and Bangkok Dusit Medical Services, a health-care company in Thailand, were among the top contributors.  BGF’s convenience store business fared quite well during the current inflationary environment given its strong pricing power, and BDMS benefited from the reopening trend in Asia and recovery of medical tourism in Thailand.

Notable Portfolio Changes:

In the last quarter, we initiated a position in Milkyway Chemical Supply, a China A-share stock with strong earnings and dividend growth prospects, in our view. We reduced positions last year in areas such as financials and materials as inflation and rate-hike expectations started to show signs of peaking out and these have been key share-performance drivers for cyclical businesses in these sectors. We also increased exposure to so-called “re-opening” businesses across Asia as the region has decidedly moved toward living with COVID.

Outlook:

China’s sudden abandonment of its zero-COVID policy is creating significant disruption to its growth in the near term but it is also setting up the Chinese economy to bounce back strongly once the surge in COVID rates starts to abate. Chinese equities remain quite attractively priced even after the recent market rally. Elsewhere, the Vietnam equity market has started to show early signs of stabilization as policymakers have started to address the short-term liquidity crunch in the property sector. The structural growth tailwind for the Vietnamese economy, in our view, remains intact.

Overall, we believe Asia remains an excellent growth market. With the growth outlook for developed economies remaining quite uncertain at this moment, the Asian economy and its equity markets could be a potential bright spot for 2023.

Rolling 12 Month Returns For the period ended 31/12/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-26.05% 3.96% 51.86% 16.73% -12.37% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-19.36% -4.46% 25.36% 18.52% -14.12%
Matthews Asia ex Japan Dividend Fund (GBP)
-17.12% 5.36% 46.62% 13.21% -7.38% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-9.19% -3.58% 21.49% 13.94% -8.78%
Matthews Asia ex Japan Dividend Fund (EUR)
-21.56% 12.67% N.A. N.A. N.A. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-14.07% 2.79% N.A. N.A. N.A.

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. 

Index Definitions