TOP

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

-26.68%

YTD Return (USD)

(as of 26/09/2022)

$18.66

NAV (USD)

(as of 26/09/2022)

-0.09

1 Day NAV Change

(as of 26/09/2022)

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 $516.62 million (31/08/2022)
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
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 31/08/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
0.57% -2.22% -16.97% -17.88% 11.65% 9.33% n.a. 11.72% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
0.02% -5.46% -17.07% -21.45% 4.15% 1.80% n.a. 6.32%
Matthews Asia ex Japan Dividend Fund (GBP)
5.08% 5.86% -3.71% -2.64% 13.41% 11.56% n.a. 16.03% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
4.60% 2.40% -3.47% -7.10% 5.74% 3.90% n.a. 10.46%
Matthews Asia ex Japan Dividend Fund (EUR)
2.66% 4.71% -6.02% -2.81% n.a. n.a. n.a. 13.91% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
1.42% 0.72% -6.21% -7.79% n.a. n.a. n.a. 5.96%
As of 30/06/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-2.55% -5.69% -17.25% -21.42% 10.54% 10.21% n.a. 11.98% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-4.40% -8.90% -16.14% -24.78% 2.41% 3.39% n.a. 6.67%
Matthews Asia ex Japan Dividend Fund (GBP)
1.32% 2.27% -7.84% -10.03% 12.29% 11.77% n.a. 15.70% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-0.79% -1.23% -6.48% -14.44% 4.02% 4.79% n.a. 10.21%
Matthews Asia ex Japan Dividend Fund (EUR)
0.48% 0.80% -9.81% -10.07% n.a. n.a. n.a. 12.78% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-2.04% -3.04% -8.78% -14.68% n.a. n.a. n.a. 4.96%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016
Matthews Asia ex Japan Dividend Fund (USD)
3.96% 51.86% 16.73% -12.37% 47.29% 6.89%
MSCI All Country Asia ex Japan Index (USD)
-4.46% 25.36% 18.52% -14.12% 42.08% 5.76%
Matthews Asia ex Japan Dividend Fund (GBP)
5.36% 46.62% 13.21% -7.38% 34.23% 28.50%
MSCI All Country Asia ex Japan Index (GBP)
-3.58% 21.49% 13.94% -8.78% 29.78% 26.15%
Matthews Asia ex Japan Dividend Fund (EUR)
12.67% n.a. n.a. n.a. n.a. n.a.
MSCI All Country Asia ex Japan Index (EUR)
2.79% n.a. n.a. n.a. n.a. n.a.
For the period ended 30/06/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-21.42% 50.65% 14.11% 1.70% 18.38% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-24.78% 40.03% 1.97% -0.18% 10.21%
Matthews Asia ex Japan Dividend Fund (GBP)
-10.03% 33.36% 18.00% 5.43% 16.83% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-14.44% 25.25% 5.03% 3.55% 8.43%
Matthews Asia ex Japan Dividend Fund (EUR)
-10.07% n.a. n.a. n.a. n.a. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-14.68% n.a. 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 31/08/2022)
1.64% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/08/2022)
Fund Benchmark
Number of Positions 55 1,201
Weighted Average Market Cap $58.0 billion $106.1 billion
Active Share 83.0 n.a.
P/E using FY1 estimates 19.7x 11.8x
P/E using FY2 estimates 15.8x 11.1x
Price/Cash Flow 14.3 7.0
Price/Book 3.0 1.6
Return On Equity 17.9 14.7
EPS Growth (3 Yr) 11.0% 11.2%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/08/2022)
7.69%
Alpha
0.92
Beta
97.75%
Upside Capture
68.56%
Downside Capture
0.65
Sharpe Ratio
1.00
Information Ratio
7.53%
Tracking Error
80.79

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

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/08/2022)
Name Sector Country % Net Assets
E Ink Holdings, Inc. Information Technology Taiwan 4.2
Tencent Holdings, Ltd. Communication Services China/Hong Kong 4.0
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 3.8
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.6
Baidu, Inc. Communication Services China/Hong Kong 3.0
Netease, Inc. Communication Services China/Hong Kong 2.5
FPT Corp. Information Technology Vietnam 2.5
JD.com, Inc. Consumer Discretionary China/Hong Kong 2.4
Nam Long Investment Corp. Real Estate Vietnam 2.4
Mobile World Investment Corp. Consumer Discretionary Vietnam 2.4
TOTAL 30.8

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: Brown Brothers Harriman (Luxembourg) S.C.A

Portfolio Breakdown (%)

(as of 31/08/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 21.9 15.2 6.7
Industrials 18.8 6.8 12.0
Information Technology 16.4 21.9 -5.5
Health Care 9.9 4.0 5.9
Communication Services 9.5 10.1 -0.6
Financials 8.2 20.3 -12.1
Real Estate 6.7 3.8 2.9
Consumer Staples 4.0 5.4 -1.4
Materials 3.4 5.4 -2.0
Energy 0.0 3.9 -3.9
Utilities 0.0 3.3 -3.3
Cash and Other Assets, Less Liabilities 1.3 0.0 1.3

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 44.9 43.6 1.3
Taiwan 17.6 16.3 1.3
Vietnam 14.8 0.0 14.8
South Korea 5.8 13.1 -7.3
India 5.7 16.4 -10.7
Singapore 3.2 3.6 -0.4
Malaysia 3.1 1.7 1.4
Thailand 2.1 2.2 -0.1
Indonesia 1.5 2.2 -0.7
Philippines 0.0 0.9 -0.9
Cash and Other Assets, Less Liabilities 1.3 0.0 1.3

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

Asset Type Fund
Common Equities and ADRs 98.7
Cash and Other Assets, Less Liabilities 1.3
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 31.4 57.1 -25.7
Large Cap ($10B-$25B) 5.4 22.3 -16.9
Mid Cap ($3B-$10B) 32.5 18.2 14.3
Small Cap (under $3B) 29.4 2.4 27.0
Cash and Other Assets, Less Liabilities 1.3 0.0 1.3

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
(as of 28/07/2022)

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*

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

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

Co-Manager

S. Joyce Li, CFA photo
S. Joyce Li, 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 June 2022

For the first half of 2022, the Matthews Asia ex Japan Dividend Fund returned -17.25%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -16.14% over the same period. For the quarter ending June 30, 2022, the Fund returned -5.69%, while the benchmark returned -8.90%.

Market Environment:  

During the first half of 2022, a more hawkish policy stance adopted by the U.S. Fed and the European Central Bank has raised the specter of a potential hard landing, and global equity markets including Asia have reacted negatively. The MSCI All Country Asia ex Japan Index had a negative performance of -16.14%, with the worst performance coming from markets with higher sensitivity to U.S. and Europe economies, including South Korea and Taiwan.  Indonesia was the only market in the Index that managed to stay flattish during the six months. The country enjoys fiscal and economic tailwinds from robust commodity prices and reopening of its economy from COVID lockdowns. 

After a decline of 14% in the first quarter due to the Shanghai lockdown and perceived risk contagion from the Russia/Ukraine conflict, China outperformed global equity markets and gained 2.3% in the second quarter. Market confidence on corporate earnings and consumption growth in the medium term was boosted by a series of economic stimulus announcements and the government’s pivot towards a more pragmatic approach with its COVID measures.

Performance Contributors and Detractors:

From a country perspective, our stock selection in China detracted from relative performance during the first half of 2022. Our holdings in China rebounded in the second quarter from their steep sell-off earlier in the year, after China reoriented its policies towards restoring growth, by fine tuning its COVID measures and announcing a series of stimulus. On the other hand, our stock selection in South Korea and Singapore contributed positively in the first half.

From a sector perspective, poor stock selection in the consumer discretionary sector detracted the most from relative performance. Our portfolio’s holdings in auto parts companies were weighed down by the supply chain disruptions and sharp commodity price spike caused by the Russia/Ukraine conflict. Conversely, an underweight allocation and stock selection within information technology contributed the most to the relative performance.

Turning to individual stocks, Nam Long Investment, a leading property developer specializing in affordable housing in Vietnam, was among the biggest detractors to performance in the period. The company’s stock declined with the real estate sector on the Vietnamese government’s recent scrutiny of capital market activities. We believe Nam Long has a track record of prudent financial management and maintains a robust balance sheet to fund its growth, and view the sentiment driven sell-off as temporary. Taiwan Semiconductor Manufacturing Co., the leading semiconductor manufacturer for advanced chips, also performed poorly. Fears of potential recession in developed markets dampens outlook of semiconductor demand. On the positive side, our holding in BOC Aviation, a leading player in the global aircraft operating leasing market, was one of the top contributors to performance. The company demonstrated its top-tier management quality and capital resilience over the past few years and is well positioned for the industry recovery ahead.

Notable Portfolio Changes:

During the reporting period, we increased our allocation to companies that benefited from the change in interest rate regime and companies with exposure to re-opening in most Asian economies. We took advantage of the sell-off in China to add to high-quality growth holdings with attractive valuation. For instance, we initiated a position in Alibaba Group (the largest e-commerce platform in China with enterprise services such as cloud computing) and added to our holding in JD.com (a leading Chinese e-commerce player). We observed major headwinds, including regulations and excessive earnings expectation that caused the severe de-rating on these stocks, started to abate. With more disciplined investment plans compared to the past, large Chinese internet companies are increasingly generating abundant positive free cash flow, and their balance sheet is flushed with high level of net cash. A few of them started conducting large share buybacks and/or paying dividends for the first time, sending an interesting signal underscoring the value in those businesses. We believe the risk/reward profile on Chinese internet stocks now looks attractive.

On the flip side, as the impact from an aggressive U.S. monetary tightening on the global economy remains quite uncertain, the portfolio exited several positions whose underlying businesses are more sensitive towards the global consumer demand situation. Among the exits were Mediatek and Samsung Electronics, two holdings in the information technology sector, as we observed a meaningful slowdown in the smart phone demand and a peaking out of the semiconductor up-cycle.

Outlook:

The overall global growth outlook remains murky with risks of protracted inflation and tight global liquidity amid weak economic growth. However, it is worth noting that wage inflation in most Asian countries remains quite moderate and commodity cost pressure has started to soften as well, allowing more accommodative monetary policies in these countries than their developed market counterparts. 

In particular, Chinese fiscal and monetary support combined with more lenient zero-COVID policy implementation recently provided a positive catalyst for investors to refocus on long-term bottom-up corporate fundamentals for investment opportunities in the market. Admittedly, any major resurgence of COVID and resulting economic weakness in China will prolong the restoration of consumer confidence and delay corporate capital investments.

In this environment, the Fund’s focus remains steadfast—looking for businesses with a strong ability to fend off inflation cost pressures and maintain their earnings and dividend growth outlook.

 

Rolling 12 Month Returns For the period ended 30/06/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-21.42% 50.65% 14.11% 1.70% 18.38% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-24.78% 40.03% 1.97% -0.18% 10.21%
Matthews Asia ex Japan Dividend Fund (GBP)
-10.03% 33.36% 18.00% 5.43% 16.83% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-14.44% 25.25% 5.03% 3.55% 8.43%
Matthews Asia ex Japan Dividend Fund (EUR)
-10.07% N.A. N.A. N.A. N.A. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-14.68% N.A. N.A. N.A. N.A.

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. 

Index Definitions