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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

-24.56%

YTD Return (USD)

(as of 05/12/2022)

$19.20

NAV (USD)

(as of 05/12/2022)

+0.41

1 Day NAV Change

(as of 05/12/2022)

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 $403.59 million (31/10/2022)
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 31/10/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-10.58% -22.80% -36.27% -36.32% 0.84% 1.84% n.a. 7.24% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-6.09% -18.02% -32.03% -33.74% -4.51% -3.05% n.a. 3.15%
Matthews Asia ex Japan Dividend Fund (GBP)
-14.23% -18.49% -25.31% -23.69% 4.92% 4.75% n.a. 11.44% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-8.95% -13.36% -20.04% -21.11% -0.71% -0.24% n.a. 7.23%
Matthews Asia ex Japan Dividend Fund (EUR)
-12.02% -20.42% -27.15% -25.11% n.a. n.a. n.a. 0.75% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-6.92% -15.43% -21.80% -22.42% n.a. n.a. n.a. -2.68%
As of 30/09/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-14.15% -13.87% -28.72% -27.90% 5.63% 5.90% n.a. 9.11% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-12.73% -13.69% -27.62% -28.48% -1.03% -0.91% n.a. 4.15%
Matthews Asia ex Japan Dividend Fund (GBP)
-9.57% -5.52% -12.92% -12.18% 9.56% 10.07% n.a. 14.13% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-9.03% -6.10% -12.18% -13.61% 2.29% 2.80% n.a. 8.81%
Matthews Asia ex Japan Dividend Fund (EUR)
-11.89% -8.18% -17.19% -14.37% n.a. n.a. n.a. 6.92% 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-10.42% -7.89% -15.98% -15.39% n.a. n.a. n.a. 0.49%
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 30/09/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews Asia ex Japan Dividend Fund (USD)
-27.90% 24.49% 31.32% 1.79% 11.01% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-28.48% 14.73% 18.16% -3.15% 1.74%
Matthews Asia ex Japan Dividend Fund (GBP)
-12.18% 18.77% 26.07% 7.82% 13.95% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-13.61% 10.00% 12.63% 2.49% 4.67%
Matthews Asia ex Japan Dividend Fund (EUR)
-14.37% 25.93% n.a. n.a. n.a. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-15.39% 16.08% 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 31/10/2022)
1.98% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/10/2022)
Fund Benchmark
Number of Positions 55 1,205
Weighted Average Market Cap $34.9 billion $77.8 billion
Active Share 86.2 n.a.
P/E using FY1 estimates 16.7x 10.4x
P/E using FY2 estimates 13.3x 10.2x
Price/Cash Flow 12.3 6.0
Price/Book 2.5 1.4
Return On Equity 17.7 14.9
EPS Growth (3 Yr) 16.6% 11.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/10/2022)
5.96%
Alpha
1.01
Beta
101.24%
Upside Capture
84.53%
Downside Capture
0.01
Sharpe Ratio
0.66
Information Ratio
8.04%
Tracking Error
83.97

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
E Ink Holdings, Inc. Information Technology Taiwan 4.3
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.4
ICICI Bank, Ltd. Financials India 3.0
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.9
FPT Corp. Information Technology Vietnam 2.7
Ashok Leyland, Ltd. Industrials India 2.7
PT Bank Rakyat Indonesia Persero Tbk Financials Indonesia 2.6
Bangkok Dusit Medical Services Public Co., Ltd. Health Care Thailand 2.6
Asia Commercial Bank JSC Financials Vietnam 2.6
Mingyue Optical Lens Co., Ltd. Health Care China/Hong Kong 2.5
TOTAL 29.3

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 31/10/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Industrials 21.0 7.0 14.0
Consumer Discretionary 18.7 13.5 5.2
Information Technology 17.1 22.4 -5.3
Health Care 12.5 4.3 8.2
Financials 10.2 21.7 -11.5
Communication Services 6.1 8.5 -2.4
Real Estate 5.6 3.6 2.0
Consumer Staples 3.2 5.6 -2.4
Materials 2.0 5.8 -3.8
Energy 0.0 4.3 -4.3
Utilities 0.0 3.3 -3.3
Cash and Other Assets, Less Liabilities 3.6 0.0 3.6

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 39.5 38.7 0.8
Taiwan 17.5 15.8 1.7
Vietnam 13.2 0.0 13.2
India 7.8 19.1 -11.3
South Korea 6.6 14.1 -7.5
Malaysia 3.5 1.9 1.6
Singapore 3.1 4.1 -1.0
Indonesia 2.7 2.7 0.0
Thailand 2.6 2.6 0.0
Philippines 0.0 0.9 -0.9
United States 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 3.6 0.0 3.6

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

Asset Type Fund
Common Equities and ADRs 96.4
Cash and Other Assets, Less Liabilities 3.6
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 25.9 53.9 -28.0
Large Cap ($10B-$25B) 5.3 22.4 -17.1
Mid Cap ($3B-$10B) 24.3 20.2 4.1
Small Cap (under $3B) 40.9 3.5 37.4
Cash and Other Assets, Less Liabilities 3.6 0.0 3.6

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
(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 September 2022

For the quarter ending 30 September 2022, the Matthews Asia ex Japan Dividend Fund returned -13.87%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned -13.69%.

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.

Performance Contributors and Detractors:

From a regional perspective, our underweight in India detracted most from relative performance during the third quarter 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. Our stock selection in Singapore and China were also detractors. On the other hand, our stock selection in Taiwan was the biggest contributor to relative performance. Our underweight to South Korea and allocation to Vietnam were also positive contributors to performance.

From a sector perspective, our overweight and poor stock selection in consumer discretionary detracted the most from relative performance as companies with exposure to softening U.S. consumer demand were challenged. Stock selection in consumer staples was also a detractor. Conversely, our strong stock selection in industrials and information technology (IT) were the biggest contributors to relative performance.

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, Leader Harmonious Drive Systems, an industrials company in China which produces parts for industrial robotics, aerospace and semiconductor production, was the top contributor to performance.

Notable Portfolio Changes:

In the third quarter, we initiated positions in: Kido Group, a Vietnam-based company with leading market share in cooking oil, confectionary and frozen food: Dongguan Yiheda Automation, a Chinese manufacturer of factory automation equipment; and AK Medical Holdings, a Chinese producer of medical devices including joint implants. 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 ex Japan Dividend Fund (USD)
-27.90% 24.49% 31.32% 1.79% 11.01% 30/11/2015
MSCI All Country Asia ex Japan Index (USD)
-28.48% 14.73% 18.16% -3.15% 1.74%
Matthews Asia ex Japan Dividend Fund (GBP)
-12.18% 18.77% 26.07% 7.82% 13.95% 30/11/2015
MSCI All Country Asia ex Japan Index (GBP)
-13.61% 10.00% 12.63% 2.49% 4.67%
Matthews Asia ex Japan Dividend Fund (EUR)
-14.37% 25.93% N.A. N.A. N.A. 31/07/2020
MSCI All Country Asia ex Japan Index (EUR)
-15.39% 16.08% 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. 

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