A focus on Asia—and providing compelling investment solutions for our clients—is what we believe distinguishes us among investment managers. Our insights into investment opportunities and risks are backed by proprietary research, a collaborative culture and 30 years of experience.
Effective 17 February 2023, the Asia ex Japan Dividend Fund was renamed to the Asia ex Japan Total Return Equity Fund. Read our Q&A
30/11/2015
Inception Date
-2.63%
YTD Return (USD)
(as of 30/05/2023)
$15.20
NAV (USD)
(as of 30/05/2023)
-0.03
1 Day NAV Change
(as of 30/05/2023)
Seeks total return through capital appreciation and current income.
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.
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.
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.
| Inception Date | 30/11/2015 | |
| Fund Assets | $557.37 million (30/04/2023) | |
| Base Currency | USD | |
| ISIN: | LU1311311432 (USD) LU1311311606 (GBP) | |
| Bloomberg Symbol | MAAEIDU:LX (USD) MAAEIDG:LX (GBP) | |
| 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 | |
| Management Fee | 0.75% | |
| Total Expense Ratio As of 31/03/2022 | 0.90% ( USD ) 0.90% ( GBP ) | |
| Objective | Seeks total return through capital appreciation and current income. |
| 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.
The risks associated with investing in the Fund can be found in the prospectus |
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.
| Dividend Yield | 1.87% |
Source: FactSet Research Systems, Bloomberg, Matthews Asia
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Class I USD ACC shares.
Sources: Zephyr StyleADVISOR
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
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.
Board Diversity: Represents the weighted average ratio of female 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.
Fund Coverage: 86%; Benchmark Coverage: 99% as of 31/03/2023
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, 2021). Carbon intensity represents the issuer’s total carbon emissions per EUR million of revenue (tCO2e divided by EUR million in revenue).
Source: Sourced from ISS ESG. Where not covered by external data providers, we have tried to source these data points.
| 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.
(as of 30/04/2023)
CATEGORY: Asia ex-Japan Equity
| OVERALL | 5 stars |
| 3 YEAR | 4 stars |
| 5 YEAR | 5 stars |
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 ©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.
Lead Manager
Portfolio Manager
Sharat Shroff is a Portfolio Manager at Matthews and manages the firm’s Pacific Tiger and Asia ex Japan Total Return Equity Strategies and co-manages the India Strategy. Prior to joining Matthews in 2005, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology from the Institute of Technology in Varanasi, India and an MBA from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.
Lead Manager
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.
Co-Manager
Portfolio Manager
Inbok Song is a Portfolio Manager at Matthews and manages the firm’s Pacific Tiger Strategy and co-manages the Asia ex Japan Total Return Equity, Emerging Markets Sustainable Future and Asia Innovators Strategies. Prior to rejoining Matthews in 2019, Inbok spent three years at Seafarer Capital Partners as a portfolio manager, the firm’s Director of Research and chief data scientist. Previously she was at Thornburg Investment Management as an associate portfolio manager. From 2007 to 2015, she was at Matthews, most recently as a portfolio manager. From 2005 to 2006, Inbok served as an Analyst and Technology Specialist at T. Stone Corp., a private equity firm in Seoul, South Korea. From 2004 to 2005, she was a research engineer for Samsung SDI in Seoul. Inbok received both a B.A. and Masters in Materials Science and Engineering from Seoul National University. She received a Masters in International Management from the University of London, King’s College, and also an M.A. in Management Science and Engineering, with a concentration in finance from Stanford University. Inbok is fluent in Korean.
Co-Manager
Portfolio Manager
Sherwood Zhang is a Portfolio Manager at Matthews and manages the firm’s China Dividend and China A-Shares Strategies and co-manages the China and Asia ex Japan Total Return Equity Strategies. Prior to joining Matthews in 2011, Sherwood was an analyst at Passport Capital from 2007 to 2010, where he focused on such industries as property and basic materials in China as well as consumer-related sectors. Before earning his MBA in 2007, Sherwood served as a Senior Treasury Officer for Hang Seng Bank in Shanghai and Hong Kong, and worked as a Foreign Exchange Trader at Shanghai Pudong Development Bank in Shanghai. He received his MBA from the University of Maryland and his Bachelor of Economics in Finance from Shanghai University. Sherwood is fluent in Mandarin and speaks conversational Cantonese.
Co-Manager
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.
Co-Manager
Portfolio Manager
Jeremy Sutch is a Portfolio Manager at Matthews and co-manages the firm’s Emerging Markets Small Companies, Asia Small Companies and Asia ex Japan Total Return Equity Strategies. Prior to joining Matthews in 2015, he was Director and Global Head of Emerging Companies at Standard Chartered Bank in Hong Kong from 2012 to 2015, responsible for the fundamental analysis of companies in Asia, with a particular focus on small- and mid-capitalization companies. From 2009 to 2012, he was Managing Director at MJP Capital in Hong Kong, which he co-founded. His prior experience has included managing small-cap equities at Indus Capital Advisors and serving as Head of Hong Kong Research for ABN AMRO Asia Securities. Jeremy earned an M.A. in French and History from the University of Edinburgh.
Co-Manager
Portfolio Manager
Sojung Park is a Portfolio Manager at Matthews and co-manages the firm’s Korea and Asia ex Japan Total Return Equity Strategies. Prior to joining the Matthews in 2016, she earned an MBA from the University of Chicago’s Booth School of Business. From 2010 to 2013, Sojung worked as an Equity Research Analyst at HSBC Securities as primary analyst for mid-cap companies in the Korean financial services sector, and from 2009 to 2010, was an Equity Research Associate at E*Trade Securities. She received a Bachelor of Business Administration from Seoul National University and is fluent in Korean.
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 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).
Commentary
Period ended 31 March 2023
For the quarter ending 31 March 2023, the Matthews Asia ex Japan Total Return Equity Fund returned 2.66%, while its benchmark, the MSCI All Country Asia ex Japan Index, returned 4.39%.
Market Environment:
The region continued to recover in the first quarter with strength relatively broad based across markets as it appears that the U.S. dollar has begun to peak out. A reopening China moved higher as COVID restrictions were scrapped, as the property sector began to recover with easing liquidity, and as there is a low base for comparable earnings this year. Taiwan and South Korea also moved higher as there is an ongoing inventory digestion in the technology sector.
India was a major exception as markets fell having entered the year at lofty valuations and as economic growth disappoints already high expectations. The domestic Hong Kong market also struggled as the pivotal property market remains weak and as exports declined markedly.
Performance Contributors and Detractors:
From a country perspective, stock selection in China/Hong Kong was the biggest detractor in the quarter as select state-owned enterprises and reopening plays where the portfolio has limited exposure gained while poor earnings delivery from certain holdings hindered performance. The portfolio’s underweight and stock selection in South Korea was also a large detractor to relative performance as our holdings in information technology (IT) didn’t perform as well as those companies more exposed to the semiconductor memory cycle. Conversely, the portfolio benefited from an underweight position and stock selection in India as there is no exposure to problematic investment groups or weaker-performing financial companies. Stock selection and allocation in Taiwan was also positive with smaller companies performing well.
At the sector level, our overweight and stock selection in industrials and our stock selection in IT were detractors, the latter because of our more limited exposure to certain semiconductor-related stocks. In contrast, our underweight and stock selection in financials was a top contributor, as the sector struggled and the portfolio had exposure to areas in Southeast Asia that delivered reasonable performance. Lack of exposure to energy and utilities sectors also supported relative performance.
Among individual holdings, a bottom contributor was JD.com as the e-commerce platform fell following concerns that its new subsidy regime for customers will impact margins while the overall market remains competitive. Chinese life science service company Pharmaron Beijing dropped as its controlling shareholders are looking to reduce their stake while earnings disappointed with biologics, cell gene therapy and new overseas manufacturing capabilities hampering profitability.
On the other hand, Chinese internet platforms Alibaba and Tencent were the top contributors to the portfolio during the quarter. Alibaba gained as its cheap valuation was accompanied by a return to earnings growth with losses in local consumer services, international e-commerce and digital media all narrowing. We exited our position during the quarter given the stock’s lack of dividend and our preference for other internet platforms in China. Tencent rallied as its games offerings were more resilient than feared while advertising revenues are recovering and it further improved its ecosystem in areas like video.
Notable Portfolio Changes:
In the first quarter, we initiated a number of new positions including holdings in consumer discretionary, IT, financials and real estate. Positions were closed in some Vietnamese companies and Chinese internet platforms. These alterations were to remove some non-dividend paying equities from the portfolio as well as reduce the previously significant exposure to an off-benchmark single country.
As an example, we have included what we deem to be leading businesses with visible growth at reasonable prices, such as AIA Group, Tata Consultancy Services and Yum China. To fund this, exits have been made in lower quality businesses such as Kido Group and non-dividend payers such as Alibaba and Baidu.
Outlook:
A return to stronger growth for the Chinese economy and company earnings is likely this year. The government has attempted to take a more pro-growth and pro-business stance in policy making and this should help alongside the benefits of reopening and a low base effect. Further, relatively low inflation allows for more policy easing if required. More broadly, a possible peak in the U.S. dollar may be upon us while valuations for the region are a relatively modest 12x P/E. These are reasonably supportive factors, however, the increased possibility of a recession in the U.S. driven by the monetary tightening cycle does raise the prospect of general risk aversion and weaker exports. Against what may remain a volatile backdrop, we believe that a quality approach that balances dividend yields and dividend growth should enable the portfolio to deliver for clients over the cycle.
Rolling 12 Month Returns For the period ended 31/03/2023 - I (Dist)
Sources: Brown Brothers Harriman (Luxembourg) S.C.A, Matthews Asia, FactSet Research Systems, Bloomberg