Matthews China Dividend Fund

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


Inception Date


YTD Return (USD)

(as of 20/02/2024)



(as of 20/02/2024)


1 Day NAV Change

(as of 20/02/2024)


Seeks total return with an emphasis on providing current income.


The Fund seeks to achieve its investment objective by investing, directly or indirectly, at least 65% of its total assets, in income-paying publicly traded common stocks, preferred stocks, convertible preferred stocks, and other equity-related instruments of companies located in China. For purpose of this policy, China includes the People's Republic of China, its administrative and other districts, such as Hong Kong, as well as Taiwan. The Fund may also invest in convertible fixed-income securities.


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. Investing in Chinese securities involve risks. Heightened risks related to the regulatory environment and the potential actions by the Chinese government could negatively impact performance. The Fund invests in holdings denominated in foreign currency, 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. Investments in a single-country fund may be subject to a higher degree of market risk than diversified funds because of concentration in a specific country.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 31/01/2013
Fund Assets $4.84 million (31/01/2024)
Base Currency USD
ISIN: LU0871673488 (USD)
Bloomberg Symbol MATACDI:LX (USD)
Benchmark MSCI China Index
Geographic Focus China and Taiwan: China includes its administrative and other districts, such as Hong Kong
Fees & Expenses
Management Fee 0.75%
Total Expense Ratio As of 31/03/2022 1.00% ( USD )


  • Monthly
  • Quarterly
  • Calendar Year
  • Rolling 12 Month
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As of 31/01/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
-9.15% -12.98% -9.15% -34.14% -16.03% -4.07% 2.68% 2.70% 31/01/2013
MSCI China Index (USD)
-10.61% -10.56% -10.61% -28.86% -23.15% -6.79% 0.60% -0.10%
As of 31/12/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
-1.99% -8.78% -20.65% -20.65% -12.66% -1.00% 3.12% 3.63% 31/01/2013
MSCI China Index (USD)
-2.40% -4.21% -11.04% -11.04% -18.31% -2.65% 1.03% 0.93%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews China Dividend Fund (USD)
-20.65% -16.29% 0.32% 24.30% 14.82% -10.44% 38.09% 6.09% 7.94% 0.92%
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26%
For the period ended 31/12/2023
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Dividend Fund (USD)
-20.65% -16.29% 0.32% 24.30% 14.82% 31/01/2013
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66%

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.


(as of 31/01/2024)
4.25% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/01/2024)
Fund Benchmark
Number of Positions 32 765
Weighted Average Market Cap $73.4 billion $108.7 billion
Active Share 77.2 n.a.
P/E using FY1 estimates 8.9x 8.9x
P/E using FY2 estimates 7.8x 8.0x
Price/Cash Flow 5.6 4.8
Price/Book 1.2 1.1
Return On Equity 14.5 12.5
EPS Growth (3 Yr) 8.4% 12.7%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/12/2023)
Upside Capture
Downside Capture
Sharpe Ratio
Information Ratio
Tracking Error

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

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 31/01/2024)
Name Sector % Net Assets
Tencent Holdings, Ltd. Communication Services 9.4
Alibaba Group Holding, Ltd. Consumer Discretionary 7.8
CITIC Telecom International Holdings, Ltd. Communication Services 6.0
Yangzijiang Shipbuilding Holdings, Ltd. Industrials 4.4
Wuliangye Yibin Co., Ltd. Consumer Staples 3.4
Haier Smart Home Co., Ltd. Consumer Discretionary 3.3
E Ink Holdings, Inc. Information Technology 3.3
Postal Savings Bank of China Co., Ltd. Financials 3.1
China Merchants Bank Co., Ltd. Financials 3.1
PICC Property & Casualty Co., Ltd. Financials 2.9
TOTAL 46.7

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 31/01/2024)
  • Sector Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 25.0 28.9 -3.9
Communication Services 16.9 20.3 -3.4
Financials 15.7 17.3 -1.6
Consumer Staples 8.1 5.1 3.0
Industrials 6.0 5.3 0.7
Real Estate 3.5 2.5 1.0
Materials 3.4 3.2 0.2
Information Technology 3.3 5.7 -2.4
Energy 2.8 3.8 -1.0
Health Care 1.6 5.1 -3.5
Utilities 1.6 2.7 -1.1
Cash and Other Assets, Less Liabilities 12.1 0.0 12.1

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

Asset Type Fund
Common Equities and ADRs 87.9
Cash and Other Assets, Less Liabilities 12.1
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 40.9 62.6 -21.7
Large Cap ($10B-$25B) 13.0 17.3 -4.3
Mid Cap ($3B-$10B) 16.0 16.5 -0.5
Small Cap (under $3B) 18.1 3.6 14.5
Cash and Other Assets, Less Liabilities 12.1 0.0 12.1
China Exposure Portfolio Weight
Hong Kong Listed Companies 55.0
Mainland China Listed Companies 13.2
Other 12.7
Cash and Other Assets, Less Liabilities 12.1

Mainland China listed companies includes A Share and B Shares. A Shares are Mainland Chinese companies incorporated in China and listed on the Shanghai or Shenzhen exchanges, available mostly to local Chinese investors and qualified institutional investors. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. ADRs are American Depositary Receipts and GDRs are Global Depositary Receipts. Hong Kong Listed Companies include SAR (Hong Kong) companies, China-affiliated corporations, and H Shares. SAR companies are companies that conduct business in Hong Kong and/or mainland China. China-affiliated corporations [CAC], also known as "Red Chips," are mainland China companies with partial state ownership listed in Hong Kong, and incorporated in Hong Kong. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. Other represents Chinese companies listed in other countries or non-China companies with a majority of revenue coming from China such as Japan, Singapore, Taiwan and the United States or other non-China companies.

Source: FactSet Research Systems unless otherwise noted.
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.


  • 3 YEAR
  • 5 YEAR
  • 10 YEAR
(as of 24/07/2023)

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 ©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.

Portfolio Managers

Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Lead Manager

Winnie  Chwang photo
Winnie Chwang

Lead Manager

Andrew  Mattock, CFA photo
Andrew Mattock, CFA


Elli  Lee photo
Elli Lee



Period ended 31 December 2023

For the year ending 31 December 2023, the Matthews China Dividend Fund returned -20.65%, while its benchmark, the MSCI China Index returned -11.04%. For the fourth quarter of the year, the Fund returned -8.78% versus -4.21% for the benchmark

Market Environment 

2023 was a disappointing year for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post-COVID lockdowns but also due to the lack of any significant stimulus measures by the government. Although the government did start to gradually loosen property purchase-restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound. 

The challenging real estate market and the soft consumption environment have combined to create a potential formula for deflation, in our view. From what we can see, many entrepreneurs—whose animal spirits were curbed during the COVID period—are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francsico in November didn’t really impact the ongoing concerns of the market. And staying at the macro level, Chinese equites were a key exception in a November global equities rally that followed signals by U.S. Federal Reserve Chairman Jay Powell that the U.S. interest rate-upcycle was near an end. 

Performance Contributors and Detractors

An overweight to small- and mid-cap stocks detracted from relative returns in 2023 as these holdings were hurt by the weakness of China’s economic recovery. Stock selection in mega caps also detracted.  

At the sector level, stock selections in consumer discretionary, financials and real estate were the biggest detractors to total and relative returns in the period. On the flip side, stock selection in communication services was the top contributor. The portfolio’s cash position also helped cushion some downside during the year. 

At the holdings level, Xtep International, a sportswear company, was the worst performer and second-biggest detractor to relative returns. While the company’s business has been strong in recent years, the market has started to worry about the inventory condition of the whole industry and whether domestic brands will lose market share to global brands. Alibaba Group was among the biggest detractors to total return, largely as a result of the company abruptly walking back a plan to separate and spin off its cloud business. China Education Group, a provider of vocational education services, was another detractor after the company reported increased impairment losses, narrowing margins and weaker profitability in its full-year results.

On the other hand, CITIC Telecom International Holdings, the parent company of Macau’s leading fixed line and mobile telecom operator, was the top contributor to total and relative returns during the year, as the company maintained a stable business operation and a high dividend payout policy. Yangzijiang Shipbuilding Holdings was another top contributor, as the company continued to win orders for new ships and new environment standards are seeming to prolong the current global ship ordering cycle. Miniso Group, a discount retailer with worldwide presence, also contributed although its share price experienced high volatility during the last quarter as its valuation became rich. 

Notable Portfolio Changes 

We initiated a position in Fuyao Glass Industry Group, a leading automotive glass manufacturer, in the last quarter of the year. We believe the company is well positioned as new electric vehicles (EVs) continue to include more glass content compared with traditional vehicles. In addition, we added a position in Kanzhun, a high profile recruiting platform. Although we have not seen a clear recovery of hiring across all segments in China, a feature of Kanzhun’s services—enabling hiring managers and job applicants to communicate online—makes it especially attractive to younger segments of the workforce. 

In contrast, we sold our position in China Vanke, a real estate developer, given the significant difficulties that these firms face in trying to sell new residential properties and monetize other commercial real estate assets, such as shopping malls or warehouses, in such an uncertain environment. We also exited OPT Machine Vision Technology, a supplier of factory equipment, as the company disappointed in securing new orders in its new EV batteries business while its traditional consumer electronics customers didn’t bring in much growth.


We remain cautious on Chinese equities. Both domestic and international investors have had their confidence severely tested over the last three years. Unlike many other equities markets, there is no “natural” inflow into China’s market through pensions or retirement savings plans. That’s left only selected groups of companies with strong cash flow and balance sheets being active in the market, buying back their own shares. 

Among the traditional drivers of Chinese economic growth, aside from real estate, the export sector is still demonstrating some strength. However, as China grows its share of global industrial output, it raises the specter of more trade frictions alongside continuing U.S. tariffs. In terms of consumption, the third economic driver, Chinese consumers are likely to continue to behave very conservatively due to a lackluster employment market and bleak outlook for income growth. Industries with high paying jobs have unfortunately become casualties of tightened regulation and some have been subject to pay-cut directives from the government. 

Chinese policymakers, in our view, have not yet realized the real threat of deflation to the economy. Although we don’t fully subscribe to the theory of a “Japanification” of China, we believe the government needs to do a lot more to avoid this trap and the risk of a “lost decade.”

Rolling 12 Month Returns For the period ended 31/12/2023 - I (Acc)
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Dividend Fund (USD)
-20.65% -16.29% 0.32% 24.30% 14.82% 31/01/2013
MSCI China Index (USD)
-11.04% -21.80% -21.64% 29.67% 23.66%

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. 

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