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 27/03/2023)



(as of 27/03/2023)


1 Day NAV Change

(as of 27/03/2023)


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 $11.71 million (28/02/2023)
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 28/02/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
-8.69% 5.57% -0.05% -7.79% 2.74% 0.68% 6.54% 6.35% 31/01/2013
MSCI China Index (USD)
-10.38% 5.40% 0.18% -16.00% -6.09% -5.35% 2.64% 2.21%
As of 31/12/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
5.62% 16.18% -16.29% -16.29% 1.44% 1.42% n.a. 6.46% 31/01/2013
MSCI China Index (USD)
5.21% 13.53% -21.80% -21.80% -7.38% -4.40% n.a. 2.23%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews China Dividend Fund (USD)
-16.29% 0.32% 24.30% 14.82% -10.44% 38.09% 6.09% 7.94% 0.92%
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75% 54.33% 1.11% -7.62% 8.26%
For the period ended 31/12/2022
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Dividend Fund (USD)
-16.29% 0.32% 24.30% 14.82% -10.44% 31/01/2013
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75%

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 28/02/2023)
2.81% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 28/02/2023)
Fund Benchmark
Number of Positions 38 712
Weighted Average Market Cap $86.1 billion $117.5 billion
Active Share 74.5 n.a.
P/E using FY1 estimates 13.0x 10.5x
P/E using FY2 estimates 10.8x 10.0x
Price/Cash Flow 7.4 5.8
Price/Book 1.7 1.4
Return On Equity 16.0 12.4
EPS Growth (3 Yr) -0.2% 4.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 28/02/2023)
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 28/02/2023)
Name Sector % Net Assets
Tencent Holdings, Ltd. Communication Services 9.3
Alibaba Group Holding, Ltd. Consumer Discretionary 6.7
CITIC Telecom International Holdings, Ltd. Communication Services 5.3
Tsingtao Brewery Co., Ltd. Consumer Staples 3.4
Wuliangye Yibin Co., Ltd. Consumer Staples 3.3
Ping An Insurance Group Co. of China, Ltd. Financials 3.0
China Merchants Bank Co., Ltd. Financials 3.0
Postal Savings Bank of China Co., Ltd. Financials 2.9
Yadea Group Holdings, Ltd. Consumer Discretionary 2.7
Haier Smart Home Co., Ltd. Consumer Discretionary 2.7
TOTAL 42.3

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 28/02/2023)
  • Sector Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 29.5 28.8 0.7
Communication Services 14.7 19.6 -4.9
Financials 11.0 15.7 -4.7
Consumer Staples 8.3 5.7 2.6
Industrials 6.6 5.5 1.1
Real Estate 6.3 3.5 2.8
Health Care 6.2 6.1 0.1
Materials 5.9 3.7 2.2
Information Technology 5.4 6.0 -0.6
Energy 2.1 2.6 -0.5
Utilities 0.0 2.6 -2.6
Cash and Other Assets, Less Liabilities 4.1 0.0 4.1

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

Asset Type Fund
Common Equities and ADRs 95.9
Cash and Other Assets, Less Liabilities 4.1
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 42.2 61.7 -19.5
Large Cap ($10B-$25B) 11.9 20.8 -8.9
Mid Cap ($3B-$10B) 23.8 16.1 7.7
Small Cap (under $3B) 18.1 1.3 16.8
Cash and Other Assets, Less Liabilities 4.1 0.0 4.1
China Exposure Portfolio Weight
SAR (Hong Kong) 36.1
H Shares 24.3
A Shares 14.1
Overseas Listed Companies (OL) 12.5
China-affiliated corporations (CAC) 5.3
B Shares 2.1
Unassigned 1.5
Cash and Other Assets, Less Liabilities 4.1

Definitions: SAR (Hong Kong) 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. China 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. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. Overseas Listed [OL] companies are companies that conduct business in mainland China but listed in overseas markets such as Japan, Singapore, Taiwan and the United States.

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 23/01/2023)

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 2022

For the year ending 31 December 2022, the Matthews China Dividend Fund returned -16.29%, while its benchmark, the MSCI China Index returned -21.80%. For the fourth quarter of the year, the Fund returned 16.18% versus 13.53% for the benchmark.

Market Environment:

2022 will certainly be remembered as a year of volatility. Global equity markets reacted negatively to a series of events, including the Russian invasion of Ukraine, the spike in energy costs, aggressive rate rises by the U.S. Federal Reserve and other central banks, the lockdown in Shanghai, tensions over Taiwan, and the Chinese Communist Party’s selection of a new leadership team for the next five years. 

In November, Chinese equities markets hit their lowest point of the year. However, in that same month, China relaxed many of its COVID quarantine policies, signaling a change in policy direction in managing the virus and Chinese equities reacted favorably. Then, in early December, the government announced the scrapping of its zero-COVID policy and the removal of quarantine requirements for international visitors. Meanwhile, the U.S. Public Company Accounting Oversight Board (PCAOB) announced that it was able to fully inspect and investigate the audit workbooks of PCAOB-registered accounting firms working for Chinese companies listed on U.S. securities exchanges. This greatly reduced the risk of Chinese companies being forced to delist in the U.S. On the back of these positive developments, Chinese equities, especially those listed in the offshore market, began a strong rebound.

Performance Contributors and Detractors:

During 2022, at the sector level, stock selection in industrials, consumer discretionary and information technology were the biggest contributors to performance. On the other hand, stock selection in the energy sector was the biggest detractor. In terms of market capitalization, small-cap holdings continued to outperform their large-cap peers.

Among individual holdings, Yangzijiang Shipbuilding was the top contributor. Having spun off its financial and investment business to focus on its core shipbuilding business, the company has grown its order book and last year secured the first contract for its LNG (Liquified Natural Gas) ship. It also benefited from a weakening Chinese currency and declining steel price. China Tourism Group Duty Free was the second-largest contributor as its business in Hainan Island and international airports in China may benefit significantly when Chinese tourism returns to normal. Pinduoduo, an online shopping platform, was also a top contributor as COVID-related lockdowns forced many consumers to shop online and its discount pricing also attracted more spending. However, we are very mindful that its recent push into the U.S. market might significantly reduce its short-term earnings and we will adjust our position accordingly.

Conversely, consumer internet giant Tencent was the largest detractor to performance. Given a challenging operating environment, management has been doing a good job increasing long-term investor returns by distributing its investments in companies in specie to shareholders. China Suntien Green Energy was the second-largest detractor as its gas pipeline suffered from lower utilization due to reduced industrial activity. Pharmaron Beijing, a leading Contract Research Organization (CRO), was also a large detractor. The company and the clinical trial services industry is increasingly facing risks tied to U.S.-China tensions and it may be pressed to build facilities outside China which we believe would be a drag on profitability.

Notable Portfolio Changes:

During the year we added Ping An Insurance Group. While Ping An has been hampered by its exposure to the real estate sector and China’s zero-COVID policy, we believe its competitive advantage over state-owned insurance companies still exists. In addition, we added Wharf Real Estate Investment which owns some of the largest prime shopping centers in Hong Kong. We expect that the return of mainland Chinese consumers will increase retail sales of Wharf’s tenants and thus create drivers of higher rents down the road. We also added delivery company ZTO Express as we expect that a rebound of Chinese consumption growth in 2023 will create volume growth for the industry.

We exited BOC Hong Kong as we see limited credit-demand pickup while competition for deposits is driving up funding costs. We also exited Chongqing Changan Automobile as passenger car purchase-tax benefits are starting to be reduced and competitors will cut prices, in our view. We also exited battery-component maker Zhejiang Hangke Technology as changes to electric vehicles (EV) tax credits under the Inflation Reduction Act in the U.S. and slowing sales of EVs in China have created uncertainty for some of its key customers.


We are glad to see the Chinese government finally change course on its zero-COVID policy. The uncertain regulation of internet platforms, draconian cooling measures for the property market and zero-COVID have been the three main drags on the economy. But while policies are turning on all these areas there is still work to do. Many private entrepreneurs need to be incentivized to take risk and make investments and start hiring again while Chinese consumers who have stacked additional savings during the pandemic could also be helped with spending subsidies.

After the recent strong rally in Chinese equities we believe the next phase of the rebound will be driven by strong fundamentals. During this phase, high-quality companies with strong earnings and cash flow and healthy balance sheets could start to outperform. These companies have always been our focus. With their low valuations and strong growth potential we believe our portfolio could deliver an attractive total risk-adjusted return for shareholders.


Rolling 12 Month Returns For the period ended 31/12/2022 - I (Acc)
Name 2022 2021 2020 2019 2018 Inception Date
Matthews China Dividend Fund (USD)
-16.29% 0.32% 24.30% 14.82% -10.44% 31/01/2013
MSCI China Index (USD)
-21.80% -21.64% 29.67% 23.66% -18.75%

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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