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 04/10/2023)



(as of 04/10/2023)


1 Day NAV Change

(as of 04/10/2023)


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 $9.43 million (31/08/2023)
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 31/08/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
-9.13% 0.06% -11.18% -6.46% -6.68% -0.13% 5.16% 4.86% 31/01/2013
MSCI China Index (USD)
-8.95% 5.00% -4.51% -7.36% -14.14% -3.75% 2.66% 1.64%
As of 30/06/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews China Dividend Fund (USD)
2.30% -11.29% -9.19% -11.66% -2.83% -1.01% 5.74% 5.16% 31/01/2013
MSCI China Index (USD)
4.02% -9.65% -5.39% -16.69% -10.13% -5.14% 3.22% 1.58%
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 30/06/2023
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Dividend Fund (USD)
-11.66% -23.15% 35.14% 2.85% 0.73% 31/01/2013
MSCI China Index (USD)
-16.69% -31.70% 27.54% 13.28% -6.55%

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 31/08/2023)
3.11% Dividend Yield

Source: FactSet Research Systems, Bloomberg, Matthews Asia

Portfolio Characteristics

(as of 31/08/2023)
Fund Benchmark
Number of Positions 34 755
Weighted Average Market Cap $90.1 billion $119.9 billion
Active Share 75.4 n.a.
P/E using FY1 estimates 10.5x 10.3x
P/E using FY2 estimates 9.0x 9.2x
Price/Cash Flow 6.4 5.7
Price/Book 1.5 1.3
Return On Equity 14.5 11.3
EPS Growth (3 Yr) 7.6% 13.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 31/08/2023)
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 31/08/2023)
Name Sector % Net Assets
Tencent Holdings, Ltd. Communication Services 9.8
Alibaba Group Holding, Ltd. Consumer Discretionary 9.6
CITIC Telecom International Holdings, Ltd. Communication Services 5.8
Ping An Insurance Group Co. of China, Ltd. Financials 3.4
Yangzijiang Shipbuilding Holdings, Ltd. Industrials 3.4
CSC Financial Co., Ltd. Financials 3.0
Tsingtao Brewery Co., Ltd. Consumer Staples 3.0
Wuliangye Yibin Co., Ltd. Consumer Staples 3.0
MINISO Group Holding, Ltd. Consumer Discretionary 2.8
Haier Smart Home Co., Ltd. Consumer Discretionary 2.7
TOTAL 46.5

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 31/08/2023)
  • Sector Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
  • China Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 29.8 31.2 -1.4
Communication Services 15.7 19.9 -4.2
Financials 12.7 14.9 -2.2
Consumer Staples 7.8 5.6 2.2
Materials 6.0 3.4 2.6
Information Technology 5.7 6.0 -0.3
Industrials 5.5 5.3 0.2
Real Estate 5.3 3.1 2.2
Health Care 3.8 5.6 -1.8
Energy 2.1 3.0 -0.9
Utilities 0.0 2.2 -2.2
Cash and Other Assets, Less Liabilities 5.7 0.0 5.7

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

Asset Type Fund
Common Equities and ADRs 94.3
Cash and Other Assets, Less Liabilities 5.7
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 39.4 64.6 -25.2
Large Cap ($10B-$25B) 13.6 17.4 -3.8
Mid Cap ($3B-$10B) 23.9 15.5 8.4
Small Cap (under $3B) 17.3 2.5 14.8
Cash and Other Assets, Less Liabilities 5.7 0.0 5.7
China Exposure Portfolio Weight
SAR (Hong Kong) 35.4
H Shares 19.0
Overseas Listed Companies (OL) 15.3
A Shares 15.0
China-affiliated corporations (CAC) 5.8
B Shares 1.9
Unassigned 1.9
Cash and Other Assets, Less Liabilities 5.7

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 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 30 June 2023

For the first half of 2023, the Matthews China Dividend Fund returned -9.19%, while its benchmark, the MSCI China Index, returned -5.39% over the same period. For the quarter ending 30 June 2023, the Fund returned -11.29%, while the benchmark returned -9.65%.

Market Environment:

Chinese equities performed sluggishly in the first half after the post-zero-COVID reopening rally fizzled out in February as consumption data in the period disappointed the market. During the second-quarter holiday festivals of Qing Ming in April, May Day and Duan Wu in June, there was surging demand for travel, and tourist numbers and hotel room rates recovered back to pre-COVID levels. However, spending during the periods remained below pre-COVID levels indicating that Chinese consumers lacked the confidence to spend.

The real estate market is also creating worries as new home sales shrank during the first six months of the year. This has generated calls for the government to further relax the cooling measures it put in place toward the end of the sector’s almost 20-year-long boom. Chinese equities rallied a number of times in the first half on speculation the government was considering certain stimulus policies. However, we think there is limited room to ease monetary policy as the U.S. economy continues to defy the risk of recession. China’s central bank cannot cut interest rates too aggressively as that could create further depreciation pressure on an already weakened Chinese renminbi. A cheap renminbi is good for China’s exports but not for encouraging inward capital flows.  

In addition to China’s uneven recovery, the impact of geopolitical tensions was also present, as the U.S. further tightened restrictions on exports to China of key semiconductor manufacturing equipment and materials.

Performance Contributors and Detractors:

At the sector level, stock selection in IT, communication services and consumer staples were the biggest contributors to relative performance. On the other hand, our overweight and stock selection in real estate was the biggest detractor—and we are revaluating our positions and allocation in the sector. Our underweight and stock selection in financials and stock selection in industrials also detracted.  

At the holdings level, CITIC Telecom was the top performer in the first half. The Macau telecom operator has a stable local business while the returning mainland tourists provide a rebound of roaming revenue. Yadea Group was the second-best performer. We have confidence in the prospects of the electric scooter manufacturer which is developing sodium-ion battery to help solidify its market leadership position. Tencent was the third-best performer. The internet platform reported better-than-expected earnings and management has said it is confident that all its units will recover strongly in 2023. The 50% increase in its annual dividend payment also shows confidence in its financial strength. However, Tencent’s largest shareholder’s plan to further divest shares will create more volatility for the stock.

In contrast, China’s largest duty-free shopping operator China Tourism Group Duty Free, and Hainan Meilan International Airport, which also has significant exposure to duty-free shopping revenue, were among the bottom performers in the period. As Chinese tourists can now go outside the border, Hainan has lost its monopoly status in duty-free shopping. In addition, Chinese consumers are spending less on discretionary items such as cosmetics. We are evaluating the situation carefully.

Notable Portfolio Changes:

During the second quarter, we initiated a new position in the Hong Kong shares of CSC Financial, a brokerage house and investment bank more commonly known as China Securities. The firm, which is less well-known among foreign investors, has been consistently ranked among the top three domestic brokers, especially in terms of securities underwriting. We believe it will benefit from new capital market reforms and its valuation on a price-to-earnings (P/E) ratio basis and discount to its mainland-listed A-shares are very attractive.

We have exited our position in Meituan as the company is facing new competition from ByteDance and is also entering new markets such as Hong Kong. These competitive threats and new investment will make Meituan less likely to achieve near-term profitability, which was our original expectation. In addition, we also exited Hainan Meilan International Airport, as the recovery of both of its traffic and duty-free business is proving challenging.


While we share some near-term concern over the Chinese economy with many observers, such as unemployment of young people and private enterprises’ low appetite for expansion, we continue to believe the elements of the country’s economic success are still in place. And the current market valuation of Chinese equities is not reflecting an economic revival—many Chinese consumer company shares, for example, have plunged back to last October’s levels. We continue to believe therefore that holding high-quality Chinese companies has the potential to offer very attractive rewards for investors over the long term.

Rolling 12 Month Returns For the period ended 30/06/2023 - I (Acc)
Name 2023 2022 2021 2020 2019 Inception Date
Matthews China Dividend Fund (USD)
-11.66% -23.15% 35.14% 2.85% 0.73% 31/01/2013
MSCI China Index (USD)
-16.69% -31.70% 27.54% 13.28% -6.55%

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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