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income investing

Diversified income strategies with growth potential

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The global market environment is changing

Protectionism

geopolitical

Geopolitical tension

Rising interest rates

During times of uncertainty, investors should look again at their approach to generating income. A total return approach can potentially deliver both sustainable income as well as benefit from growth opportunities.

Asia can provide solutions that diversify an investor’s income stream while remaining exposed to quality companies and their growth potential.

At Matthews Asia, we offer three income approaches that fit the current environment:

Matthews Asia ex Japan Dividend Fund

Capture the region's potential with an unconstrained approach.

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Matthews China Dividend Fund

Discover a lower volatility approach to China.

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Matthews Asia Credit Opportunities Fund

Diversify and enhance the yield of your portfolio.

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Now is the time to find new sources of sustainable income

Historical returns for Asia highlight the benefits of taking a total return approach with investors able to capture new sources of sustainable income and the potential for capital appreciation.

U.S.EuropeAsia ex-JapanChina2 00%1 50%1 00%5 0%0%- 50%P rice returnD ividend return U.S.EuropeAsia ex-JapanChina2 0 0 %1 5 0%1 0 0 %5 0%0%- 5 0%D i v i d e n d r e t u r nP r i c e r e t u r n ChinaAsia ex-JapanEuropeU.S.2 0 0 %1 5 0%1 0 0 %5 0%0%- 5 0%P r i c e r e t u r nD i v i d e n d r e t u r n

Breakdown of total returns
(MSCI Indices, 2000-2016)

Local currency returns. Time period: 31 December 1999-31 December 2016.  
Past performance is no guarantee of future results.  
It is not possible to invest directly in an index.  
*Source: MSCI Barra, Matthews Asia

Relative to developed markets, the region also offers attractive dividend yields and high levels of dividend growth

0.0%

Asia

0.0%

China

0.0%

US

0.0%

Europe

Dividend yield

0.0%

Asia

0.0%

China

0.0%

US

0.0%

Europe

Dividend growth
(2002-2016)

*Trailing dividend yield estimates for 2016, as of 31/03/17, based on Factset Aggregates.  
**Compound annual growth rate (CAGR) based on index constituents of Europe (Bloomberg European 500 Index), Asia Pacific (MSCI AC Asia Pacific Index), U.S. (S&P 500 Index), China (MSCI China Index), as of 31/12/02, excluding those that are no longer in existence as of calendar year 2016.  
It is not possible to invest directly in an index.  
*Sources: FactSet Research Systems. MSCI, S&P, Bloomberg

Fixed income investors can also benefit from diversification and attractive yields in Asia relative to traditional bond markets

5.5%

US
High Yield

2.2%

US
10yr

2.9%

European
High Yield

0.3%

Germany
10yr

5.8%

Asia US$
High Yield

US High Yield

0.0%

Asia US$ High Yield

0.0%

European High Yield

0.0%

US 10yr

0.0%

Germany 10yr

0.0%

Fixed income rates

Past performance is no guarantee of future results. It is not possible to invest directly in an index.  
Note: Asia US$ High Yield (BofAML Asian Dollar High Yield Index), U.S. High Yield (BofAML High Yield Master II Index),  
Euro High Yield (BofAML European Currency High Yield Index (HP00)).  
*Sources: Bloomberg; Merrill Lynch, Pierce, Fenner & Smith Incorporated (“BofAML”), used with permission. BofAML permits use of the BofAML indices and related data on an “as is” basis, makes no warranties regarding same, does not guarantee the suitability, quality, accuracy, timeliness, and/or completeness of the BofAML indices or any data included in, related to, or derived therefrom, assumes no liability in connection with the use of the foregoing, and does not sponsor, endorse, or recommend Matthews Asia, or any of its products or services.  
Data as of 31 May 2017

See more Income Opportunities with Matthews Asia

Matthews Asia has been invested in income-generating equity and fixed income securities for over 25 years

25 years investing in Asia

Matthews Asia has been invested in income-generating equity and fixed income securities for over 25 years.

Focused solely on investing in Asia

Independent and privately owned, Matthews Asia has a 40+ person investment team dedicated to investing in Asia.*

* Investment team members include employees of Matthews Asia and its subsidiaries.

As specialists, we seek quality businesses across Asia

As specialists, we seek quality businesses across the market-cap spectrum in frontier, emerging and developed Asia.

Clear investment philosophy

We believe that a long-term investment horizon and benchmark-agnostic approach provides value creation opportunities for our clients. This is reflected in portfolios with low turnover and high active share.

Further reading

Where are Asia's income opportunities in a rising rate environment?

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