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Matthews Asia Innovators Fund
MATFX

Snapshot
  • High-conviction, concentrated equity portfolio of innovative companies in Asia
  • All-cap fundamental approach focused on companies with unique offerings that create or expand markets
  • Capitalizing on the new economy and the rising disposable income in Asia

12/27/1999

Inception Date

17.62%

YTD Return

(as of 07/18/2025)

$15.22

NAV

(as of 07/18/2025)

+0.07

1 Day NAV Change

(as of 07/18/2025)

Objective

Long-term capital appreciation

Strategy

Under normal circumstances, the Matthews Asia Innovators Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia that Matthews believes are innovators in their products, services, processes, business models, management, use of technology, or approach to creating, expanding or servicing their markets. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health.

Risks

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. Sector funds may be subject to a higher degree of market risk than diversified funds because of a concentration in a specific sector. The Fund's value may be affected by changes in the science and technology-related industries.

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

Fund Facts
Inception Date 12/27/1999
Fund Assets $286.21 million (06/30/2025)
Currency USD
Ticker MATFX
Cusip 577-130-883
Benchmark MSCI All Country Asia ex Japan Index
Geographic Focus Asia ex Japan - Consists of all countries and markets in Asia excluding Japan, but including all other developed, emerging, and frontier countries and markets in the Asian region
Fees & Expenses
Gross Expense Ratio 1.29%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 06/30/2025
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Innovators Fund - MATFX
12/27/1999
MATFX
7.35% 10.77% 12.91% 14.50% 6.19% 4.41% 8.30% 5.07%
MSCI All Country Asia ex Japan Index
6.20% 12.66% 14.79% 17.49% 9.72% 6.83% 5.76% 6.18%
As of 06/30/2025
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Innovators Fund - MATFX
12/27/1999
MATFX
7.35% 10.77% 12.91% 14.50% 6.19% 4.41% 8.30% 5.07%
MSCI All Country Asia ex Japan Index
6.20% 12.66% 14.79% 17.49% 9.72% 6.83% 5.76% 6.18%
For the years ended December 31st
Name 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Matthews Asia Innovators Fund - MATFX
MATFX
16.47% -1.77% -24.80% -13.10% 86.72% 29.60% -18.62% 52.88% -9.10% 4.48%
MSCI All Country Asia ex Japan Index (USD)
12.51% 6.34% -19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90%

MSCI AC Asia Ex Japan Index since inception value calculated from 12/31/99.

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

Assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund’s fees and expenses had not been waived. Performance differences between the Institutional class and the Investor class may arise due to differences in fees charged to each class.

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.

Growth of a Hypothetical $10,000 Investment Since Inception

(as of 06/30/2025)

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gain distributions or redemption of fund shares.

Ratings

  • OVERALL
  • out of 38 funds
  • 3 YEAR
  • out of 38 funds
  • 5 YEAR
  • out of 37 funds
  • 10 YEAR
  • out of 27 funds

Ratings agency calculation methodology

Portfolio Managers

Michael J. Oh, CFA photo
Inbok  Song photo

Portfolio Characteristics

(as of 06/30/2025)
Fund Benchmark
Number of Positions 58 1,008
Weighted Average Market Cap $204.0 billion $206.7 billion
Active Share 61.0 n.a.
P/E using FY1 estimates 20.3x 14.2x
P/E using FY2 estimates 16.4x 12.7x
Price/Cash Flow 15.3 8.9
Price/Book 3.4 1.9
Return On Equity 17.8 18.1
EPS Growth (3 Yr) 25.5% 11.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 03/31/2025)
1.00%
Alpha
1.06
Beta
101.84%
Upside Capture
99.81%
Downside Capture
-0.08
Sharpe Ratio
0.05
Information Ratio
8.71%
Tracking Error
85.04

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 06/30/2025)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 10.8
Tencent Holdings, Ltd. Communication Services China/Hong Kong 6.0
Sea, Ltd. Communication Services Singapore 5.5
Eternal, Ltd. Consumer Discretionary India 4.6
Samsung Electronics Co., Ltd. Information Technology South Korea 3.5
MakeMyTrip, Ltd. Consumer Discretionary India 3.3
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 3.0
PDD Holdings, Inc. Consumer Discretionary China/Hong Kong 2.9
SK Hynix, Inc. Information Technology South Korea 2.3
Xiaomi Corp. Class B Information Technology China/Hong Kong 2.0
TOTAL 43.9

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: BNY Mellon Investment Servicing (US) Inc.

Portfolio Breakdown (%)

(as of 06/30/2025)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 29.8 27.1 2.7
Consumer Discretionary 23.3 13.4 9.9
Communication Services 19.5 10.9 8.6
Industrials 10.7 7.7 3.0
Health Care 6.0 3.4 2.6
Financials 5.9 22.7 -16.8
Energy 1.8 3.1 -1.3
Consumer Staples 0.9 3.5 -2.6
Real Estate 0.9 2.1 -1.2
Materials 0.0 3.6 -3.6
Utilities 0.0 2.4 -2.4
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

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

Country Fund Benchmark Difference
China/Hong Kong 39.7 37.1 2.6
India 19.6 20.6 -1.0
Taiwan 17.4 21.4 -4.0
South Korea 13.9 12.2 1.7
Singapore 7.5 4.2 3.3
Vietnam 0.7 0.0 0.7
Malaysia 0.0 1.5 -1.5
Indonesia 0.0 1.3 -1.3
Thailand 0.0 1.1 -1.1
Philippines 0.0 0.5 -0.5
Macau 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

Not all countries are included in the benchmark index(es).

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 71.5 66.6 4.9
Large Cap ($10B-$25B) 17.1 21.4 -4.3
Mid Cap ($3B-$10B) 10.2 11.9 -1.7
Small Cap (under $3B) 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 1.2 0.0 1.2

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.

Distributions

Record Date Ex, Pay and
Reinvest Date
Ordinary
Income
Short Term
Capital Gains
Long Term
Capital Gains
Total Distributions
Per Share
% of NAV Nondividend Distribution (Return of Capital)
12/13/2023 12/14/2023 $0.00018 $0.00000 $0.00000 $0.00018 0.0% N.A.
12/13/2022 12/14/2022 $0.00000 $0.00000 $3.00231 $3.00231 20.4% N.A.
12/14/2021 12/15/2021 $0.00000 $1.10849 $3.22827 $4.33676 18.4% N.A.
12/15/2020 12/16/2020 $0.00000 $0.13545 $0.31069 $0.44614 1.8% N.A.
12/16/2019 12/17/2019 $0.00000 $0.00000 $0.04272 $0.04272 0.3% N.A.

 

There is no guarantee that the Fund will pay or continue to pay distributions. 

Past performance is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost.

Commentary

Period ended June 30, 2025

Market Environment

  • The region’s markets had a positive quarter as concerns over U.S. tariffs eased amid potential trade deals while growth in the artificial intelligence (AI) supply chain remained strong. A temporarily weakened U.S. dollar, caused by concerns over U.S. trade policy and debt levels, also provided a tailwind. The region overall gained 12.5%.
  • South Korea was the top performing market in the region, buoyed by the election of President Lee Jae Myung who is seen as a progressive and market friendly leader. India’s performance improved as the central bank cut rates to try and boost consumer spending while in China, performance was impacted by a tit-for-tat escalation of tariffs with the U.S.
  • Markets in Southeast Asia were affected by domestic political issues and concerns over U.S. tariffs. A major source of uncertainty in the period was the Israel-Iran conflict and the implications it may have for the wider region and global economy.

Contributors and Detractors

  • For the quarter ended June 30, 2025, the Matthews Asia Innovators Fund returned 10.77%, (Investor Class) and 10.81% (Institutional Class) while its benchmark, the MSCI All Country Asia ex Japan Index, returned 12.66% over the same period.
  • On a country basis, the top three contributors to relative performance were India and Singapore due to stock selection and Thailand due to zero allocation. The top three detractors were China/Hong Kong due to stock selection, Taiwan due to an underweight allocation and South Korea due to stock selection.
  • On a sector basis, the top three contributors to relative performance were communication services and health care due to stock selection and consumer staples due to an underweight allocation. The top three detractors were consumer discretionary due to an overweight allocation, industrials and financials due to stock selection.
  • The largest contributors to absolute performance included Taiwan Semiconductor Manufacturing Co. (TMSC), a globally leading chipmaker, Eternal Ltd., operator of Zomato, a leading Indian online restaurant booking and food delivery company, and Innovent Biologics, a Chinese biopharmaceutical company. The top three detractors included Alibaba Group, the largest e-commerce platform company in China, Pinduoduo (PDD), one of China’s largest e-commerce platforms that started its businesses with a focus on lower-tier city, price sensitive consumers, and Meituan, China’s largest food delivery service and internet platform company.

Outlook

  • With President Trump’s July 9 tariff deadline for reaching trade agreements approaching, more market volatility is to be expected. However, we believe the peak fear of tariffs has passed—barring any significant escalation in duties on countries where agreements are not reached.
  • We also think that earnings growth improvements in Asia could potentially offer significant upside pressure to investment returns. During the quarter, a large proportion of returns were tied to increasing valuations and currency movements with limited impact from improving financial results.
  • A potential loosening of U.S. monetary policy and a weaker dollar would also be favorable for the region especially those economies exposed to global trade. In China, while a meaningful pickup in property and general consumption has yet to be seen, we anticipate some progress later in the year and into 2026.
  • As summer headwinds ease, in terms of seasonality Middle East conflicts, trade and the U.S. economy, we believe there will be greater clarity on the prospects for global markets. This should allow the drivers of Asian markets—earnings recovery, diversification, a weaker dollar, and cheap valuations—to gain traction in our view.

View the Fund's Top 10 holdings as of June 30, 2025. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MATFX as of 06/30/2025
1YR 3YR 5YR 10YR Since Inception Inception Date
14.50% 6.19% 4.41% 8.30% 5.07% 12/27/1999

All performance quoted is past performance and is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund's fees and expenses had not been waived. For the Fund's most recent month-end performance visit matthewsasia.com

Fees & Expenses
Gross Expense Ratio 1.29%

Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. Sector funds may be subject to a higher degree of market risk than diversified funds because of a concentration in a specific sector. The Fund's value may be affected by changes in the science and technology-related industries.

 

Visit our Glossary of Terms page for definitions and additional information.

Index Definitions

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. Neither the funds nor the Investment Advisor accept any liability for losses either direct or consequential caused by the use of this information.

The views and opinions in the commentary were as of the report date, subject to change and may not reflect 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.