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Asia Growth

Matthews India Fund MINDX

Snapshot
  • Unconstrained all-cap strategy focused on companies with a sustainable competitive edge and pricing power, which are able to perform throughout economic cycles
  • Fundamental bottom-up approach to seek well-run entrepreneurial companies with sustainable organic growth and trustworthy managements
  • Bias toward businesses that cater to rising domestic consumer demand and to policy-independent sectors

10/31/2005

Inception Date

2.40%

YTD Return

(as of 01/19/2021)

$26.92

Price

(as of 01/19/2021)

$707.96 million

Fund Assets

(as of 12/31/2020)

Objective

Long-term capital appreciation

Strategy

Under normal circumstances, the Matthews India Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in publicly traded common stocks, preferred stocks and convertible securities of companies located in India. 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 markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. In addition, investments in a single-country fund, which is considered a non-diversified fund, may be subject to a higher degree of market risk than diversified funds because of concentration in a specific country.

The risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 10/31/2005
Fund Assets $707.96 million (12/31/2020)
Currency USD
Ticker MINDX
Cusip 577-130-859
Portfolio Turnover 24.00%
Benchmark S&P Bombay Stock Exchange 100 Index
Geographic Focus India
Fees & Expenses
Gross Expense Ratio 1.11%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews India Fund
MINDX
8.75% 21.85% 16.45% 16.45% 1.24% 6.84% 6.10% 10.45% 10/31/2005
S&P Bombay Stock Exchange 100 Index
9.46% 24.97% 13.92% 13.92% 5.14% 11.03% 4.84% 10.30%
As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews India Fund
MINDX
8.75% 21.85% 16.45% 16.45% 1.24% 6.84% 6.10% 10.45% 10/31/2005
S&P Bombay Stock Exchange 100 Index
9.46% 24.97% 13.92% 13.92% 5.14% 11.03% 4.84% 10.30%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews India Fund
MINDX
16.45% -0.88% -10.09% 35.79% -1.23% 0.90% 63.71% -5.90% 31.54% -36.48%
S&P Bombay Stock Exchange 100 Index
13.92% 8.53% -6.00% 41.88% 2.32% -6.41% 31.40% -4.70% 28.62% -36.66%

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 12/31/2020)

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 18 funds
  • 3 YEAR
  • out of 18 funds
  • 5 YEAR
  • out of 17 funds
  • 10 YEAR
  • out of 9 funds
  • 1 YEAR
  • 2nd
  • 10 out of 22 funds
  • 3 YEAR
  • 4th
  • 15 out of 18 funds
  • 5 YEAR
  • 4th
  • 15 out of 17 funds
  • 10 YEAR
  • 1st
  • 2 out of 9 funds
  • SINCE INCEPTION
  • n.a.
  • 1 out of 2 funds

Ratings agency calculation methodology

Portfolio Managers

Peeyush  Mittal, CFA photo
Peeyush Mittal, CFA

Lead Manager

Sharat  Shroff, CFA photo
Sharat Shroff, CFA

Co-Manager

Portfolio Characteristics

(as of 12/31/2020)
60
Number of Securities

Source: BNY Mellon Investment Servicing (US) Inc.

30.9x
P/E using FY1 estimates
23.9x
P/E using FY2 estimates
$46.5 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 12/31/2020)
Name Sector % Net Assets
HDFC Bank, Ltd. Financials 8.5
Reliance Industries, Ltd. Energy 7.6
Infosys, Ltd. Information Technology 5.9
ICICI Bank, Ltd. Financials 5.2
Housing Development Finance Corp., Ltd. Financials 4.4
Kotak Mahindra Bank, Ltd. Financials 4.2
Info Edge India, Ltd. Communication Services 4.0
Bajaj Finance, Ltd. Financials 3.6
Tata Consultancy Services, Ltd. Information Technology 3.4
Bandhan Bank, Ltd. Financials 3.0
TOTAL 49.8

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 12/31/2020)
  • Sector Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 38.0 35.4 2.6
Information Technology 16.4 14.1 2.3
Consumer Staples 11.9 9.8 2.1
Consumer Discretionary 8.3 7.4 0.9
Energy 7.6 11.4 -3.8
Health Care 6.4 4.7 1.7
Communication Services 6.3 2.9 3.4
Materials 3.7 7.4 -3.7
Industrials 3.7 4.1 -0.4
Utilities 0.0 2.6 -2.6
Real Estate 0.0 0.2 -0.2
Liabilities in Excess of Cash and Other Assets -2.3 0.0 -2.3

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 50.8 63.2 -12.4
Large Cap ($10B-$25B) 9.6 20.4 -10.8
Mid Cap ($3B-$10B) 21.2 15.8 5.4
Small Cap (under $3B) 20.7 0.7 20.0
Liabilities in Excess of Cash and Other Assets -2.3 0.0 -2.3

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)
12/15/2020 12/16/2020 $0.00000 $0.17084 $0.62672 $0.79756 3.1% N.A.
12/16/2019 12/17/2019 $0.00000 $0.00000 $2.80398 $2.80398 12.1% N.A.
View History

 

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.

For the quarter ending Sept. 30, 2020, the Matthews India Fund returned 18.54% (Investor Class) and 18.63% (Institutional Class), while its benchmark, the S&P Bombay Stock Exchange 100 Index returned 12.93%.

Market Environment:

Indian equities were some of the strongest regional performers across Asia in the third quarter, following similar results in the prior quarter. India’s stock markets performed well, despite the elevated daily COVID-19 infection rates. Easing of restrictions on social and commercial activities continued through the quarter albeit with intermittent and localized lockdowns in some cities. Economic activity has continued to improve through the quarter with many industries reporting near normal demand, particularly in the month of September. Rural demand has remained robust on back of another better-than-normal monsoon season for second year in row. Visibility of good harvest is buoying demand for consumer durables, which was otherwise hurt by weak urban demand after COVID related lockdowns were imposed. However, a weak fiscal position on back of lackluster tax collection has kept the government from boosting fiscal spending and has also pushed them to raise taxes on gasoline and diesel. Higher fuel prices have resulted as consequence of higher taxes. While interest rates have inched higher, core inflation remains broadly in check.

Performance Contributors and Detractors:

Stock selection among small-cap stocks, as well as a notable overweight to small caps, was a major contributor to relative performance in the quarter. In particular, small-cap health care names such as Laurus Labs and Caplin Point Laboratories generated strong gains, illustrating the evolution of India’s health care sector toward more innovative business models. Among individual securities, mid-cap financials company Bandhan Bank detracted from performance, as Indian financials continued to wrestle with the economic impacts of the COVID-19 pandemic. The company remains well capitalized and we continue to like its long-term prospects.

From a sector perspective, health care and consumer staples sectors were contributors in the quarter, driven by strong stock selection. On the other hand, the Fund’s underweight and stock selection in the materials sector was a slight detractor from relative performance. We tend to have smaller positions and engage very selectively in this highly cyclical sector.

Notable Portfolio Changes:

During the quarter, we were very active in adding new positions to the portfolio, taking advantage of market dynamics to invest in faster growing investment opportunities at relatively attractive valuations. As consumers are spending more time at home, it is our belief that greater domestic consumption spend would happen in improving personal living spaces and quality of life. As such, we initiated positions in Asian Paints and Whirlpool of India during the quarter. We also think real estate, construction activity will revive given government incentives and initiated positions in Pidilite Industries.

Meanwhile, we exited investments in Baja Consumer Care and ITC Limited where the visibility of growth was lacking and where we thought management incentives were not aligned to minority shareholders. We also exited positions that had done very well in last six to nine months but where we thought valuations left little room for error, such as Alembic Pharmaceutical.

Outlook:

Recent data on a reduction in COVID-19 cases over last few weeks leads us to believe that India’s economy may be on a path to recovery, although we can’t predict the pace or timing of recovery. In our view, the pandemic has provided a jolt that is likely to reset global supply chains across different industries, which may benefit Indian companies. We are already witnessing positive pick up in export demand for many industries, including ancillary automotive sectors, pharmaceuticals, chemicals, tiles, electronics, white goods outsourcing and textiles. Recent changes to labor laws in India are aimed at easing the legal and regulatory burden on foreign companies and will help improve ‘ease of doing business’ in India over the long term. As India’s domestic demand normalizes and export demands picks up further legs, we are hopeful the economy will likely grow in line with historical levels over longer timer periods. The month of September also saw a normalization of tax receipts, which could help improve India’s fiscal position over time if the trend continues.

As of 09/30/2020, the securities mentioned comprised the Matthews India Fund in the following percentages: Laurus Labs, Ltd., 1.5%; Caplin Point Laboratories, Ltd., 1.0%; Bandhan Bank, Ltd., 2.4%; Asian Paints, Ltd., 1.1%; Whirlpool of India, Ltd., 0.8%; Pidilite Industries, Ltd., 1.1%. The Fund held no positions in Baja Consumer Care, ITC Limited and Alembic Pharmaceutical. Current and future portfolio holdings are subject to change and risk.

Average Annual Total Returns - MINDX as of 12/31/2020
1YR 3YR 5YR 10YR Since Inception Inception Date
16.45% 1.24% 6.84% 6.10% 10.45% 10/31/2005

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. Please see the Fund's most recent month-end performance.

Fees & Expenses
Gross Expense Ratio 1.11%
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MAPTX

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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.