Asia Fixed Income

Matthews Asia Credit Opportunities Fund MCRDX

  • Bottom-up Asia credit strategy, with a focus on risk-adjusted returns
  • Invest primarily in USD-denominated high yield Asian bonds
  • Flexibility to invest across the spectrum of credit quality and issuers’ capital structure


Inception Date


YTD Return

(as of 01/15/2021)



(as of 01/15/2021)

$91.11 million

Fund Assets

(as of 12/31/2020)


Seeks total return over the long term.


Under normal circumstances, the Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in debt and debt-related instruments issued by companies as well as governments, quasi-governmental entities, and supranational institutions in Asia. Debt and debt-related instruments typically include bonds, debentures, bills, securitized instruments (which are vehicles backed by pools of assets such as loans or other receivables), notes, certificates of deposit and other bank obligations, bank loans, senior secured bank debt, convertible debt securities, credit-linked notes, inflation-linked instruments, repurchase agreements, payment-in-kind securities and derivative instruments with fixed income characteristics.


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. Fixed income investments are subject to additional risks, including, but not limited to, interest rate, credit and inflation risks. 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.

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

Fund Facts
Inception Date 04/29/2016
Fund Assets $91.11 million (12/31/2020)
Currency USD
Ticker MCRDX
Cusip 577-130-677
Portfolio Turnover 81.08%
Benchmark J.P. Morgan Asia Credit Index
Geographic Focus Asia - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region
Fees & Expenses
Gross Expense Ratio 1.24%
Net Expense Ratio 1.12%


  • 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 Asia Credit Opportunities Fund
1.22% 3.61% 1.80% 1.80% 3.86% n.a. n.a. 5.16% 04/29/2016
J.P. Morgan Asia Credit Index
0.64% 1.82% 6.33% 6.33% 5.52% n.a. n.a. 5.07%
As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Credit Opportunities Fund
1.22% 3.61% 1.80% 1.80% 3.86% n.a. n.a. 5.16% 04/29/2016
J.P. Morgan Asia Credit Index
0.64% 1.82% 6.33% 6.33% 5.52% n.a. n.a. 5.07%
For the years ended December 31st
Name 2020 2019 2018 2017
Matthews Asia Credit Opportunities Fund
1.80% 13.34% -2.88% 7.86%
J.P. Morgan Asia Credit Index
6.33% 11.35% -0.77% 5.77%

Source: BNY Mellon Investment Servicing (US) Inc., Index data from J.P. Morgan. 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.


(as of 12/31/2020)
7.36% Yield to Worst
6.13% 30-Day Yield
6.21% 30-Day Yield (excluding expense waiver)

30-Day Yield Source: BNY Mellon Investment Servicing (US) Inc.


  • out of 244 funds
  • 3 YEAR
  • out of 244 funds
  • 1 YEAR
  • 3rd
  • 85 out of 124 funds
  • 3 YEAR
  • 2nd
  • 53 out of 113 funds
  • 2nd
  • 30 out of 108 funds

Ratings agency calculation methodology

Portfolio Managers

Teresa  Kong, CFA photo
Teresa Kong, CFA

Lead Manager

Satya  Patel photo
Satya Patel

Lead Manager

Portfolio Characteristics

(as of 12/31/2020)
Modified Duration
Number of Positions

Source: BNY Mellon Investment Servicing (US) Inc.

Top 10 Positions

(as of 12/31/2020)
Name Sector Currency % Net Assets
Network i2i, Ltd., 5.650%, 04/15/2068 Communication Services U.S. Dollar 6.1
Indika Energy Capital III Pte, Ltd., 5.875%, 11/09/2024 Energy U.S. Dollar 5.6
Viet Nam Debt & Asset Trading Corp., 1.000%, 10/10/2025 Financials U.S. Dollar 5.4
Honghua Group, Ltd., 6.375%, 08/01/2022 Energy U.S. Dollar 5.2
Sino-Ocean Land Treasure III, Ltd., 4.900%, 03/21/2068 Real Estate U.S. Dollar 5.2
King Talent Management, Ltd., 5.600%, 06/04/2068 Financials U.S. Dollar 5.0
Tata Motors, Ltd., 5.875%, 05/20/2025 Consumer Discretionary U.S. Dollar 4.8
Luye Pharma Group, Ltd., Cnv., 1.500%, 07/09/2024 Health Care U.S. Dollar 4.3
Poseidon Finance 1, Ltd., Cnv., 0.000%, 02/01/2025 Financials U.S. Dollar 4.1
Times China Holdings, Ltd., 6.200%, 03/22/2026 Real Estate U.S. Dollar 3.9
TOTAL 49.6

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
  • Country Allocation
  • Currency Allocation
  • Quality Distribution
  • Asset Type Breakdown
Sector Fund
Real Estate 23.9
Financials 17.0
Consumer Discretionary 16.6
Energy 13.8
Communication Services 7.8
Materials 6.5
Health Care 4.3
Foreign Government Bonds 1.5
Industrials 0.9
Cash and Other Assets, Less Liabilities 7.8

"Foreign Government Bonds" category includes supranationals.
Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.

Sector data (excluding Government Bonds) based on MSCI’s revised Global Industry Classification Standards. For more details, visit

By issuer's country of risk Fund
China/Hong Kong 44.0
Indonesia 17.3
India 14.2
Vietnam 6.8
Switzerland 3.1
Australia 2.6
Philippines 2.5
South Korea 1.7
Cash and Other Assets, Less Liabilities 7.8

Not all countries are included in the benchmark index. Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.
Supranational is an international organization in which member states transcend national boundaries, (ex. IMF).

Currency Fund Contribution To Duration
U.S. Dollar 100.0 2.9

Cash and other assets may include forward currency exchange contracts and certain derivative instruments that have been marked-to-market.

Quality Distribution Fund
BBB 2.6
BBB- 3.1
BB+ 2.9
BB 15.4
BB- 17.0
B+ 17.2
B 5.2
B- 1.6
CCC+ 3.8
Not Rated 23.6
Cash and Other Assets, Less Liabilities 7.8

Credit quality is provided for the underlying bond holdings of the Fund and does not include common equities, cash and other assets and percentage values will not total 100%. Credit quality rating symbols reflect that of S&P and generally credit ratings range from AAA (highest) to D (lowest). When ratings from Moody's, S&P and Fitch are available for a bond in the Fund, the middle rating of the three is used. When two ratings are available, the lowest rating is used. When only one rating is provided, that one is used. Foreign government bonds without a specific rating are assigned the country rating provided by one of the three agencies. Securities that are not rated by any one of the three agencies are reflected as such.
Sources: FactSet Research Systems, Moody's, S&P and Fitch

Asset Type Fund
Corporate Bonds 72.4
Convertible Bonds 13.1
Government Bonds 6.8
Cash and Other Assets, Less Liabilities 7.8

Cash and Other Assets may include the mark-to-market value of forward currency exchange contracts and certain derivative instruments.

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.


Record Date Ex, Pay and
Reinvest Date
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 $0.05833 $0.02672 $0.00000 $0.08505 0.8% N.A.
11/18/2020 11/19/2020 $0.04203 $0.00000 $0.00000 $0.04203 0.4% N.A.
10/26/2020 10/27/2020 $0.03420 $0.00000 $0.00000 $0.03420 0.3% N.A.
09/28/2020 09/29/2020 $0.03784 $0.00000 $0.00000 $0.03784 0.4% N.A.
08/27/2020 08/27/2020 $0.04322 $0.00000 $0.00000 $0.04322 0.4% N.A.
07/27/2020 07/28/2020 $0.03875 $0.00000 $0.00000 $0.03875 0.4% N.A.
06/24/2020 06/25/2020 $0.03634 $0.00000 $0.00000 $0.03634 0.4% N.A.
05/26/2020 05/27/2020 $0.04014 $0.00000 $0.00000 $0.04014 0.4% N.A.
04/27/2020 04/28/2020 $0.03833 $0.00000 $0.00000 $0.03833 0.4% N.A.
03/25/2020 03/26/2020 $0.03086 $0.00000 $0.00000 $0.03086 0.3% N.A.
02/26/2020 02/27/2020 $0.03930 $0.00000 $0.00000 $0.03930 0.4% N.A.
12/16/2019 12/17/2019 $0.10644 $0.03336 $0.00530 $0.14510 1.4% N.A.
09/16/2019 09/17/2019 $0.12939 $0.00000 $0.00000 $0.12939 N.A. N.A.
06/17/2019 06/18/2019 $0.10268 $0.00000 $0.00000 $0.10268 N.A. N.A.
03/15/2019 03/18/2019 $0.09855 $0.00000 $0.00000 $0.09855 N.A. 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 September 30, 2020, the Matthews Asia Credit Opportunities Fund returned 3.14% (Investor Class) and 3.20% (Institutional Class) while its benchmark, the JP Morgan Asia Credit Index (JACI) returned 2.12%.

Market Environment:

The third quarter was characterized initially by optimism and improvement in market sentiment before market conditions deteriorated near the end of the quarter. The average spread of JACI was 18 basis points (0.18%) tighter on the quarter. The average spread of the high yield portion of JACI was 34 basis points (0.34%) tighter in the quarter.

A number of factors whip-sawed risk sentiment. Throughout the quarter, news flow pointed to progress in the race to manufacture an effective COVID-19 vaccine. Beyond the potential sale of TikTok’s U.S. operations, there was no significant deterioration in U.S. – China relations or either country’s commitment to the Phase One Trade Deal. Toward the end of the quarter, sentiment shifted, with daily confirmed COVID cases rising in the U.S. and Europe and a lack of progress on a second round of stimulus in the U.S. With the U.S. election quickly approaching, markets focused on the uncertainty, in particular regarding the accuracy of final vote count as well as a potential messy transfer of power.

Within Asian credit, China was the single largest contributor to positive performance, given its large index weight and also positive performance. During the third quarter, one of the most significant negative news for Chinese companies came from the large property developer Evergrande. A letter circulated suggesting the company was seeking government support and considering a restructuring. Even though the company denied the authenticity of the letter, it was enough to drive credit spreads wider across Asia. We believe Evergrande’s issues to be idiosyncratic and not an indication of the overall health of Chinese developers. We have avoided companies such as Evergrande on credit concerns and generally prefer higher quality Chinese property names.

Performance Contributors and Detractors:

Long-duration investment-grade names, such as Asahan Aluminum Persero (InAlum), Syngenta, and China Jinmao perpetual bonds contributed to performance during the quarter as investors reached for yield without straying too far from credit quality. Across the board, high yield companies generally did well and had positive performance in the quarter. The top returning sector continued to be Chinese property developers, with China Jinmao and Dalian Wanda as the two biggest contributors to outperformance.

The top detractors were perpetual bonds of Philippines fast-food conglomerate Jollibee, convertible bonds of Baozun, a Chinese e-commerce solutions company, and PB International, an Indonesian textile manufacturer. Jollibee, as a restaurant business, has had an uneven recovery from COVID. However, we like the long-term operating track record of the company and therefore believes it has long-term upside potential. Pan Brothers faces market scrutiny due to its upcoming bank loan refinancing needs, but we feel comfortable holding the bond due to the continued strength in operations, which have been buoyed by a shift towards manufacturing of personal protective equipment.

Notable Portfolio Changes:

During the third quarter, we exited Indonesia InAlum and Cikarang Listrindo, both Indonesia companies. These bonds had recovered quite well, and we felt there was limited remaining upside. We also exited the contingent convertible securities of HSBC and Standard Chartered.

We added bonds issued by Tata Motors after the company committed to significantly reducing its outstanding debt in the next few years. We also added bonds of Poseidon Finance, a financing vehicle of China Shipbuilding Investment Corporation that are exchangeable into shares of Postal Savings Bank in China. While Postal Savings Bank equity will continue to come under pressure, the credit quality of China Shipbuilding Investment Corporation, as a wholly owned central government enterprise, is that of a quasi-sovereign. The yield on the bonds reflected the challenging outlook for the underlying equity, but compensates well for the minimal default risk.


Looking ahead, there are numerous uncertainties on the horizon in the coming quarters. With voting already underway in the United States, the November election will give markets a direction after a rollercoaster year. Even with the election settled, the true extent of the coronavirus spread in U.S. and emerging markets remains uncertain, with an imminent vaccine more of a hope than a foregone conclusion at this point.

As markets continue to assess the uncertainties mentioned above, we expect idiosyncratic risks and company specific risks to be the dominant concern. We believe the market will focus on determining the degree to which a sector and company is impacted by the pandemic. As a result, dispersion between geographical regions and between different credit qualities will in our view increase going forward. Given the high macro risks, we continue to favor companies with good credit quality and low liquidity risks, which should give them the best buffers to withstand macro uncertainties.

Looking still further ahead, we note that the importance of geopolitics will not wane once the U.S. election is decided, particularly between the U.S. and China, where trade and intellectual property disputes can be expected to continue for years to come. In addition to U.S. – China relations, we are increasingly worried about uncertainties in U.S. election vote counting as well as implications of a potential disruptive power transfer in U.S. Although this is a small probability tail risk, we believe it deserves further attention.

As of September 30, 2020, the securities mentioned comprised the Matthews Asia Credit Opportunities Fund in the following percentages: Syngenta Finance N.V., 5.676%, 04/24/2048, 2.0%: Syngenta Finance N.V., 5.182%, 04/24/2028, 1.7%; Syngenta Finance N.V., 4.892%, 04/24/2025, 0.2%; Franshion Brilliant, Ltd., 5.750%, 07/17/2067, 4.9%; Wanda Group Overseas, Ltd., 7.500%, 07/24/2022, 2.7%; Wanda Properties International Co., Ltd., 7.250%, 01/29/2024, 2.6%; Jollibee Worldwide Pte, Ltd., 3.900%, 07/23/2068, 1.5%; Baozun, Inc., Cnv., 1.625%, 05/01/2024, 2.8%; PB International BV, 7.625%, 01/26/2022, 4.9% (Pan Brothers); Tata Motors, Ltd., 5.875%, 05/20/2025, 3.3%; Poseidon Finance 1, Ltd., Cnv., 0.000%, 02/01/2025, 4.0%. The Fund held no positions in Evergrande; PT Indonesia Asahan Aluminium Perser; Listrindo Capital BV; HSBC Holdings PLC; Standard Chartered PLC. Current and future portfolio holdings are subject to change and risk.


Average Annual Total Returns - MCRDX as of 12/31/2020
1YR 3YR 5YR 10YR Since Inception Inception Date
1.80% 3.86% N.A. N.A. 5.16% 04/29/2016

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 1.24%
Net Expense Ratio 1.12%

Matthews has contractually agreed (i) to waive fees and reimburse expenses to the extent needed to limit Total Annual Fund Operating Expenses (excluding Rule 12b-1 fees, taxes, interest, brokerage commissions, short sale dividend expenses, expenses incurred in connection with any merger or reorganization or extraordinary expenses such as litigation) of the Institutional Class to 0.90% first by waiving class specific expenses (e.g., shareholder service fees specific to a particular class) of the Institutional Class and then, to the extent necessary, by waiving non-class specific expenses (e.g., custody fees) of the Institutional Class, and (ii) if any Fund-wide expenses (i.e., expenses that apply to both the Institutional Class and the Investor Class) are waived for the Institutional Class to maintain the 0.90% expense limitation, to waive an equal amount (in annual percentage terms) of those same expenses for the Investor Class. The Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement for the Investor Class may vary from year to year and will in some years exceed 0.90%. Any amount waived with respect to the Fund pursuant to this agreement is not subject to recoupment. This agreement will remain in place until April 30, 2021 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

Yields as of 12/31/2020
Yield to Worst 7.36%
30-Day Yield 6.13%
30-Day Yield (excluding expense waiver) 6.21%

The 30-Day Yield represents net investment income earned by the Fund over the 30-day period ended 12/31/2020, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. The 30-Day Yield should be regarded as an estimate of the Fund’s rate of investment income, and it may not equal the Fund’s actual income distribution rate. Source: BNY Mellon Investment Servicing (US) Inc.

Yield to worst is the lowest potential yield a bond can receive without actually defaulting – is for the underlying bond-only portion of the portfolio, and as of May 2020, is calculated by making worst-case scenario assumptions using the weighted averages of the underlying security-level yields, weighted according to each security’s market value. It does not represent or predict the yield on any fund. Source: FactSet Research Systems 

Related Funds


Matthews Asia Total Return Bond Fund


Matthews Asian Growth and Income Fund


Matthews Emerging Markets Equity Fund


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.