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Asia Growth & Income

Matthews Asia Dividend Fund MAPIX

Snapshot
  • Total return strategy seeks to access the growth of Asia Pacific with lower volatility
  • Unconstrained all-cap portfolio with a quality bias
  • Flexible approach offers participation in both growth and value markets

10/31/2006

Inception Date

2.94%

YTD Return

(as of 06/11/2021)

$23.21

Price

(as of 06/11/2021)

$5.67 billion

Fund Assets

(as of 05/31/2021)

Objective

Total return with an emphasis on providing current income.

Strategy

Under normal circumstances, the Matthews Asia Dividend Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in dividend-paying equity securities of companies located in Asia. The Fund may also invest in convertible debt and equity securities. The Fund seeks to provide a level of current income that is higher than the yield generally available in Asian equity markets over the long term.

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. There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.

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

Fund Facts
Inception Date 10/31/2006
Fund Assets $5.67 billion (05/31/2021)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 37.7%
Benchmark MSCI All Country Asia Pacific 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 1.03%
Net Expense Ratio 1.02%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 05/31/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
2.32% 1.38% 1.83% 45.39% 9.15% 11.98% 8.48% 9.82% 10/31/2006
MSCI All Country Asia Pacific Index
1.50% 1.88% 5.42% 42.07% 9.54% 13.06% 7.23% 5.94%
As of 03/31/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
-2.46% -2.03% -2.03% 58.95% 7.92% 11.31% 8.28% 9.65% 10/31/2006
MSCI All Country Asia Pacific Index
-1.03% 2.42% 2.42% 52.20% 8.49% 12.52% 7.00% 5.79%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Asia Dividend Fund
MAPIX
31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32% 11.27% 21.63% -10.02%
MSCI All Country Asia Pacific Index
20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19% 17.05% -14.92%

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 03/31/2021)

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.

Yield

(as of 03/31/2021)
0.82% 30-Day SEC Yield
0.81% 30-Day SEC Yield (excluding expense waiver)
1.99% Dividend Yield

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

Ratings

  • OVERALL
  • out of 14 funds
  • 3 YEAR
  • out of 14 funds
  • 5 YEAR
  • out of 13 funds
  • 10 YEAR
  • out of 11 funds
  • 1 YEAR
  • 1st
  • 6 out of 99 funds
  • 3 YEAR
  • 1st
  • 13 out of 93 funds
  • 5 YEAR
  • 1st
  • 4 out of 84 funds
  • 10 YEAR
  • 1st
  • 3 out of 45 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 22 funds

Ratings agency calculation methodology

Portfolio Managers

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

Robert J. Horrocks, PhD photo
Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Co-Manager

S. Joyce Li, CFA photo
S. Joyce Li, CFA

Co-Manager

Portfolio Characteristics

(as of 03/31/2021)
65
Number of Securities

Source: BNY Mellon Investment Servicing (US) Inc.

18.1x
P/E using FY1 estimates
15.8x
P/E using FY2 estimates
$77.6 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 05/31/2021)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.6
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 4.6
Tencent Holdings, Ltd. Communication Services China/Hong Kong 3.1
LG Chem, Ltd., Pfd. Materials South Korea 2.8
Breville Group, Ltd. Consumer Discretionary Australia 2.8
Pharmaron Beijing Co., Ltd. Health Care China/Hong Kong 2.6
Shenzhou International Group Holdings, Ltd. Consumer Discretionary China/Hong Kong 2.3
Lixil Corp. Industrials Japan 2.2
Link REIT Real Estate China/Hong Kong 2.2
Dai-ichi Life Holdings, Inc. Financials Japan 2.2
TOTAL 29.4

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 03/31/2021)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure

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

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

Asset Type Fund
Common Equities and ADRs 93.7
Preferred Equities 5.1
Cash and Other Assets, Less Liabilities 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)
03/24/2021 03/25/2021 $0.07939 $0.00000 $0.00000 $0.07939 0.4% N.A.
09/28/2020 09/29/2020 $0.05819 $0.00000 $0.00000 $0.05819 0.3% N.A.
06/24/2020 06/25/2020 $0.12004 $0.00000 $0.00000 $0.12004 0.7% N.A.
03/25/2020 03/26/2020 $0.04406 $0.00000 $0.00000 $0.04406 0.3% 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.

Commentary

Period ended March 31, 2021

For the quarter ending March 31, 2021, the Matthews Asia Dividend Fund returned -2.03% (Investor Class) and -2.01% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index returned 2.42%.

Market Environment:

In January and early February, North Asia equities continued to climb, leading the region with strong absolute performance. However, in the middle of February, Asia equity prices became more volatile as growth prospects and talks of U.S. stimulus led to a spike in U.S. Treasury rates. The U.S. dollar strengthened and commodity prices grinded higher causing analysts to speculate about higher inflation. Stocks associated with a cyclical recovery and value-oriented companies outperformed growth stocks. Cyclical sectors like energy, materials, real estate and financials performed well while health care and consumer stocks lagged. By the end of the quarter, Asian large caps and growth stocks suffered the most while small caps and lower quality, cyclically oriented stocks rallied the most.

The rise in longer dated bond yields helped to spark somewhat of a rotation away from the conceptual growth stocks with limited near-term earnings but much promise, and caused a bid for more classic “value” stocks including banks and commodities. 

Performance Contributors and Detractors:

During the first quarter of 2021, the Fund lagged behind the benchmark’s performance, driven mainly by sector allocation and stock selection. An underweight in Taiwan detracted from relative performance in the quarter. Additionally, our small underweight in the financials sector and small overweight in the consumer staples sector detracted from relative performance. By individual securities, the biggest performance detractor was our long-time holding Minth Group, a leading auto parts manufacturer from China. In the first quarter the market was concerned about near-term impact of global automotive semiconductor chip shortage. We believe the impact is manageable for Minth and view this as a healthy correction after its strong share performance in the second half of 2020.

By country, India, Australia and Vietnam were the top contributors to performance. By sector, financials added most to performance. Our bank and insurance holdings performed well as these interest-rate sensitive stocks responded positively to a steepening yield curve driven by an improved economic recovery and inflation expectation. Turning to individual stocks, Japan’s LIXIL Group, a global supplier of housing fixtures, gained 30% in the quarter and was among the top performers. Under the leadership of CEO Kinya Seto, the company has been refocusing on its core businesses, streamlining cost structure and improving capital allocation. We are optimistic on the company's positioning amid robust demand of home furnishings in its major markets and believe its strategic reforms will boost shareholder returns over the long run.

Notable Portfolio Changes:

With a focus on total return, we increased cyclical dividend payer exposure in the quarter, particularly in industrial and financial sectors. These companies tend to benefit from broadening economic recovery and rising inflation expectation. One addition is AGC Inc in Japan, a global producer of glass and chemical products. The company is moving away from commodity type of products towards specialty products with high technological barriers and enhanced return on invested capital, such as life science services and advanced semiconductor manufacturing materials. We believe AGC is an undervalued stock with both cyclical recovery drivers and structural growth opportunities. We exited a few holdings in the consumer staples and consumer discretionary sectors during the quarter. We view the valuation premium awarded to these companies from their earnings growth during COVID-19 pandemic makes them vulnerable for margin pressure from commodity price increase or earnings growth moderation in 2021.  These included Wuliangye Yibin, Thai Beverage, Zhongsheng Group and China Tourism Group. 

Outlook:

We remain constructive on Asian equity market for 2021, supported by a broadening economic recovery. Cyclical businesses are likely to lead the current earnings recovery phase. Meanwhile, how policymakers respond to potentially rising inflation and such policies’ impact on market liquidity conditions also warrant close monitoring. Compared with 2020 whereby dividend growth was a strong performance driver, we believe bringing portfolio exposure back to a more balanced positioning between dividend growth stocks and high-dividend-yielding stocks makes more sense in the current environment.

As of March 31, 2021, the securities mentioned comprised the Matthews Asia Dividend Fund in the following percentages: Minth Group, Ltd., 4.8%; Lixil Corp., 2.4%; and AGC, Inc., 1.0%. The Fund held no positions in Wuliangye Yibin Co., Ltd., Thai Beverage, Zhongsheng Group and China Tourism Group.  Current and future portfolio holdings are subject to change and risk.

Earnings growth is not representative of the fund’s future performance.

Average Annual Total Returns - MAPIX as of 03/31/2021
1YR 3YR 5YR 10YR Since Inception Inception Date
58.95% 7.92% 11.31% 8.28% 9.65% 10/31/2006

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 1.03%
Net Expense Ratio 1.02%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2022. Please see the Fund’s prospectus for additional details.

Yields as of 03/31/2021
30-Day SEC Yield 0.82%
30-Day SEC Yield (excluding expense waiver) 0.81%
Dividend Yield 1.99%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 03/31/2021, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. The 30-Day SEC 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.

Dividend Yield (trailing) is the weighted average sum of the dividends paid by each equity security held by the Fund over the last 12 months divided by the current price as of report date. The annualised dividend yield is for the equity-only portion of the Fund and does not reflect the actual yield an investor in the Fund would receive. There can be no guarantee that companies that the Fund invests in, and which have historically paid dividends, will continue to pay them or to pay them at the current rates in the future. A positive distribution yield does not imply positive return, and past yields are no guarantee of future yields.

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. There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.

There is no guarantee that a company will pay or continue to increase dividends. Past performance is no guarantee of future results.

 

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.