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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

0.47%

YTD Return

(as of 10/26/2021)

$22.56

Price

(as of 10/26/2021)

$5.43 billion

Fund Assets

(as of 09/30/2021)

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 $5.43 billion (09/30/2021)
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 09/30/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
-1.10% -2.90% -0.42% 14.04% 9.40% 9.63% 9.75% 9.43% 10/31/2006
MSCI All Country Asia Pacific Index
-1.78% -4.30% 0.62% 18.61% 8.82% 9.96% 8.59% 5.47%
As of 09/30/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
-1.10% -2.90% -0.42% 14.04% 9.40% 9.63% 9.75% 9.43% 10/31/2006
MSCI All Country Asia Pacific Index
-1.78% -4.30% 0.62% 18.61% 8.82% 9.96% 8.59% 5.47%
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 09/30/2021)

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 09/30/2021)
0.54% 30-Day SEC Yield
0.53% 30-Day SEC Yield (excluding expense waiver)
1.75% Dividend Yield

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

Ratings

  • OVERALL
  • out of 10 funds
  • 3 YEAR
  • out of 10 funds
  • 5 YEAR
  • out of 10 funds
  • 1 YEAR
  • 4th
  • 97 out of 100 funds
  • 3 YEAR
  • 1st
  • 11 out of 97 funds
  • 5 YEAR
  • 1st
  • 8 out of 87 funds
  • 10 YEAR
  • 1st
  • 3 out of 47 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 23 funds

Ratings agency calculation methodology

Portfolio Managers

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

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

Lead Manager

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

Co-Manager

Portfolio Characteristics

(as of 09/30/2021)
Fund Benchmark
Number of Positions 63 1,555
Weighted Average Market Cap $70.2 billion $106.6 billion
Active Share 89.0 n.a.
P/E using FY1 estimates 18.2x 14.5x
P/E using FY2 estimates 16.1x 13.8x
Price/Cash Flow 14.2 10.4
Price/Book 2.4 1.8
Return On Equity 14.5 12.2
EPS Growth (3 Yr) 6.9% -2.5%

Sources: BNY Mellon Investment Servicing (US) Inc., Factset Research Systems, Inc., Zephyr StyleADVISOR, Matthews Asia

Top 10 Holdings

(as of 09/30/2021)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.6
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 3.9
Pharmaron Beijing Co., Ltd. Health Care China/Hong Kong 3.1
Breville Group, Ltd. Consumer Discretionary Australia 2.8
MISUMI Group, Inc. Industrials Japan 2.7
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.7
KATITAS Co., Ltd. Real Estate Japan 2.7
LG Chem, Ltd., Pfd. Materials South Korea 2.7
Minda Industries, Ltd. Consumer Discretionary India 2.5
Lixil Corp. Industrials Japan 2.5
TOTAL 30.2

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 09/30/2021)
  • 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 92.8
Preferred Equities 4.3
Cash and Other Assets, Less Liabilities 2.9

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)
09/27/2021 09/28/2021 $0.05045 $0.00000 $0.00000 $0.05045 0.2% N.A.
06/28/2021 06/29/2021 $0.04399 $0.00000 $0.00000 $0.04399 0.2% N.A.
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 September 30, 2021

For the quarter ending September 30, 2021, the Matthews Asia Dividend Fund returned -2.90% (Investor Class) and -2.86% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -4.30% over the same period.

Market Environment:

The third quarter of 2021 was broadly negative for Asia equities, with notable exceptions India and Japan. Indian economic data and fund inflows recovered on the back of improving trends in COVID-related cases, although the recent surge in oil prices could become a headwind for India’s currency and current accounts. Japan equities bounced back strongly during the quarter, as the country’s vaccination ratio continued to climb amid steady decreases in COVID-related cases. The ruling Liberal Democratic Party’s election of its new leader suggests no major shifts in Japan’s macro or monetary policy. During the quarter, China was the worst performer  due to ongoing regulatory concerns and China Evergrande Group-related fears. Consumption slowed in recent months on weak consumer sentiment and government measures to control COVID cases. Recent power shortages posed additional risk for near-term GDP growth. Regional sector performance was divergent in the quarter. Cyclical sectors including energy and materials outperformed while consumer discretionary and communication services sectors were weak.

Performance Contributors and Detractors:

During the third quarter of 2021, stock selection in Australia and Japan contributed the most to the Fund’s relative performance. During a pandemic-related market sell-off last year, we initiated a few positions in strategically unique assets in Australia, including an airport operator and a leading English language testing and college placement service provider. These holdings performed strongly in the third quarter as a result of the market refocusing on the underlying value of these businesses. In Japan, the portfolio benefited from strong earnings reported by a few of our dividend growth holdings that  demonstrated their ability in navigating complex supply chain challenges and dynamic domestic pandemic situations. On the other hand, our underweight position in India detracted the most from relative performance, as India was the top performing market in the quarter.

From a sector perspective, stock selection in industrials and communication services contributed the most to relative performance. Our holdings in the industrials sector were leaders in their specific fields and benefited from the global recovery of industrial activities. Our positions in telecom operators in the Philippines and Bangladesh performed strongly in the quarter. Meanwhile, stock selection in health care and information technology were the largest drag to relative performance.

With respect to individual securities, Globe Telecom in the Philippines was the top contributor to absolute performance in the third quarter. Globe Telecom has a good track record of delivering solid cash flow from its core telecom business, and recently investors have become optimistic on the growth and profitability prospect of the company’s fintech business Mynt. Another holding among top contributors was Sydney Airport. In early July the company received a takeover bid from a consortium valuing the company at a 42% premium to its previous close price. We took profit and exited the position. On the other hand, the two largest detractors to absolute performance were Chinese holdings, Minth Group, a leading auto parts manufacturer, and Jinxin Fertility Group, a hospital services provider specializing in assisted reproductive services in China. Minth Group was affected by continued semiconductor shortages among its customers, an issue that we believe will get resolved over the next few quarters. Jinxin Fertility was hurt by negative sentiment on the Chinese health care sector on the back of government policy concerns during the quarter. In our opinion, Jinxin is not impacted by the recent government pricing policies and the company’s strong demand growth is aligned with the government’s goal to improve the birth rate in China.

Notable Portfolio Changes:

During the third quarter, we initiated a position in KakaoBank Corp., an internet bank in South Korea. This fast-growing bank leverages on the successful “Kakao ecosystem” that its parent company, Kakao Corp., has created within the country to deliver banking services to customers with a low-cost business model. The company has been profitable since 2019 and has the potential to further disrupt the industry and gain market share in the future, in our view. Despite KakaoBank’s substantial growth opportunities, we believe the company is well positioned to initiate its first dividend payment post-listing due to its strong cash flow generation and the high ownership retained by its parent company.

To fund these new positions, we exited several holdings, including names like TDK Corporation on a slower growth profile and Sydney Airport on value realization on takeover bids.

Outlook: 

The structural consumption growth trend in Asia faces a temporary slowdown in 2021, caused by weak consumer sentiment and government measures seeking to stop the spread of COVID-19 variants in the region. Meanwhile, the ongoing manufacturing and industrial up-cycles moderated recently on challenges from raw material cost inflation and supply chain shortages. We believe that after the recent market pullback, Asia’s equity markets have largely priced in rising inflation expectations and near-term growth moderation.

Looking ahead, we are constructive on Asian equities, anticipating a positive inflection point in monetary and fiscal policies in China to support its domestic economy. Recent progress on COVID-19 vaccination rollout across the region is also encouraging. Compared to major global markets, Asian equities, as represented by the MSCI All Country Asia Pacific Index, trade at a reasonable valuation level of 14.4x forward P/E. Heading into the last quarter of 2021 and beyond, we believe that high quality businesses with sustainable cash flows are likely to lead, while resumption of structural growth drivers such as domestic consumption and industrial upgrades could return to drive further earnings growth. A balanced portfolio exposure between dividend growth stocks and high-dividend-yielding stocks is the best way to capture opportunities in the current environment in our opinion.

 

As of September 30, 2021, the securities mentioned comprised the Matthews Asia Dividend Fund in the following percentages: Globe Telecom, Inc., 1.9%; Minth Group, Ltd., 3.9%; Jinxin Fertility Group, Ltd., 1.2%; and KakaoBank Corp. 0.9%. The Fund held no positions in China Evergrande Group, TDK Corporation, Mynt, Kakao Corp. and Sydney Airport.

Current and future portfolio holdings are subject to change and risk.

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

There is no guarantee that a company will pay or continue to increase dividends. Dividend growers represent dividend-paying companies that can grow their dividend payouts over time. Dividend payers represent dividend-paying companies that pay steady, consistent dividends over time.

 

Average Annual Total Returns - MAPIX as of 09/30/2021
1YR 3YR 5YR 10YR Since Inception Inception Date
14.04% 9.40% 9.63% 9.75% 9.43% 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 09/30/2021
30-Day SEC Yield 0.54%
30-Day SEC Yield (excluding expense waiver) 0.53%
Dividend Yield 1.75%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2021, 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.