Asia Growth & Income

Matthews Asian Growth and Income Fund MACSX

  • Seeks upside participation while aiming to provide some downside protection in Asia ex Japan
  • Utilize income-paying equities and convertible bonds to help mitigate downside risk and volatility
  • Offers a relatively stable means of participating in Asia’s long-term growth


Inception Date


YTD Return

(as of 01/15/2021)



(as of 01/15/2021)

$1.50 billion

Fund Assets

(as of 12/31/2020)


Long-term capital appreciation with some current income.


Under normal circumstances, the Matthews Asian Growth and Income 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 common stock, preferred stock and other equity securities, and convertible securities as well as fixed-income securities, of any duration or quality, of companies located in Asia. The Fund attempts to offer investors a relatively stable means of participating in a portion of the Asian region’s growth prospects, while providing some downside protection, in comparison to a portfolio that invests purely in common stocks. The strategy of owning convertible bonds and dividend-paying equities is designed to help the Fund to meet its investment objective while helping to reduce the volatility of its portfolio.


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.

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

Fund Facts
Inception Date 09/12/1994
Fund Assets $1.50 billion (12/31/2020)
Currency USD
Ticker MACSX
Cusip 577-130-206
Portfolio Turnover 21.89%
Benchmark MSCI All Country Asia ex Japan 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 1.08%


  • Monthly
  • Quarterly
  • Calendar Year
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund
5.99% 15.52% 16.00% 16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994
MSCI All Country Asia ex Japan Index
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 5.40%
As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund
5.99% 15.52% 16.00% 16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994
MSCI All Country Asia ex Japan Index
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 5.40%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Asian Growth and Income Fund
16.00% 17.26% -10.96% 21.85% 1.34% -4.50% -0.65% 4.83% 26.90% -10.62%
MSCI All Country Asia ex Japan Index
25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34% 22.70% -17.07%

MSCI AC Asia ex Japan Index since inception value calculated from 8/31/94.

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.


(as of 12/31/2020)
1.37% 30-Day Yield
2.55% Dividend Yield

Dividend Yield (trailing) Source: FactSet Research Systems, Bloomberg, Matthews
30-Day Yield Source: BNY Mellon Investment Servicing (US) Inc.


  • out of 58 funds
  • 3 YEAR
  • out of 58 funds
  • 5 YEAR
  • out of 55 funds
  • 10 YEAR
  • out of 31 funds
  • 1 YEAR
  • 3rd
  • 24 out of 33 funds
  • 3 YEAR
  • 3rd
  • 19 out of 32 funds
  • 5 YEAR
  • 4th
  • 25 out of 29 funds
  • 10 YEAR
  • 3rd
  • 13 out of 18 funds
  • 1st
  • 1 out of 5 funds

Ratings agency calculation methodology

Portfolio Managers

Robert J. Horrocks, PhD photo
Kenneth  Lowe, CFA photo
Kenneth Lowe, CFA

Lead Manager

Satya  Patel photo
Satya Patel


Portfolio Characteristics

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

Source: BNY Mellon Investment Servicing (US) Inc.

$134.1 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 12/31/2020)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 7.1
Tencent Holdings, Ltd. Communication Services China/Hong Kong 4.9
Samsung Electronics Co., Ltd. Information Technology South Korea 4.3
AIA Group, Ltd. Financials China/Hong Kong 4.1
Midea Group Co., Ltd. Consumer Discretionary China/Hong Kong 2.4
Techtronic Industries Co., Ltd. Industrials China/Hong Kong 2.4
Housing Development Finance Corp., Ltd. Financials India 2.3
Broadcom, Inc. Information Technology United States 2.1
Advantech Co., Ltd. Information Technology Taiwan 2.0
Macquarie Korea Infrastructure Fund Financials South Korea 2.0
TOTAL 33.6

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
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 19.1 23.1 -4.0
Consumer Discretionary 17.1 19.1 -2.0
Financials 16.0 17.9 -1.9
Communication Services 11.4 11.5 -0.1
Industrials 10.8 5.3 5.5
Consumer Staples 8.2 5.0 3.2
Real Estate 6.7 3.9 2.8
Utilities 3.9 2.2 1.7
Health Care 2.3 5.0 -2.7
Materials 1.1 4.3 -3.2
Energy 0.0 2.8 -2.8
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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

Country Fund Benchmark Difference
China/Hong Kong 43.8 51.6 -7.8
South Korea 13.0 15.2 -2.2
Taiwan 10.6 14.2 -3.6
Singapore 7.7 2.4 5.3
India 7.4 10.4 -3.0
France 3.5 0.0 3.5
Indonesia 2.5 1.5 1.0
Australia 2.5 0.0 2.5
United States 2.1 0.0 2.1
Vietnam 1.4 0.0 1.4
Philippines 1.3 0.8 0.5
Thailand 0.9 2.1 -1.2
Malaysia 0.0 1.7 -1.7
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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

Asset Type Fund
Common Equities and ADRs 85.8
Convertible Bonds 9.1
Preferred Equities 1.8
Cash and Other Assets, Less Liabilities 3.3
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 54.3 64.0 -9.7
Large Cap ($10B-$25B) 11.9 19.7 -7.8
Mid Cap ($3B-$10B) 23.2 14.9 8.3
Small Cap (under $3B) 7.4 1.5 5.9
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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.


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 $0.05757 $0.00000 $0.00475 $0.06232 0.4% N.A.
06/24/2020 06/25/2020 $0.10611 $0.00000 $0.00000 $0.10611 0.7% N.A.
12/16/2019 12/17/2019 $0.18076 $0.00000 $0.22385 $0.40461 2.6% N.A.
06/17/2019 06/18/2019 $0.17400 $0.00000 $0.00000 $0.17400 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 Asian Growth and Income Fund returned 7.91% (Investor Class) and 7.93% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index returned 10.79%.

Market Environment:

Following the tumult of the first quarter, equity markets across much of the globe have not only reversed such drops but are now approaching, and in some instances are above, all-time highs. While the coronavirus related drop may have been too extreme, we believe the pace and strength of the equity market recovery appears to be pricing in an unlikely rapid return to normalcy. Aggressive loosening of monetary policy by central banks, expansive fiscal stimulus and rampant liquidity exacerbated by increased retail investor participation have amalgamated to seemingly drive market prices, in many instances, away from fundamental value. This is particularly true given a backdrop of high unemployment that may prove stickier than anticipated, elevated geopolitical tension and U.S. election risk.

For Asian markets, these issues seem less relevant. The economic recovery in the region’s largest economy, China, has been surprisingly solid with a rebound in the majority of macroeconomic metrics in what is now a predominantly domestic demand driven economy. This could suggest that the rebound in asset prices has more justification than elsewhere. Added to this was a weakening U.S. dollar that likely helped to conspire toward another quarter of double digit returns for Asian markets. This was concentrated predominantly in North Asia with South Korea, Taiwan and China all gaining strongly whereas Southeast Asia struggled given what is likely to be a more sustained downturn due to less fiscal room and weaker health care infrastructure.

Performance Contributors and Detractors:

The largest contributor to performance during the third quarter came from the information technology sector. TSMC, the world’s largest semiconductor foundry, gained as competitor Intel announced that it may consider outsourcing its own production. This further confirms TSMC’s leading position as it is also likely to gain from increasing content value in Apple’s new iPhone as well as potential wins from other customers such as Advanced Micro Devices. Samsung Electronics rose as it is expected that it can gain smartphone market share from Huawei given U.S. restrictions on the latter’s access to necessary components. Venture Corporation in Singapore was also a solid performer as the contract manufacturing services business delivered better than expected results. Demand appears to be strong in most verticals including life sciences, medical devices, networking and semiconductors.

The portfolio’s Hong Kong holdings were also reasonable performers during the quarter. Power tool leader Techtronic Industries gained as it demonstrated its competitive advantage during the crisis with double digit revenue growth during the first half of the year, taking share from the competition. Auto parts supplier Minth Group rose as it further enters the supply chain for electric vehicles via its battery housing business. Fellow parts supplier Hanon Systems in South Korea also benefited from this as it is a leader in e-compressor technology for climate control systems.  

On the other hand, traditional ‘defensive’ businesses struggled during the quarter, with telecom stocks particularly weak. Japanese telecom KDDI sputtered as new Japanese Prime Minister Suga has long held ambitions of reducing wireless pricing. Singapore’s Singtel also fell as lower roaming fees, rising price competition and weaker enterprise revenues all led to weak earnings delivery. Outside of telecoms, China’s Jiangsu Expressway fell as a change in truck pricing methodology for the province has hurt traffic flow and is likely to impact revenues in the near term.

Financial stocks again delivered weak performance. China’s Ping An Insurance dropped on poor first half earnings that witnessed a decline in value of new business for its life insurance arm and a spike in credit guarantee losses within non-life insurance. Bank of China (Hong Kong) fell as earnings were hit by declining money market rates that weighed on the bank’s net interest margins. Similarly, an earnings miss caused Bank of the Philippines Islands to underperform as it aggressively raised credit provisions ahead of asset quality deterioration. We believe this to be prudent management as it seeks to shore up its balance sheet for the long term.

Notable Portfolio Changes:

The portfolio has continued to see significant activity as market price action creates opportunities to upgrade our holdings. We added three new equity holdings and one convertible bond during the quarter with all of these residing in Mainland China.

We established an equity position in Zhongsheng Group—an entity within which we had previously held its convertible bonds. The company is a leading auto dealership in China with over 300 branches offering brands such as Mercedes-Benz, Lexus, Honda and Toyota. Management has done an impressive job in scaling the company and it now has over 50% of its gross profit coming from the less cyclical after-sales services. We believe that it will have continued growth through a rising number of dealerships, car volume growth and ramping up its after-sales services further. The stock trades at a relatively attractive valuations.

Elsewhere in China we added Ping An Insurance. Trading at attractive valuations, we believe the leading financial conglomerate in the country is well placed. Its renewed focus on improving life insurance agent productivity as well as its impressive technology suite stand the company in good stead in our view to take advantage of the vast opportunity in providing social infrastructure for the country. We also added property developer China Resources Land as we believe it has delivered well in diversifying into more recurring revenue streams including its 42 shopping malls. A top 10 developer, it is well positioned to grow through this and its newer businesses such as rentals and senior housing.

We also added convertible bonds issued by e-commerce service provider Baozun. The firm offers store operations, logistics and marketing to brand partners and will likely grow along with e-commerce trends and new customer acquisition.

These ideas were funded through the sale of lower conviction holdings including Prudential, Shanghai Airport, CK Asset, China Mobile and Jardine Matheson. 


Despite a challenging backdrop, the third quarter of the year surprised us with the strength of global equity markets. We believe that this march upward is unlikely to be as smooth going forward as continued wrangling over the next somewhat unaffordable fiscal stimulus bill, a potentially contested U.S. election, rising geopolitical tensions, broad based unemployment challenges and high valuations are all prospective volatility generators.

However, Asia seems to look relatively better positioned than many. China appears to be the most ‘normal’ major economy, with levels of activity in certain areas already returning to those seen in 2019. And much of North Asia has a similarly solid outlook.

At a fundamental level, Asian markets have priced in a return to expansion with expectations for 23% earnings growth in 2021, and the MSCI Asia ex Japan Index trading at a relatively high 14.7x those estimates. It should also be noted that certain sectors such as technology and health care, in our view, appear to be the most extreme in disconnects between company fundamentals, valuations and the economic outlook.  This leads us to remain broadly cautious in these areas.

For the Matthews Asian Growth and Income Fund, we remain constructive. Asia’s relative economic standing is solid and, in our estimation, volatility in asset prices may return to elevated levels. Backdrops such as this are typically environments where the Fund’s focus on quality companies that we believe are built to last bears fruit. In choppy waters, our aim to mitigate volatility and produce reasonable total returns through the steadier means of balancing growth and income should be well placed to deliver for clients.


As of September 30, 2020, the securities mentioned comprised the Matthews Asian Growth and Income Fund in the following percentages: Taiwan Semiconductor Manufacturing Co., Ltd., 6.5%; Samsung Electronics Co., Ltd., 3.2%;. Venture Corp., Ltd., 1.6%; Techtronic Industries Co., Ltd., 2.6%; Minth Group, Ltd., 1.7%; Hanon Systems, 1.2%; KDDI Corp., 1.2%; Singapore Telecommunications, Ltd., 1.2%; Jiangsu Expressway Co., Ltd. H Shares, 1.3%; Ping An Insurance Group Co. of China, Ltd. H Shares, 1.2% Bank of the Philippines Islands, 1.2%; Zhongsheng Group Holdings, Ltd., 1.4%; China Resources Land Ltd., 1.5%; Baozun, Inc., Cnv., 1.625%, 05/01/2024, 1.4%.

Average Annual Total Returns - MACSX as of 12/31/2020
1YR 3YR 5YR 10YR Since Inception Inception Date
16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994

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 1.08%
Yields as of 12/31/2020
30-Day Yield 1.37%
Dividend Yield 2.55%

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.

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.

Related Funds


Matthews Asia Dividend Fund


Matthews China Dividend Fund


Matthews Asia Credit Opportunities 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.