TOP

Matthews Asia Growth Fund
MPACX

Snapshot
  • Unconstrained growth strategy investing across Asia Pacific’s developed, emerging and frontier markets
  • Focus on the most profitable and attractive growth opportunities in Asia
  • Highly-differentiated portfolio offers exposure to names often under-represented in broader global equity strategies

10/31/2003

Inception Date

14.35%

YTD Return

(as of 07/16/2024)

$24.23

NAV

(as of 07/16/2024)

+0.13

1 Day NAV Change

(as of 07/16/2024)

Objective

Long-term capital appreciation.

Strategy

Under normal circumstances, the Matthews Asia Growth Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia. The Fund may also invest in the convertible securities, of any duration or quality, of Asian companies. 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 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.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 10/31/2003
Fund Assets $342.01 million (06/30/2024)
Currency USD
Ticker MPACX
Cusip 577-130-867
Portfolio Turnover 77.3%
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 1.13%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 06/30/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Growth Fund - MPACX
10/31/2003
MPACX
3.11% 2.12% 9.39% 14.41% -15.16% 0.67% 3.25% 6.89%
MSCI All Country Asia Pacific Index
2.39% 2.68% 7.94% 13.49% -1.96% 5.17% 4.93% 6.49%
As of 06/30/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Growth Fund - MPACX
10/31/2003
MPACX
3.11% 2.12% 9.39% 14.41% -15.16% 0.67% 3.25% 6.89%
MSCI All Country Asia Pacific Index
2.39% 2.68% 7.94% 13.49% -1.96% 5.17% 4.93% 6.49%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews Asia Growth Fund - MPACX
MPACX
3.53% -33.12% -14.65% 46.76% 26.18% -16.25% 39.39% 0.92% -0.05% 1.49%
MSCI All Country Asia Pacific Index
11.81% -16.92% -1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29%

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 06/30/2024)

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 10 funds
  • 3 YEAR
  • out of 10 funds
  • 5 YEAR
  • out of 10 funds
  • 10 YEAR
  • out of 10 funds
  • 1 YEAR
  • 2nd
  • 6 out of 2 funds
  • 3 YEAR
  • 4th
  • 16 out of 2 funds
  • 5 YEAR
  • 3rd
  • 11 out of 2 funds
  • 10 YEAR
  • 3rd
  • 10 out of 2 funds
  • SINCE INCEPTION
  • 2nd
  • 3 out of 9 funds

Ratings agency calculation methodology

Portfolio Managers

Michael J. Oh, CFA photo
Michael J. Oh, CFA

Lead Manager

Peeyush  Mittal, CFA photo
Peeyush Mittal, CFA

Co-Manager

Shuntaro  Takeuchi photo
Shuntaro Takeuchi

Co-Manager

Portfolio Characteristics

(as of 06/30/2024)
Fund Benchmark
Number of Positions 69 1,397
Weighted Average Market Cap $142.3 billion $124.3 billion
Active Share 68.8 n.a.
P/E using FY1 estimates 17.2x 14.8x
P/E using FY2 estimates 14.5x 13.2x
Price/Cash Flow 11.5 9.5
Price/Book 2.4 1.7
Return On Equity 13.3 14.1
EPS Growth (3 Yr) 19.8% 13.1%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2024)
-13.07%
Alpha
0.99
Beta
68.78%
Upside Capture
129.27%
Downside Capture
-0.94
Sharpe Ratio
-1.36
Information Ratio
9.70%
Tracking Error
75.10

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 06/30/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 6.9
Hitachi, Ltd. Industrials Japan 4.2
Keyence Corp. Information Technology Japan 3.7
Shin-Etsu Chemical Co., Ltd. Materials Japan 3.5
Samsung Electronics Co., Ltd. Information Technology South Korea 3.4
Tencent Holdings, Ltd. Communication Services China/Hong Kong 3.2
SK Hynix, Inc. Information Technology South Korea 2.9
ORIX Corp. Financials Japan 2.7
Sea, Ltd. Communication Services Singapore 2.5
PDD Holdings, Inc. Consumer Discretionary China/Hong Kong 2.3
TOTAL 35.3

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 06/30/2024)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 26.8 21.4 5.4
Consumer Discretionary 19.8 14.0 5.8
Financials 18.4 20.2 -1.8
Industrials 10.5 12.3 -1.8
Communication Services 8.6 7.9 0.7
Health Care 4.2 5.5 -1.3
Materials 3.5 6.2 -2.7
Consumer Staples 2.6 4.4 -1.8
Real Estate 1.9 2.7 -0.8
Energy 1.2 3.1 -1.9
Utilities 0.0 2.3 -2.3
Cash and Other Assets, Less Liabilities 2.4 0.0 2.4

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

Country Fund Benchmark Difference
Japan 33.9 32.3 1.6
China/Hong Kong 18.3 18.8 -0.5
India 14.0 12.4 1.6
Taiwan 12.9 12.5 0.4
South Korea 10.2 7.9 2.3
Singapore 2.5 1.9 0.6
Australia 2.3 10.7 -8.4
Indonesia 1.3 1.0 0.3
Thailand 0.9 0.9 0.0
Philippines 0.7 0.3 0.4
Vietnam 0.5 0.0 0.5
Malaysia 0.0 0.9 -0.9
New Zealand 0.0 0.3 -0.3
Macau 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 2.4 0.0 2.4

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 78.5 64.5 14.0
Large Cap ($10B-$25B) 11.2 20.3 -9.1
Mid Cap ($3B-$10B) 6.8 14.8 -8.0
Small Cap (under $3B) 1.1 0.3 0.8
Cash and Other Assets, Less Liabilities 2.4 0.0 2.4

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)
12/13/2023 12/14/2023 $0.37967 $0.00000 $0.00000 $0.37967 1.8% N.A.
12/13/2022 12/14/2022 $0.00000 $0.00000 $0.57757 $0.57757 2.6% N.A.
12/14/2021 12/15/2021 $0.00000 $0.47969 $1.17413 $1.65382 4.8% N.A.
12/15/2020 12/16/2020 $0.15061 $0.16831 $1.39495 $1.71387 4.6% N.A.
12/16/2019 12/17/2019 $0.00000 $0.00000 $0.27416 $0.27416 1.0% N.A.

 

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 June 30, 2024

Market Environment

  • Markets in Asia performed largely in line with our expectations in the second quarter, with Taiwan, India and China delivering positive performances. Inflation on the whole is not as high as in developed markets and in the absence of rate cuts from the U.S. Federal Reserve, a lot of positive performance was driven by fundamentals and earnings growth.
  • The expansion of the artificial intelligence (AI) supply chain, led by large U.S. tech firms, was another supportive theme, particularly for semiconductor hubs in Asia. The last quarter also saw volatility in India’s market triggered by Prime Minister Modi’s failure to win a majority in the national elections which sparked worries that the economic strategy of the country could be challenged.
  • Looking more closely at the region, Japan’s market was provided support by large-cap stocks as they sold down cross holdings and bought back shares to comply with regulator demands for capital efficiencies. Taiwan was driven by demand for hardware from the U.S. while South Korea experienced weakness in cyclical sectors and in certain areas—including electric vehicles (EV) and EV battery making—oversupply has hurt prices and equity performance.
  • Indian equities recovered from the market’s negative reaction to the election result when it became clear that Modi would form a coalition with allies. Indian local bonds also had their inaugural inclusion in the JPMorgan Government Bond Index-Emerging Markets (GBI-EM) index, which is expected to add significant foreign investor inflows in coming quarters. Chinese equities, meanwhile, performed well despite ongoing economic challenges, helped by the government’s attempts to stabilize the real estate market and a cyclical pickup in some sectors.

Contributors and Detractors

  • For the quarter ended June 30, 2024, the Matthews Asia Growth Fund returned 2.12%, (Investor Class) and 2.17% (Institutional Class) while its benchmark, the MSCI All Country Asia Pacific Index, returned 2.68% over the same period.
  • On a country basis, the top three contributors to relative performance were Japan, South Korea and Singapore due to stock selection. The top three detractors were China/Hong Kong and Indonesia due to stock selection and Vietnam due to an off-benchmark allocation.
  • On a sector basis, the top three contributors to relative performance were consumer discretionary, industrials and communication services due to stock selection. The top three detractors were financials and materials due to stock selection and utilities due to zero allocation.
  • The largest contributors to absolute performance included Taiwan Semiconductor Manufacturing Co. (TSMC), a leading Taiwanese chipmaker, Hitachi, a Japanese multinational electronics conglomerate, and SK Hynix, a Korean semiconductor company. The top three detractors to performance included PT Bank Rakyat Indonesia (Persero), an Indonesian microfinance company, Tokyo Electron, a Japanese electronics company, and Fast Retailing, a Japanese clothing manufacturer and retailer.

Outlook

  • Post-COVID growth in Asia is starting to come through and broaden out and we think this will pave the way for consistent earnings growth over the next few years. We also see more upside to equity performance driven by North Asia and underpinned by earnings growth and a widening of AI-related adoption. In South Korea, capital reform initiatives are welcome though we see them having more of a longer-term impact on values.
  • Markets in Asia should also benefit from the onset of a monetary easing cycle in the U.S. and the decline in the value of the U.S. dollar that would likely bring, in our view. In India, we think the market will continue to progress though it is still expensive. Under the new coalition government, we may see spending on growth spread out beyond infrastructure and CapEx which could yield more opportunities in consumption.
  • In Japan, we are constructive for three reasons: resilient earnings; capital efficiency gains; and positioning—global investors remain underweight to Japan which leaves valuations at a relatively reasonable level, in our view.
  • In China, we are cognizant to potential catalysts for growth and to potential headwinds, such as increased volatility as we approach the U.S. president election in November.

 

View the Fund’s Top 10 holdings as of June 30, 2024. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MPACX as of 06/30/2024
1YR 3YR 5YR 10YR Since Inception Inception Date
14.41% -15.16% 0.67% 3.25% 6.89% 10/31/2003

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. For the Fund's most recent month-end performance visit matthewsasia.com

Fees & Expenses
Gross Expense Ratio 1.13%

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.

 

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.