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Matthews Emerging Markets Equity Fund
MEGMX

Snapshot
  • Portfolio construction incorporates a macroeconomic framework combined with fundamental analysis that drives stock selection
  • Dynamic portfolio exposure driven by a clear framework based on EPS growth and P/E analysis
  • Risk management controls overall beta exposure and key drivers of risk

04/30/2020

Inception Date

13.78%

YTD Return

(as of 07/11/2025)

$14.86

NAV

(as of 07/11/2025)

-0.03

1 Day NAV Change

(as of 07/11/2025)

Objective

Long-term capital appreciation

Strategy

Under normal circumstances, the Matthews Emerging Markets Equity 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 emerging market countries. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. Certain emerging market countries may also be classified as “frontier” market countries, which are a subset of emerging market countries with newer or even less developed economies and markets, such as Sri Lanka and Vietnam. The list of emerging market countries and frontier market countries may change from time to time. The Fund may also invest in companies located in developed countries; however, the Fund may not invest in any company located in a developed country if, at the time of purchase, more than 20% of the Fund’s assets are invested in developed market companies.

Risks

Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets 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 04/30/2020
Fund Assets $251.59 million (06/30/2025)
Currency USD
Ticker MEGMX
Cusip 577-130-651
Benchmark MSCI Emerging Markets Index
Geographic Focus Emerging Markets - Countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe
Fees & Expenses
Gross Expense Ratio 2.45%
Net Expense Ratio 1.11%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 06/30/2025
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Emerging Markets Equity Fund - MEGMX
04/30/2020
MEGMX
6.15% 11.75% 13.63% 16.91% 12.85% 8.25% n.a. 11.25%
MSCI Emerging Markets Index
6.14% 12.20% 15.57% 15.97% 10.23% 7.26% n.a. 8.67%
As of 06/30/2025
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Emerging Markets Equity Fund - MEGMX
04/30/2020
MEGMX
6.15% 11.75% 13.63% 16.91% 12.85% 8.25% n.a. 11.25%
MSCI Emerging Markets Index
6.14% 12.20% 15.57% 15.97% 10.23% 7.26% n.a. 8.67%
For the years ended December 31st
Name 2024 2023 2022 2021
Matthews Emerging Markets Equity Fund - MEGMX
MEGMX
11.13% 8.43% -20.94% -0.60%
MSCI Emerging Markets Index (USD)
8.05% 10.27% -19.74% -2.22%

Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.

Year to Date and Since Inception performance with less than one year of history represents actual performance, not annualized.

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 06/30/2025)

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 711 funds
  • 3 YEAR
  • out of 711 funds
  • 5 YEAR
  • out of 629 funds

Ratings agency calculation methodology

Portfolio Managers

Sean  Taylor photo
Jeremy  Sutch, CFA photo

Portfolio Characteristics

(as of 06/30/2025)
Fund Benchmark
Number of Positions 77 1,203
Weighted Average Market Cap $207.3 billion $190.5 billion
Active Share 66.4 n.a.
P/E using FY1 estimates 13.3x 13.3x
P/E using FY2 estimates 11.7x 11.9x
Price/Cash Flow 7.7 8.4
Price/Book 2.0 1.9
Return On Equity 19.5 18.4
EPS Growth (3 Yr) 19.3% 11.0%

Sources: Factset Research Systems, Inc.

Top 10 Holdings

(as of 06/30/2025)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 10.4
Tencent Holdings, Ltd. Communication Services China/Hong Kong 5.4
Samsung Electronics Co., Ltd. Information Technology South Korea 3.0
NetEase, Inc. Communication Services China/Hong Kong 2.3
Hana Financial Group, Inc. Financials South Korea 2.2
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 2.1
HDFC Bank, Ltd. Financials India 2.0
Shriram Finance, Ltd. Financials India 2.0
Itau Unibanco Holding SA Financials Brazil 2.0
China Construction Bank Corp. Financials China/Hong Kong 1.9
TOTAL 33.3

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 06/30/2025)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 32.9 24.5 8.4
Information Technology 20.3 24.1 -3.8
Consumer Discretionary 15.5 12.8 2.7
Communication Services 11.4 9.8 1.6
Consumer Staples 4.8 4.5 0.3
Energy 2.3 4.3 -2.0
Industrials 2.1 6.9 -4.8
Real Estate 1.9 1.6 0.3
Materials 0.9 5.8 -4.9
Health Care 0.9 3.2 -2.3
Utilities 0.0 2.6 -2.6
Cash and Other Assets, Less Liabilities 7.0 0.0 7.0

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

Country Fund Benchmark Difference
China/Hong Kong 30.8 28.5 2.3
India 22.0 18.1 3.9
Taiwan 14.7 18.8 -4.1
South Korea 12.7 10.7 2.0
Brazil 3.0 4.4 -1.4
South Africa 2.3 3.2 -0.9
Mexico 2.1 2.0 0.1
Philippines 1.4 0.5 0.9
Singapore 1.1 0.0 1.1
United States 1.1 0.0 1.1
Indonesia 1.0 1.2 -0.2
Thailand 0.9 1.0 -0.1
Saudi Arabia 0.0 3.5 -3.5
United Arab Emirates 0.0 1.6 -1.6
Malaysia 0.0 1.3 -1.3
Poland 0.0 1.1 -1.1
Kuwait 0.0 0.8 -0.8
Qatar 0.0 0.7 -0.7
Greece 0.0 0.6 -0.6
Chile 0.0 0.5 -0.5
Turkey 0.0 0.5 -0.5
Hungary 0.0 0.3 -0.3
Peru 0.0 0.3 -0.3
Czech Republic 0.0 0.2 -0.2
Colombia 0.0 0.1 -0.1
Egypt 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 7.0 0.0 7.0

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 66.0 62.2 3.8
Large Cap ($10B-$25B) 18.3 22.6 -4.3
Mid Cap ($3B-$10B) 7.8 14.9 -7.1
Small Cap (under $3B) 1.0 0.3 0.7
Cash and Other Assets, Less Liabilities 7.0 0.0 7.0

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.

Risk Metrics (3 Yr Return)

(as of 03/31/2025)
0.93%
Alpha
0.91
Beta
91.15%
Upside Capture
89.54%
Downside Capture
-0.08
Sharpe Ratio
0.20
Information Ratio
5.76%
Tracking Error
89.34

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

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)
12/17/2024 12/18/2024 $0.12024 $0.00000 $0.00000 $0.12024 0.9% N.A.
12/13/2023 12/14/2023 $0.21539 $0.00000 $0.00000 $0.21539 1.8% N.A.
12/13/2022 12/14/2022 $0.20142 $0.00000 $0.00000 $0.20142 1.7% N.A.
12/14/2021 12/15/2021 $0.18047 $0.68627 $0.43302 $1.29976 8.5% N.A.
12/15/2020 12/16/2020 $0.00000 $0.35583 $0.00000 $0.35583 2.3% 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, 2025

Market Environment

  • Emerging markets had a positive quarter as concerns over U.S. tariffs eased amid potential trade deals while growth in the artificial intelligence (AI) supply chain remained strong. A temporarily weakened U.S. dollar also provided a tailwind for emerging markets. Emerging markets overall gained 12%.
  • South Korea was the top performing emerging market buoyed by the election of President Lee Jae Myung who is seen as a progressive and market friendly leader. India’s performance improved as the central bank cut rates to try and boost consumer spending while China’s performance was impacted by a tit-for-tat escalation of tariffs with the U.S. Markets in Southeast Asia were affected by domestic political issues and concerns over U.S. tariffs.
  • Latin America outperformed the broad emerging markets index. Mexico’s market benefited from alignments to the U.S. economy and Brazil gained amid an improving macro environment. A major source of uncertainty in the period was the Israel-Iran conflict and the implications it may have for the wider region and global economy.

Contributors and Detractors

  • For the quarter ended June 30, 2025, the Matthews Emerging Markets Equity Fund returned 11.75%, (Investor Class) and 11.84% (Institutional Class) while its benchmark, the MSCI Emerging Markets Index, returned 12.20% over the same period.
  • On a country basis, the top three contributors to relative performance were Saudi Arabia due to zero allocation, South Korea due to an overweight allocation and India due to stock selection. The top three detractors were China/Hong Kong due to an overweight allocation and stock selection, Singapore due to stock selection and United Arab Emirates due to an underweight allocation and stock selection.
  • On a sector basis, the top three contributors to relative performance were financials and information technology (IT) due to stock selection and energy due to an underweight allocation. The top three detractors were industrials due to an underweight allocation and stock selection, consumer discretionary due to an overweight allocation and consumer staples due to stock selection.
  • The largest contributors to absolute performance included Taiwan Semiconductor Manufacturing Co. (TSMC), a globally leading chipmaker, SK Hynix, a South Korean semiconductor company, and Hana Financial Group Inc., a South Korean financial services company. The top three detractors included JD.com, a leading e-commerce platform in China, Meituan, China’s largest food delivery service and internet platform company, and Alibaba Group, the largest e-commerce platform company in China.

Outlook

  • With President Trump’s July 9 tariff deadline for reaching trade agreements approaching, more market volatility is to be expected. However, we believe the peak fear of tariffs has passed—barring any significant escalation in duties on countries where agreements are not reached.
  • We also think that earnings growth improvements in emerging markets could potentially offer significant upside pressure to investment returns. During the quarter, a large proportion of returns were tied to rising valuations and currency movements, with limited impact from improving financial results.
  • A potential loosening of U.S. monetary policy and a weaker dollar would also be favorable for emerging markets, particularly in Latin America. In China, while a meaningful pickup in property and general consumption has yet to be seen, we anticipate some progress later in the year and into 2026.
  • As summer headwinds ease, in terms of seasonality, Middle East conflicts, trade and the U.S. economy, we believe there will be greater clarity on the prospects for global markets. This should allow the drivers of emerging markets—earnings recovery, diversification, a weaker dollar, and cheap valuations—to gain traction in our view.

View the Fund's Top 10 holdings as of June 30, 2025. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MEGMX as of 06/30/2025
1YR 3YR 5YR 10YR Since Inception Inception Date
16.91% 12.85% 8.25% N.A. 11.25% 04/30/2020

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 2.45%
Net Expense Ratio 1.11%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2026. Please see the Fund’s prospectus for additional details.

Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets 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.