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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

-23.49%

YTD Return

(as of 08/09/2022)

$14.41

NAV

(as of 08/09/2022)

-0.04

1 Day NAV Change

(as of 08/09/2022)

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.

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

Fund Facts
Inception Date 10/31/2006
Fund Assets $2.89 billion (07/31/2022)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 47.4%
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 07/31/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund - MAPIX
10/31/2006
MAPIX
0.63% -2.40% -23.49% -24.47% 1.31% 0.89% 5.34% 6.91%
MSCI All Country Asia Pacific Index
1.80% -4.04% -15.50% -16.47% 2.99% 2.67% 5.85% 3.93%
As of 06/30/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund - MAPIX
10/31/2006
MAPIX
-3.46% -10.11% -23.97% -27.97% 0.62% 1.26% 5.45% 6.90%
MSCI All Country Asia Pacific Index
-6.34% -11.78% -16.99% -21.99% 2.13% 3.11% 5.81% 3.84%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews Asia Dividend Fund - MAPIX
MAPIX
-2.83% 31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32% 11.27% 21.63%
MSCI All Country Asia Pacific Index
-1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19% 17.05%

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 06/30/2022)

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 06/30/2022)
1.06% 30-Day SEC Yield
1.06% 30-Day SEC Yield (excluding expense waiver)
2.17% 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
  • 100 out of 101 funds
  • 3 YEAR
  • 3rd
  • 63 out of 97 funds
  • 5 YEAR
  • 3rd
  • 55 out of 89 funds
  • 10 YEAR
  • 1st
  • 12 out of 52 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 22 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 06/30/2022)
Fund Benchmark
Number of Positions 56 1,503
Weighted Average Market Cap $61.5 billion $84.5 billion
Active Share 85.6 n.a.
P/E using FY1 estimates 15.0x 11.9x
P/E using FY2 estimates 12.8x 11.3x
Price/Cash Flow 10.4 7.6
Price/Book 2.1 1.5
Return On Equity 17.6 14.2
EPS Growth (3 Yr) 10.1% 10.5%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2022)
-1.24%
Alpha
0.96
Beta
94.08%
Upside Capture
101.78%
Downside Capture
0.00
Sharpe Ratio
-0.22
Information Ratio
6.78%
Tracking Error
82.41

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 07/31/2022)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 5.0
Minda Industries, Ltd. Consumer Discretionary India 4.6
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.4
KATITAS Co., Ltd. Real Estate Japan 3.1
Breville Group, Ltd. Consumer Discretionary Australia 2.8
Alibaba Group Holding, Ltd. Consumer Discretionary China/Hong Kong 2.8
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.7
IDP Education, Ltd. Consumer Discretionary Australia 2.6
FPT Corp. Information Technology Vietnam 2.5
Asia Commercial Bank JSC Financials Vietnam 2.4
TOTAL 31.9

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 06/30/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 27.3 15.6 11.7
Communication Services 12.4 9.0 3.4
Financials 11.6 18.6 -7.0
Industrials 10.5 11.2 -0.7
Information Technology 9.0 16.8 -7.8
Health Care 7.5 6.5 1.0
Real Estate 7.1 4.1 3.0
Consumer Staples 4.8 5.7 -0.9
Materials 3.1 6.9 -3.8
Energy 1.0 3.1 -2.1
Utilities 0.0 2.4 -2.4
Cash and Other Assets, Less Liabilities 5.6 0.0 5.6

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 31.1 27.8 3.3
Japan 23.1 30.4 -7.3
Vietnam 10.5 0.0 10.5
Australia 7.8 10.7 -2.9
Singapore 4.7 2.0 2.7
India 4.5 8.3 -3.8
Taiwan 4.2 9.4 -5.2
Indonesia 2.1 1.2 0.9
Thailand 1.8 1.2 0.6
Philippines 1.8 0.5 1.3
South Korea 1.5 7.4 -5.9
Bangladesh 1.4 0.0 1.4
Malaysia 0.0 1.0 -1.0
New Zealand 0.0 0.2 -0.2
Cash and Other Assets, Less Liabilities 5.6 0.0 5.6

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

Asset Type Fund
Common Equities and ADRs 92.9
Preferred Equities 1.5
Cash and Other Assets, Less Liabilities 5.6
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 35.9 57.8 -21.9
Large Cap ($10B-$25B) 14.4 22.2 -7.8
Mid Cap ($3B-$10B) 33.2 19.0 14.2
Small Cap (under $3B) 10.9 1.0 9.9
Cash and Other Assets, Less Liabilities 5.6 0.0 5.6

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)
06/27/2022 06/28/2022 $0.03551 $0.00000 $0.00000 $0.03551 0.2% N.A.
03/28/2022 03/29/2022 $0.05027 $0.00000 $0.00000 $0.05027 0.3% N.A.
12/14/2021 12/15/2021 $0.01763 $0.55319 $2.31785 $2.88867 13.2% N.A.
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.
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 June 30, 2022

For the first half of 2022, the Matthews Asia Dividend Fund returned -23.97% (Investor Class) and -23.92% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -16.99% over the same period. For the quarter ending June 30, 2022, the Fund returned -10.11% (Investor Class) and -10.09% (Institutional Class), while the benchmark returned -11.78%.

Market Environment:  

During the first half of 2022, a more hawkish policy stance adopted by the U.S. Fed and the European Central Bank has raise the specter of a potential hard landing, and global equity markets including Asia have reacted negatively. MSCI AC Asia Pacific Index returned -17%, with the worst performance coming from markets with higher sensitivity to U.S. and Europe economies, including Japan, South Korea and Taiwan.  Indonesia was the only market in the Index that managed to stay flattish during the six months. The country enjoys fiscal and economic tailwinds from robust commodity prices and reopening of its economy from COVID lockdowns.  

After a decline of 14% in the first quarter due to the Shanghai lockdown and perceived risk contagion from the Russia/Ukraine conflict, China outperformed global equity markets and gained 2.3% in the second quarter. Market confidence on corporate earnings and consumption growth in the medium term was boosted by a series of economic stimulus announcements and the government’s pivot towards a more pragmatic approach with its COVID measures.

Performance Contributors and Detractors:

From a country perspective, our stock selection in Japan and China detracted from relative performance during the first half of 2022. Dividend growth holdings in Japan were hurt by worries that inflation and potential economic recession in developed countries might impact the medium-term growth outlook. Our holdings in China rebounded in the second quarter from their steep sell-off earlier in the year, after China reoriented its policies towards restoring growth, by fine tuning its COVID measures and announcing a series of stimulus. On the other hand, our stock selection in South Korea and Singapore contributed positively in the first half.

From a sector perspective, poor stock selection in the consumer discretionary sector detracted the most from relative performance. Our portfolio’s holdings exposed to discretionary consumer goods sold in developed countries were hurt by weak consumer sentiment. Additionally, holdings in auto parts companies were weighed down by the supply chain disruptions and sharp commodity price spike since the Russia/Ukraine conflict. Conversely, an underweight allocation and stock selection within information technology contributed the most to the relative performance.

Turning to individual stocks, Breville Group, a premium household appliance manufacturer headquartered in Australia, was one of the largest detractors to performance in the period. The company experienced a sharp pull-back in share performance recently due to concerns on weakening consumption outlook in North America and Europe. We believe the company is now attractively priced at below 14x forward EV/EBITDA with its motivated management team, attractive product innovation and continued market share gains over the long term. On the positive side, our holding in BOC Aviation, a leading player in the global aircraft operating leasing market, was the top contributor to performance. The company demonstrated its top-tier management quality and capital resilience over the past few years and is well positioned for the industry recovery ahead.

Notable Portfolio Changes:

During the reporting period, we increased our allocation to companies that benefited from the change in interest rate regime and companies with exposure to re-opening in most Asian economies. We took advantage of the sell-off in China to add to high-quality growth holdings with attractive valuation. For instance, we initiated positions in a few Chinese internet stocks, namely Netease (a global mobile and PC gaming franchise), JD.com (a leading Chinese e-commerce player) and Alibaba Group (the largest e-commerce platform in China with enterprise services such as cloud computing). We observed major headwinds including regulations and excessive earnings expectation that caused the severe de-rating on these stocks started to abate. With more disciplined investment plans compared to the past, the large Chinese internet companies are increasingly generating abundant positive free cash flow, and their balance sheet is flushed with high level of net cash. A few of them started conducting large share buybacks and/or paying dividends for the first time, sending an interesting signal underscoring the value in those businesses. We believe the risk/reward profile on Chinese internet stocks now looks attractive.

On the flip side, as the impact from an aggressive U.S. monetary tightening on the global economy remains quite uncertain, the portfolio exited several positions whose underlying businesses are more sensitive towards the global consumer demand situation and commodity prices. Those included Shiseido (a cosmetics company in Japan), Posco (a steel maker in South Korea), and Anritsu (a mobile device-testing equipment maker in Japan).

Outlook:

The overall global growth outlook remains murky with risks of protracted inflation and tight global liquidity amid weak economic growth. However, it is worth noting that wage inflation in most Asian countries remains quite moderate and commodity cost pressure has started to soften as well, allowing more accommodative monetary policies in these Asian countries than their developed market counterparts.  

In particular, Chinese fiscal and monetary support combined with more lenient zero-COVID policy implementation recently provided a positive catalyst for investors to refocus on long-term bottom-up corporate fundamentals for investment opportunities in the market. Admittedly, any major resurgence of COVID and resulting economic weakness in China will prolong the restoration of consumer confidence and delay corporate capital investments.

In this environment, the Fund’s focus remains steadfast—looking for businesses with a strong ability to fend off inflation cost pressures and maintain their earnings and dividend growth outlook.

 

View the Fund’s Top 10 holdings as of June 30, 2022. Current and future 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 06/30/2022
1YR 3YR 5YR 10YR Since Inception Inception Date
-27.97% 0.62% 1.26% 5.45% 6.90% 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, 2023. Please see the Fund’s prospectus for additional details.

Yields as of 06/30/2022
30-Day SEC Yield 1.06%
30-Day SEC Yield (excluding expense waiver) 1.06%
Dividend Yield 2.17%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 06/30/2022, 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.