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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

-28.38%

YTD Return

(as of 12/01/2022)

$13.47

NAV

(as of 12/01/2022)

0.00

1 Day NAV Change

(as of 12/01/2022)

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 $2.15 billion (10/31/2022)
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 10/31/2022
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
-5.08% -16.95% -36.46% -37.92% -5.99% -3.88% 2.81% 5.56%
MSCI All Country Asia Pacific Index
-1.95% -14.32% -27.60% -28.92% -3.40% -1.53% 3.84% 2.87%
As of 09/30/2022
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
-11.83% -11.95% -33.06% -34.68% -3.06% -2.04% 3.46% 5.94%
MSCI All Country Asia Pacific Index
-11.81% -11.05% -26.16% -27.49% -1.37% -0.31% 4.01% 3.01%
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 09/30/2022)

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 09/30/2022)
0.81% 30-Day SEC Yield
0.81% 30-Day SEC Yield (excluding expense waiver)
2.12% 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
  • 98 out of 100 funds
  • 3 YEAR
  • 3rd
  • 63 out of 96 funds
  • 5 YEAR
  • 3rd
  • 60 out of 89 funds
  • 10 YEAR
  • 1st
  • 12 out of 55 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 09/30/2022)
Fund Benchmark
Number of Positions 54 1,507
Weighted Average Market Cap $46.3 billion $67.3 billion
Active Share 86.8 n.a.
P/E using FY1 estimates 14.9x 11.3x
P/E using FY2 estimates 12.3x 10.9x
Price/Cash Flow 10.2 7.0
Price/Book 2.0 1.4
Return On Equity 16.6 14.3
EPS Growth (3 Yr) 12.4% 10.8%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 09/30/2022)
-1.61%
Alpha
0.96
Beta
92.97%
Upside Capture
101.65%
Downside Capture
-0.21
Sharpe Ratio
-0.25
Information Ratio
6.77%
Tracking Error
85.02

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 10/31/2022)
Name Sector Country % Net Assets
UNO Minda, Ltd. Consumer Discretionary India 6.0
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 4.6
KATITAS Co., Ltd. Real Estate Japan 3.3
Breville Group, Ltd. Consumer Discretionary Australia 2.9
Asia Commercial Bank JSC Financials Vietnam 2.9
IDP Education, Ltd. Consumer Discretionary Australia 2.9
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 2.9
FPT Corp. Information Technology Vietnam 2.8
Olympus Corp. Health Care Japan 2.6
Bangkok Dusit Medical Services Public Co., Ltd. Health Care Thailand 2.4
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 09/30/2022)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Consumer Discretionary 30.4 15.0 15.4
Industrials 11.1 11.4 -0.3
Communication Services 10.5 8.6 1.9
Financials 10.4 19.0 -8.6
Information Technology 9.6 16.3 -6.7
Real Estate 7.5 4.1 3.4
Health Care 6.3 6.9 -0.6
Consumer Staples 5.6 6.1 -0.5
Materials 3.0 7.0 -4.0
Energy 1.1 3.2 -2.1
Utilities 0.0 2.4 -2.4
Cash and Other Assets, Less Liabilities 4.4 0.0 4.4

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 27.0 24.7 2.3
Japan 26.1 31.5 -5.4
Vietnam 12.0 0.0 12.0
Australia 8.6 11.1 -2.5
India 7.8 10.0 -2.2
Singapore 3.3 2.2 1.1
Taiwan 3.0 8.9 -5.9
Thailand 2.3 1.4 0.9
Indonesia 2.0 1.4 0.6
Philippines 1.3 0.5 0.8
South Korea 1.2 7.0 -5.8
Bangladesh 1.0 0.0 1.0
Malaysia 0.0 1.0 -1.0
New Zealand 0.0 0.3 -0.3
Cash and Other Assets, Less Liabilities 4.4 0.0 4.4

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

Asset Type Fund
Common Equities and ADRs 94.4
Preferred Equities 1.2
Cash and Other Assets, Less Liabilities 4.4
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 30.7 54.7 -24.0
Large Cap ($10B-$25B) 13.2 22.6 -9.4
Mid Cap ($3B-$10B) 31.4 20.6 10.8
Small Cap (under $3B) 20.3 2.1 18.2
Cash and Other Assets, Less Liabilities 4.4 0.0 4.4

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)
09/27/2022 09/28/2022 $0.01921 $0.00000 $0.00000 $0.01921 0.1% N.A.
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 September 30, 2022

For the third quarter ending September 30, 2022, the Matthews Asia Dividend Fund returned -11.95% (Investor Class) and -11.99% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -11.05%.

Market Environment:

During the third quarter, a more affirmative and hawkish stance adopted by the U.S. Federal Reserve and the ongoing energy crisis in Europe increased recessionary risks globally through reactionary tightening by other central banks to defend their currencies and curb imported inflation. Global equities declined broadly during the period. In Asia, Indonesia and India were the only two markets with positive returns, posting 7.8% and 6.8% gains respectively. Indonesia stood out with its government’s policy reforms and resilient economy supported by the commodity cycle. In India, we observed continued strength in capital spending and domestic consumption driven by its residential property market and the economy’s rising role in the global supply chain. However, India’s high valuation at 21.4x forward P/E in the current stage of monetary tightening makes it vulnerable to profit taking.

In China, the market declined 22% in the quarter, reflecting caution over a softening economy and corporate earnings in the near term as the government closely adheres to its zero-COVID policy ahead of the Party Congress in October. Meanwhile, Japan fell 7.5% with most of the decline driven by yen depreciation.

Performance Contributors and Detractors:

From a regional perspective, our overweight and stock selection in China detracted most from relative performance during the third quarter as the market worried about an economic slowdown caused by China’s zero-COVID policy. Our underweight allocation to India also hurt relative performance as investors remained positive on the solid trend of capital spending and consumption in the country. The high market valuation of Indian equities makes investments there less attractive at the moment as we see evidence of higher inflation and tightening monetary policies.

On the other hand, our stock selection in Japan contributed positively in the quarter as holdings in consumer sectors received strong earnings tailwinds as restrictions lift on inbound tourism to the country. Our underweights in South Korea and Taiwan were also positive contributors.

From a sector perspective, poor stock selection in health care detracted the most from relative performance. The market has been concerned about the outlook for Chinese medical and clinical service companies amid geopolitical tensions with the U.S. Conversely, our strong stock selection in consumer discretionary was the biggest contributor to relative performance. Holdings positioned to benefit from a rebound in Japanese tourism and stocks with idiosyncratic earnings drivers were less impacted by global economic challenges and outperformed.

Turning to individual holdings, Chinese internet leaders, including Alibaba Group, Tencent and Baidu, were among the largest detractors to performance in the period. Although sentiment remains pessimistic due to the prospect of near-term earnings hits from weak consumption, these companies have rationalized their capital investments and operational cost base and are better valued for the eventual reopening of the Chinese economy. On the positive side, UNO Minda Ltd., a leading auto parts manufacturer in India, was the top contributor to performance. The company posted strong earnings growth, driven by its leading market share in the fast-growing SUV market.

Notable Portfolio Changes:

In the third quarter, we initiated two positions in Japanese stocks whose earnings are expected to grow strongly after Japan fully reopens for inbound tourism. One is Kyoritsu Maintenance, an operator and manager of business and resort hotels. Another is Kotobuki Spirits, a leading retail chain with high popularity among tourists for its concessionaries. The recent depreciation of the yen and benign domestic inflation have further added to the appeal of Japan as a post-pandemic travel destination.

Conversely, we reduced positions in commercial banks, including United Overseas Bank in Singapore and CTBC Financial Holding in Taiwan. The expectation of a longer period of U.S. monetary-tightening policies and a strong U.S. dollar have started to force many other central banks into accelerated tightening and increased the risks of recession in some countries. This has led to heightened risks in lending growth and asset quality trends at commercial banks.

Outlook:

China's zero-COVID policy remains a major impediment to its economic recovery. While the implementation of such restrictive policy could become more pragmatic after October's Party Congress, trying to balance economic growth with pandemic control means a full re-opening of the economy is a low probability event for this year. A weaker Chinese economy, coupled with a hawkish U.S. Fed monetary policy stance and a fragile European economy facing deep energy crisis, could continue rattling investors' confidence. However, by sticking with our total-return investment approach and using dividends as a quality check, we believe the volatile market environment is also one of the best times to look for well-run Asian businesses with structural growth trends intact and upgrade the overall quality of our portfolio holdings.

Top 10 holdings as of September 30, 2022. Current and future holdings are subject to change and risk.

 

Average Annual Total Returns - MAPIX as of 09/30/2022
1YR 3YR 5YR 10YR Since Inception Inception Date
-34.68% -3.06% -2.04% 3.46% 5.94% 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 09/30/2022
30-Day SEC Yield 0.81%
30-Day SEC Yield (excluding expense waiver) 0.81%
Dividend Yield 2.12%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2022, 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.