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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

-0.79%

YTD Return

(as of 09/22/2023)

$13.09

NAV

(as of 09/22/2023)

+0.13

1 Day NAV Change

(as of 09/22/2023)

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 $1.41 billion (08/31/2023)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 50.8%
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 1.10%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 08/31/2023
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
-4.89% 2.13% 1.64% -5.71% -6.28% -1.51% 3.12% 6.03%
MSCI All Country Asia Pacific Index
-4.87% 3.26% 6.11% 5.29% 0.51% 2.29% 5.00% 3.94%
As of 06/30/2023
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
3.43% 0.07% 2.93% -4.65% -1.72% -1.46% 3.27% 6.17%
MSCI All Country Asia Pacific Index
3.48% 1.43% 6.35% 6.44% 3.81% 2.38% 5.04% 3.99%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Matthews Asia Dividend Fund - MAPIX
MAPIX
-29.57% -2.83% 31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32% 11.27%
MSCI All Country Asia Pacific Index
-16.92% -1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19%

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 06/30/2023)

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 06/30/2023)
1.90% 30-Day SEC Yield
1.90% 30-Day SEC Yield (excluding expense waiver)
2.73% 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
  • 105 out of 106 funds
  • 3 YEAR
  • 4th
  • 103 out of 103 funds
  • 5 YEAR
  • 4th
  • 99 out of 101 funds
  • 10 YEAR
  • 3rd
  • 47 out of 63 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 22 funds

Ratings agency calculation methodology

Portfolio Managers

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

Lead Manager

Elli  Lee photo
Elli Lee

Co-Manager

Siddharth  Bhargava photo
Siddharth Bhargava

Co-Manager

Winnie  Chwang photo
Winnie Chwang

Co-Manager

Portfolio Characteristics

(as of 06/30/2023)
Fund Benchmark
Number of Positions 60 1,531
Weighted Average Market Cap $76.2 billion $87.6 billion
Active Share 82.9 n.a.
P/E using FY1 estimates 16.0x 14.1x
P/E using FY2 estimates 14.3x 12.6x
Price/Cash Flow 10.0 7.8
Price/Book 2.2 1.6
Return On Equity 18.7 14.7
EPS Growth (3 Yr) 9.8% 15.8%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2023)
-5.11%
Alpha
0.96
Beta
87.19%
Upside Capture
113.28%
Downside Capture
-0.17
Sharpe Ratio
-0.88
Information Ratio
6.29%
Tracking Error
87.19

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 08/31/2023)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.2
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.5
PT Bank Rakyat Indonesia Persero Tbk Financials Indonesia 2.4
HDFC Bank, Ltd. Financials India 2.3
ITOCHU Corp. Industrials Japan 2.2
Ampol, Ltd. Energy Australia 2.2
Samsung Electronics Co., Ltd. Information Technology South Korea 2.1
AIA Group, Ltd. Financials China/Hong Kong 2.1
ORIX Corp. Financials Japan 2.1
SK Telecom Co., Ltd. Communication Services South Korea 2.1
TOTAL 24.2

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 06/30/2023)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 19.2 18.9 0.3
Information Technology 17.1 18.4 -1.3
Consumer Discretionary 13.9 14.7 -0.8
Communication Services 11.7 8.1 3.6
Industrials 10.0 12.5 -2.5
Consumer Staples 9.3 5.6 3.7
Real Estate 4.7 3.4 1.3
Health Care 4.3 6.4 -2.1
Materials 3.6 7.2 -3.6
Utilities 2.5 2.0 0.5
Energy 1.9 2.9 -1.0
Cash and Other Assets, Less Liabilities 1.9 0.0 1.9

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

Country Fund Benchmark Difference
Japan 31.5 33.3 -1.8
China/Hong Kong 25.6 22.5 3.1
Australia 9.7 10.9 -1.2
Taiwan 8.1 9.9 -1.8
India 7.6 9.3 -1.7
South Korea 6.0 7.8 -1.8
Singapore 3.5 2.1 1.4
Indonesia 2.2 1.3 0.9
Vietnam 1.7 0.0 1.7
Thailand 1.5 1.2 0.3
Bangladesh 0.6 0.0 0.6
Malaysia 0.0 0.8 -0.8
Philippines 0.0 0.4 -0.4
New Zealand 0.0 0.3 -0.3
Macau 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 1.9 0.0 1.9

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

Asset Type Fund
Common Equities and ADRs 98.1
Cash and Other Assets, Less Liabilities 1.9
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 45.8 59.4 -13.6
Large Cap ($10B-$25B) 24.4 21.5 2.9
Mid Cap ($3B-$10B) 19.0 18.0 1.0
Small Cap (under $3B) 8.9 1.0 7.9
Cash and Other Assets, Less Liabilities 1.9 0.0 1.9

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)
06/27/2023 06/28/2023 $0.00000 $0.00000 $0.00000 $0.00000 0.0% N.A.
03/28/2023 03/29/2023 $0.04705 $0.00000 $0.00000 $0.04705 0.3% N.A.
12/13/2022 12/14/2022 $0.00642 $0.00000 $0.00000 $0.00642 0.0% N.A.
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.
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, 2023

For the first half of 2023, the Matthews Asia Dividend Fund returned 2.93% (Investor Class) and 2.97% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 6.35% over the same period. For the quarter ending June 30, 2023, the Fund returned 0.07% (Investor Class) and 0.07% (Institutional Class), while the benchmark returned 1.43%.

Market Environment:

2023 began with a continuation of the rally in Asian markets but a rally that quickly petered out. The remainder of the first half of the year saw a diverging performance across countries in the Asia Pacific region. Hopes for a rapid recovery in China post reopening were disappointed with relatively weak economic data and underwhelming stimulus measures. U.S.-China political tensions and the implementation of semiconductor trade sanctions by the U.S. also weighed on sentiment. This helped drive China/Hong Kong to be the third-weakest performing market during the period ahead of only Thailand and Malaysia. Conversely, technology-focused stocks boosted the markets of South Korea and Taiwan, driven by expectations of inventories clearing through the rest of the year as well as the long-term potential presented by artificial intelligence. Stocks in Japan rallied on continued corporate reform with capital return policies improving.

Performance Contributors and Detractors:

From a country perspective, the portfolio’s mild overweight and stock selection in China and Hong Kong was the biggest detractor to relative performance in the first half as slowing industrial output and disappointing retail sales, alongside disappointing stimulus and a prolonged property downturn, weighed on stocks. Stock selection was impacted particularly by weakness in select domestically focused businesses. In Japan, stock selection was also a large detractor as certain holdings in areas such as real estate fell. Turning to India, stock selection in what we deem to be a fairly expensive market hurt relative performance. On the flip side, stock selection in in Australia and Indonesia benefited performance, with gains in the commercial banking sector helping the latter.

From a sector perspective, stock selections within consumer discretionary, health care and industrials were big detractors from relative performance while selections in financials and IT were strong contributors.

At the individual holdings level, a number of the Fund’s largest detractors came from China. JD.com, a leading ecommerce player, China Tourism Group, a leading duty-free licensed operator, and Wuliangye Yibin, a prominent baijiu company, all slumped given an underwhelming consumer recovery post reopening. There are also concerns over increasing competition for JD.com and China Tourism in their respective sectors. Milkyway Chemical Supply Chain Service, a logistics and distribution company, fell on soft earnings as end markets were likely weaker than had been hoped. In contrast, some of the largest contributors to returns came from Japan, with semiconductor equipment manufacturer Disco benefiting from the strength in the broader IT sector and as certain end markets look to bottom out as well, with growth in areas such as power semiconductors. Trading company Itochu gained on robust earnings and an improving shareholder return policy.

Notable Portfolio Changes:

The portfolio had several changes during the quarter with alterations in both Japanese and Chinese holdings. We exited our holding in the health care sector in China where life science-service company Pharmaron Beijing has faced earnings challenges. In Japan, we sold real estate-services provider Katitas as a changing mix in its business model and a tax dispute are expected to weigh on margins in the medium term. We also exited precision machinery parts-distributor Misumi Group amid heightened competition in overseas markets.

These exits funded new positions including in Japanese telecom provider KDDI. The stock offers meaningful share buybacks, a healthy dividend yield of over 3% and a multi-decade track record of dividend increases. We believe that it may also benefit from reduced competition. We also initiated a position in Guangdong Investment, a utility company that is a leading provider of water to Hong Kong, given its relatively stable cash generating ability and 9% dividend yield. Elsewhere in Japan, Suzuki Motor was added to the portfolio. The company derives significant value from its stake in India’s leading auto producer, Maruti Suzuki India, that has a reasonable new-model cycle as well as solid growth prospects in the medium term on rising volumes. We believe the stock is attractively valued at around 5x EV/EBITDA and offering over a 2% dividend yield.

Outlook:

Fears of a global recession, geopolitics, and a spotty recovery in China continue to weigh on earnings growth expectations and sentiment for some of the Asian region. With a quick recovery delayed, markets await clarity from the government in China on how it can increase consumer confidence and stimulate private investment. However, this uncertainty may be being priced in as the MSCI China Index trades at a fairly low multiple of 9x forward P/E. Further, it should be remembered that a lack of inflationary pressure in China allows room for some policy easing. Elsewhere in the region, countries like India and Indonesia, continue to see consumer demand while the former can benefit from the relocation of supply chains. If China has been one of the more challenged markets in Asia then it is Japan that remains one of the brighter spots, supported by what may be a return in inflation and improving shareholder return policies that have attracted broader interest in equities.

At a micro level, valuations remain reasonable at around 13x 2023 earnings expectations for the Asia Pacific market, with growth anticipated to be somewhat muted this year before rebounding to double digit growth in 2024. We continue to prefer investing in companies that allow the portfolio to balance dividend yields with dividend growth, aiming to deliver solid total returns through the economic cycle. This is a strategy that we hope is reasonably placed against what remains an uncertain macroeconomic backdrop.

Dividend yield: A financial ratio that shows how much a company pays out in dividends each year relative to its share price.

Earnings growth: The change in a company’s reported net income over a period of time, such as from quarter to quarter or from year to year.

MSCI China Index: An index capturing large and mid cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listings, like ADRs. Currently the index includes Large Cap A and Mid Cap A shares represented at 20% of their free float-adjusted market capitalization.

Price-to-earnings (P/E) ratio: A valuation ratio of a company's current share price compared to its per-share earnings.

Top 10 holdings as of June 30, 2023. Current and future holdings are subject to change and risk. Dividends are not guaranteed and may fluctuate.

Average Annual Total Returns - MAPIX as of 06/30/2023
1YR 3YR 5YR 10YR Since Inception Inception Date
-4.65% -1.72% -1.46% 3.27% 6.17% 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 1.10%
Yields as of 06/30/2023
30-Day SEC Yield 1.90%
30-Day SEC Yield (excluding expense waiver) 1.90%
Dividend Yield 2.73%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 06/30/2023, 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.