02/19/1998
Inception Date
-11.51%
YTD Return
(as of 10/16/2026)
$15.23
NAV
(as of 10/16/2026)
-0.21
1 Day NAV Change
(as of 10/16/2026)
Long-term capital appreciation
Under normal circumstances, the Matthews China 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 China. 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.
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 markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
These and other risks associated with investing in the Fund can be found in the prospectus.
| Inception Date | 02/19/1998 | |
| Fund Assets | $359.92 million (09/30/2026) | |
| Currency | USD | |
| Ticker | MCHFX | |
| Cusip | 577-130-701 | |
| Benchmark | MSCI China Index MSCI China All Shares Index | |
| Geographic Focus | China - China includes its administrative and other districts, such as Hong Kong | |
| Gross Expense Ratio | 1.25% | |
| Objective | Long-term capital appreciation |
| Strategy | Under normal circumstances, the Matthews China Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in China. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. |
| Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
The risks associated with investing in the Fund can be found in the prospectus |
MSCI China Index since inception value calculated from 2/28/98.
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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.
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.
(as of 09/30/2026)
CATEGORY: Greater China Region
| OVERALL | 3 stars | out of 70 funds |
| 3 YEAR | 3 stars | out of 70 funds |
| 5 YEAR | 3 stars | out of 64 funds |
| 10 YEAR | 3 stars | out of 37 funds |
Ratings agency calculation methodology
Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.
The Overall Morningstar® Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings.
Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Portfolio Manager
Andrew Mattock is a Portfolio Manager at Matthews. Prior to joining the firm in 2015, he was a Fund Manager at Henderson Global Investors for 15 years, first in London and then in Singapore, managing Asia Pacific equities. Andrew holds a Bachelor of Business majoring in Accounting from ACU. He began his career at PricewaterhouseCoopers and qualified as a Chartered Accountant.
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Investor share class.
Source: FactSet Research Systems
Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.
Source: BNY Mellon Investment Servicing (US) Inc.
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
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.
Visit our Glossary of Terms page for definitions and additional information.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI Emerging Markets (EM) Asia Index is a free float-adjusted market capitalization weighted index of the stock markets of China, India, Indonesia, Malaysia, Pakistan, Philippines, South Korea, Taiwan and Thailand. The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The Korea Composite Stock Price Index (KOSPI) is a market capitalization–weighted index of all common stocks listed on the Korea Stock Exchange.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
The MSCI Korea Index is a free float-adjusted market capitalization-weighted index of Korean equities listed in Korea.
The MSCI Korea 25/50 Index is designed to measure the performance of the large and mid cap segments of the Korean market. It applies certain investment limits that are imposed on regulated investment companies, or RICs, under the current US Internal Revenue Code.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
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.
Commentary
Period ended September 30, 2026
Summary
Market Environment
Hong Kong and mainland Chinese equities delivered mixed results during the third quarter. Market sentiment weakened as the AI hardware trade reversed amid higher interest rates and continued geopolitical uncertainty. Areas that had produced strong gains earlier in the year, particularly parts of the technology sector, experienced increased profit-taking as investors focused more closely on earnings durability, valuations and domestic economic conditions.
Technology remained an important influence on returns, but market leadership broadened during the quarter, with investors placing greater emphasis on earnings quality, balance-sheet strength and company-specific execution across a wider range of sectors. Financials, Health Care and select Materials companies generally held up better than many higher-growth technology businesses that had led earlier in the year.
A constructive tone around trade and AI cooperation at the September meeting between the U.S. and Chinese presidents provided some support, although uncertainty over semiconductor export restrictions persisted.
China's economic backdrop remained mixed. Domestic policy support, including its first nationwide mortgage-interest subsidy for first-time homebuyers and other targeted measures, offered some encouragement but activity remained uneven across sectors and investor sentiment stayed cautious.
Ahead of third-quarter earnings, we believe many investors may be underestimating the earnings resilience of businesses with strong competitive positions, healthy balance sheets, and the ability to gain market share in a slower-growth environment.
Performance
For the quarter ended September 30, 2026, the Matthews China Fund returned -7.71% (Investor Class) while it’s benchmark, the MSCI China Index, returned 3.72% over the same period. At the sector level, Health Care, Materials and Communication Services contributed positively to relative performance, while Information Technology, Industrials and Financials detracted.
Health Care and Materials
Health Care was a leading source of relative performance, supported by GenScript Biotech and WuXi AppTec. GenScript benefited from progress involving its biologics services business and continued development of its drug-discovery platform, while WuXi AppTec gained on a more constructive earnings outlook for its pharmaceutical and biotechnology services operations. Materials also contributed positively, reflecting favorable results from selected holdings and a more supportive backdrop for parts of the metals and mining complex.
Information Technology and Industrials
Information Technology was the largest detractor as the reversal in AI hardware shares prompted a broad rotation away from higher-multiple semiconductor and electronics companies. Fabless semiconductor company GigaDevice Semiconductor was among the largest detractors as investors reassessed the sustainability of the memory-pricing cycle. Industrials also detracted, including Jiangsu Zhongtian Technology, a Chinese industrial and technology company best known for its fiber-optic cables, power transmission equipment, submarine cables, and renewable energy infrastructure, as shares declined amid greater caution toward cyclical growth and capital-spending expectations.
Other Contributors and Detractors
China Construction Bank, one of China's largest state-owned commercial banks, was among the leading contributors, supported by improving operating trends and a more stable outlook for net interest margins. Kingboard Holdings, manufacturer of copper-clad laminates used in printed circuit boards, was amongst the largest detractors asweaker sentiment toward technology-related materials and cyclical demand weighed on the shares following earlier gains. Overall, the quarter reflected a shift in market leadership and valuation expectations rather than a uniform deterioration in company fundamentals.
Positioning
Portfolio changes were measured and remained consistent with the Fund's diversified, all-share approach to China. Exposure was reduced in areas where valuations had become less attractive following strong gains, and capital was reallocated toward companies offering a more compelling balance of earnings growth, business quality and valuation. The adjustments reflected bottom-up security selection rather than broad sector calls.
We increased exposure to Financials given attractive valuations, improving shareholder returns and more supportive earnings prospects across banks, insurers and securities companies.
Information Technology exposure declined as selected semiconductor, electronics and optical-communications holdings were reduced following strong earlier performance and less compelling valuations. Technology remains an important portfolio allocation, but the adjustments reflect greater valuation discipline after an extended period of strength in AI-related businesses.
Health Care exposure increased, reflecting greater conviction in biotechnology and pharmaceutical companies with improving research pipelines, commercial execution and global licensing prospects. Consumer Discretionary also increased, with additions focused on internet platforms, e-commerce businesses and consumer companies offering attractive valuations and improving competitive positions. Within the Consumer Discretionary sector, we initiated a position in BYD which specializes in new energy vehicles (NEVs), rechargeable batteries, electronics, and renewable energy.
Outlook
We remain constructive on the long-term opportunity in Chinese equities. The recent correction has improved valuations across several sectors, although near-term sentiment is likely to remain sensitive to geopolitical developments, policy uncertainty and uneven domestic demand. We expect market leadership to continue evolving as investors respond to company earnings, policy developments and changing economic conditions.
The macroeconomic backdrop remains mixed. Consumer confidence and property activity are recovering gradually and unevenly, while the late-September stimulus package was broadly seen as designed to keep economic growth on target rather than driving a broad demand revival in demand, leaving investors waiting for more forceful intervention to address underlying demand weakness. However, exports, industrial production and selected areas of manufacturing remained more resilient alongside improving purchasing managers’ indices (PMIs) at the end of September, offering a more constructive near-term encouragement.
We continue to find attractive opportunities across Financials, Health Care, Consumer Discretionary, Materials and Information Technology sectors. In our view, Financials and Health Care sectors are increasingly important sources of investment ideas, while select technology, consumer and industrial businesses continue to offer attractive long-term growth opportunities. The breadth of the opportunity set supports a diversified approach rather than reliance on a single sector or theme in our view.
The portfolio remains focused on companies with strong competitive positions, improving earnings prospects and valuations that offer support relative to long-term growth potential. By combining long-term quality-growth holdings with selected cyclical-growth opportunities, we believe the Fund is positioned to navigate changing market conditions while participating in the continued evolution of China's equity markets.
View the Fund's Top 10 holdings as of September 30, 2026. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MCHFX as of 09/30/2026
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
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 markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.