10/31/2005
Inception Date
2.40%
YTD Return
(as of 01/19/2021)
$26.92
Price
(as of 01/19/2021)
$707.96 million
Fund Assets
(as of 12/31/2020)
Long-term capital appreciation
Under normal circumstances, the Matthews India Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in publicly traded common stocks, preferred stocks and convertible securities of companies located in India. 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, investments in a single-country fund, which is considered a non-diversified fund, may be subject to a higher degree of market risk than diversified funds because of concentration in a specific country.
The risks associated with investing in the Fund can be found in the prospectus.
| Inception Date | 10/31/2005 | |
| Fund Assets | $707.96 million (12/31/2020) | |
| Currency | USD | |
| Ticker | MINDX | |
| Cusip | 577-130-859 | |
| Portfolio Turnover | 24.00% | |
| Benchmark | S&P Bombay Stock Exchange 100 Index | |
| Geographic Focus | India | |
| Gross Expense Ratio | 1.11% | |
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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.
Ratings (as of 12/31/2020)
CATEGORY: India Equity
Quartile & Rankings (as of 12/31/2020)
CATEGORY: India Region 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.
Lipper Analytical Services, Inc., rankings are based on total return, including reinvestment of dividends and capital gains for the stated periods. Funds are assigned a rank within a universe of funds similar in investment objective as determined by Lipper. For the absolute rankings shown the lower the number rank, the better the Fund performed compared to other funds in the classification group. Lipper also calculates a quartile ranking which divides the peer group into quartiles to identify funds of similar quality. Funds in the 1st or 2nd quartile had outperformed the average fund in the peer group while funds in the 3rd or 4th quartile had underperformed.
Lead Manager
Portfolio Manager
Peeyush Mittal is a Portfolio Manager at Matthews Asia and manages the firm's India Strategy. Prior to joining the firm in 2015, he spent over three years at Franklin Templeton Asset Management India, most recently as a Senior Research Analyst. Previously, he was with Deutsche Asset & Wealth Management New York, from 2009 to 2011, researching U.S. and European stocks in the industrials and materials sectors. Peeyush began his career in 2003 with Scot Forge as an Industrial Engineer, and was responsible for implementing Lean Manufacturing systems on the production shop floor. Peeyush earned his M.B.A from The University of Chicago Booth School of Business. He received a Master of Science in Industrial Engineering from The Ohio State University and received a Bachelor of Technology in Metallurgical Engineering from The Indian Institute of Technology Madras. He is fluent in Hindi.
Co-Manager
Portfolio Manager
Sharat Shroff is a Portfolio Manager at Matthews Asia and manages the firm's Pacific Tiger Strategy and co-manages the India Strategy. Prior to joining the firm in 2005 as a Research Analyst, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology from the Institute of Technology in Varanasi, India and an MBA from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.
Source: BNY Mellon Investment Servicing (US) Inc.
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.
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 Markit iBoxx Asian Local Bond Index tracks the total return performance of a bond portfolio consisting of local-currency denominated, high quality and liquid bonds in Asia ex-Japan. The Markit iBoxx Asian Local Bond Index includes bonds from the following countries: China (on- and offshore markets), Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.
The J.P. Morgan Asia Credit Index (JACI) tracks the total return performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and is partitioned by country, sector and credit rating. JACI includes bonds from the following countries: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand.
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 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 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, 2020
For the quarter ending Sept. 30, 2020, the Matthews India Fund returned 18.54% (Investor Class) and 18.63% (Institutional Class), while its benchmark, the S&P Bombay Stock Exchange 100 Index returned 12.93%.
Market Environment:
Indian equities were some of the strongest regional performers across Asia in the third quarter, following similar results in the prior quarter. India’s stock markets performed well, despite the elevated daily COVID-19 infection rates. Easing of restrictions on social and commercial activities continued through the quarter albeit with intermittent and localized lockdowns in some cities. Economic activity has continued to improve through the quarter with many industries reporting near normal demand, particularly in the month of September. Rural demand has remained robust on back of another better-than-normal monsoon season for second year in row. Visibility of good harvest is buoying demand for consumer durables, which was otherwise hurt by weak urban demand after COVID related lockdowns were imposed. However, a weak fiscal position on back of lackluster tax collection has kept the government from boosting fiscal spending and has also pushed them to raise taxes on gasoline and diesel. Higher fuel prices have resulted as consequence of higher taxes. While interest rates have inched higher, core inflation remains broadly in check.
Performance Contributors and Detractors:
Stock selection among small-cap stocks, as well as a notable overweight to small caps, was a major contributor to relative performance in the quarter. In particular, small-cap health care names such as Laurus Labs and Caplin Point Laboratories generated strong gains, illustrating the evolution of India’s health care sector toward more innovative business models. Among individual securities, mid-cap financials company Bandhan Bank detracted from performance, as Indian financials continued to wrestle with the economic impacts of the COVID-19 pandemic. The company remains well capitalized and we continue to like its long-term prospects.
From a sector perspective, health care and consumer staples sectors were contributors in the quarter, driven by strong stock selection. On the other hand, the Fund’s underweight and stock selection in the materials sector was a slight detractor from relative performance. We tend to have smaller positions and engage very selectively in this highly cyclical sector.
Notable Portfolio Changes:
During the quarter, we were very active in adding new positions to the portfolio, taking advantage of market dynamics to invest in faster growing investment opportunities at relatively attractive valuations. As consumers are spending more time at home, it is our belief that greater domestic consumption spend would happen in improving personal living spaces and quality of life. As such, we initiated positions in Asian Paints and Whirlpool of India during the quarter. We also think real estate, construction activity will revive given government incentives and initiated positions in Pidilite Industries.
Meanwhile, we exited investments in Baja Consumer Care and ITC Limited where the visibility of growth was lacking and where we thought management incentives were not aligned to minority shareholders. We also exited positions that had done very well in last six to nine months but where we thought valuations left little room for error, such as Alembic Pharmaceutical.
Outlook:
Recent data on a reduction in COVID-19 cases over last few weeks leads us to believe that India’s economy may be on a path to recovery, although we can’t predict the pace or timing of recovery. In our view, the pandemic has provided a jolt that is likely to reset global supply chains across different industries, which may benefit Indian companies. We are already witnessing positive pick up in export demand for many industries, including ancillary automotive sectors, pharmaceuticals, chemicals, tiles, electronics, white goods outsourcing and textiles. Recent changes to labor laws in India are aimed at easing the legal and regulatory burden on foreign companies and will help improve ‘ease of doing business’ in India over the long term. As India’s domestic demand normalizes and export demands picks up further legs, we are hopeful the economy will likely grow in line with historical levels over longer timer periods. The month of September also saw a normalization of tax receipts, which could help improve India’s fiscal position over time if the trend continues.
As of 09/30/2020, the securities mentioned comprised the Matthews India Fund in the following percentages: Laurus Labs, Ltd., 1.5%; Caplin Point Laboratories, Ltd., 1.0%; Bandhan Bank, Ltd., 2.4%; Asian Paints, Ltd., 1.1%; Whirlpool of India, Ltd., 0.8%; Pidilite Industries, Ltd., 1.1%. The Fund held no positions in Baja Consumer Care, ITC Limited and Alembic Pharmaceutical. Current and future portfolio holdings are subject to change and risk.
Average Annual Total Returns - MINDX as of 12/31/2020
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. Please see the Fund's most recent month-end performance.
Fees & Expenses