TOP
Asia Growth & Income

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

-1.43%

YTD Return

(as of 01/14/2022)

$18.67

Price

(as of 01/14/2022)

$4.74 billion

Fund Assets

(as of 12/31/2021)

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 $4.74 billion (12/31/2021)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 37.7%
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
  • data_graph_selected Created with Sketch.
  • bar_graph_selected Created with Sketch.
As of 12/31/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
0.09% -2.42% -2.83% -2.83% 12.34% 10.76% 9.29% 9.09% 10/31/2006
MSCI All Country Asia Pacific Index
1.93% -1.80% -1.19% -1.19% 12.41% 10.23% 8.29% 5.25%
As of 12/31/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
0.09% -2.42% -2.83% -2.83% 12.34% 10.76% 9.29% 9.09% 10/31/2006
MSCI All Country Asia Pacific Index
1.93% -1.80% -1.19% -1.19% 12.41% 10.23% 8.29% 5.25%
For the years ended December 31st
Name 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
Matthews Asia Dividend Fund
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 12/31/2021)

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 12/31/2021)
0.73% 30-Day SEC Yield
0.73% 30-Day SEC Yield (excluding expense waiver)
1.83% 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
  • 99 out of 99 funds
  • 3 YEAR
  • 2nd
  • 34 out of 97 funds
  • 5 YEAR
  • 1st
  • 9 out of 88 funds
  • 10 YEAR
  • 1st
  • 3 out of 48 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 23 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 12/31/2021)
Fund Benchmark
Number of Positions 57 1,541
Weighted Average Market Cap $57.2 billion $108.7 billion
Active Share 92.3 n.a.
P/E using FY1 estimates 16.5x 14.2x
P/E using FY2 estimates 15.9x 13.7x
Price/Cash Flow 14.2 10.4
Price/Book 2.3 1.7
Return On Equity 14.8 12.9
EPS Growth (3 Yr) 0.9% -5.0%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 09/30/2021)
1.04%
Alpha
0.94
Beta
92.93%
Upside Capture
90.95%
Downside Capture
0.50
Sharpe Ratio
0.10
Information Ratio
5.83%
Tracking Error
87.68

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 12/31/2021)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 5.7
Minda Industries, Ltd. Consumer Discretionary India 4.6
Tencent Holdings, Ltd. Communication Services China/Hong Kong 3.8
KATITAS Co., Ltd. Real Estate Japan 3.4
Breville Group, Ltd. Consumer Discretionary Australia 3.4
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 3.3
MISUMI Group, Inc. Industrials Japan 2.9
IDP Education, Ltd. Consumer Discretionary Australia 2.7
Link REIT Real Estate China/Hong Kong 2.6
Globe Telecom, Inc. Communication Services Philippines 2.3
TOTAL 34.7

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 12/31/2021)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure

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

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

Asset Type Fund
Common Equities and ADRs 95.8
Preferred Equities 2.1
Cash and Other Assets, Less Liabilities 2.1

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)
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.
09/28/2020 09/29/2020 $0.05819 $0.00000 $0.00000 $0.05819 0.3% N.A.
06/24/2020 06/25/2020 $0.12004 $0.00000 $0.00000 $0.12004 0.7% N.A.
03/25/2020 03/26/2020 $0.04406 $0.00000 $0.00000 $0.04406 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 December 31, 2021

For the year ending December 31, 2021, the Matthews Asia Dividend Fund returned -2.83% (Investor Class) and -2.67% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -1.19% over the same period. For the fourth quarter of the year, the Fund returned -2.42% (Investor Class) and -2.40% (Institutional Class), while the benchmark returned -1.80%.

Market Environment:

Asian equities faced several macro headwinds in 2021, with the MSCI All Country Asia Pacific Index unable to deliver a positive return for the year. Market concerns that central banks may start a monetary tightening cycle to combat rapidly rising inflation put downward pressure on equity prices. A slowing Chinese economy, coupled with its regulatory tightening and real estate clampdown, added further uncertainties. Among major markets in Asia, India and Taiwan were top performers, as Indian equities benefited from a relatively easing domestic liquidity environment and Taiwan’s tech-heavy economy benefited from a sustained global demand recovery for technology products. On the other hand, Chinese stocks were the worse-performing market. In addition to the macro challenges, the potential delisting of Chinese ADRs (American Depositary Receipts) from U.S. capital markets triggered a massive sell-off of overseas-listed Chinese equities during the year-end period. As investors were recalibrating against a potential monetary regime change, markets also witnessed a significant style rotation, as growth stocks sold off, underperforming value and cyclical stocks.

Contributor and Detractors: 

From a country perspective, the portfolio’s underweight allocation to Taiwan was a significant detractor from relative performance for the year. Additionally, the portfolio’s stock selection in Japan detracted, as certain holdings, including a 5G testing equipment company and a factory and logistics automation company, were hurt by component shortages in their respective supply chains. On the other hand, stock selection in India and Australia contributed the most to relative performance in 2021.

From a sector perspective, stock selection in the information technology sector detracted the most from relative performance. Our preference for technology companies in the industrial supply chain over the semiconductor equipment space during the period hurt our relative performance. On the other hand, stock selection in the consumer discretionary sector added the most to relative performance. The portfolio has several holdings with solid sales growth driven by the global consumption rebound, while maintaining low exposure to Chinese internet and e-commerce players during the period.

Turning to individual stocks, Minda Industries, an Indian auto-parts business, was the top-performing stock for the year. Minda has been expanding its component business with an increased focus on the emerging vehicle electrification trends in both two-wheel and four-wheel segments in India. A positive recovery of the underlying Indian market and the structural growth potential from its electrical vehicle component business initiatives drove Minda’s share price significantly higher.

On the flip side, our position in Chinese IVF (in-vitro fertilization) specialist Jinxin Fertility Group was the top detractor to absolute performance for the year. With clinic assets in both China and overseas markets, Jinxin’s underlying IVF business was heavily impacted by the prolonged disruption of the COVID-19 pandemic. In addition, the regulatory tightening targeting the health care sector in China also raised investors’ concern that medical services businesses such as Jinxin could be affected by a reduction in pricing power. With a delay in turnaround of the business fundamentals and weakened sentiment towards the sector, Jinxin’s share price moved markedly lower.

Notable Portfolio Changes:

Throughout the year we adopted a barbell approach, balancing higher dividend-yielding stocks with structural dividend growers. During the quarter, we increased holdings in companies that demonstrated strong pricing power and resilient market share in an inflationary environment. Among the additions was Inner Mongolia Yili Industrial Group, the largest dairy company in China. We expect the company to see improved profitability in 2022 with recent price hikes, product upgrades and a benign competitive environment. Consumers’ rising awareness of the health benefits of high-quality dairy products during the pandemic has been a tailwind for Yili’s sales growth and we believe this trend will continue.

On the other hand, we exited several holdings during the quarter, including some dividend growth stocks whose underlying fundamentals no longer met our dividend growth expectation. One such name was Hugel Inc., a leading South Korean biopharmaceutical company that specializes in aesthetics-based treatments. During the quarter, South Korea’s Ministry of Food and Drug Safety made an unexpected announcement that Hugel violated certain domestic shipment clearance regulations. As a result we exited the position, as the new uncertainty on Hugel’s licenses in various markets disproved our original investment thesis.

Outlook:

Looking ahead, we expect some of the macro headwinds experienced in 2021 to lessen in 2022. Despite the current surge of the latest COVID-19 virus variant globally, vaccines have proven effective in preventing or lessening severe illness and death. As Asian countries continue to ramp up vaccination efforts, a potential “return to normalcy” at some point this year could bring out pent-up demand for consumption and corporate investment. Supply-chain bottlenecks could start to ease as well.

On the policy front, China has reached an inflection point in its monetary and fiscal policies, moving to provide more support for its economy. The Regional Comprehensive Economic Partnership (RCEP), an all-important trade agreement signed by 15 Asia Pacific economies, went into effect on January 1, 2022. We believe further economic integration under RCEP bodes well for the region’s long-term growth outlook. While recent market volatility was triggered by concerns of an accelerated tightening cycle by the U.S. Federal Reserve, we believe that investors will shift their focus back to companies’ fundamentals and their ability to deliver earnings growth, once the inflation expectation is re-set. Against such backdrop, we believe it is prudent to maintain an overall balance between structural dividend growers and high-yielding dividend payers whose business can benefit within an inflationary environment.

As of December 31, 2021, the securities mentioned comprised the Matthews Asia Dividend Fund in the following percentages: Minda Industries, Ltd., 4.6%: Jinxin Fertility Group, 0.2%; and Inner Mongolia Yili Industrial Group, 1.0%. The Fund held no position in Hugel Inc.

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 12/31/2021
1YR 3YR 5YR 10YR Since Inception Inception Date
-2.83% 12.34% 10.76% 9.29% 9.09% 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, 2022. Please see the Fund’s prospectus for additional details.

Yields as of 12/31/2021
30-Day SEC Yield 0.73%
30-Day SEC Yield (excluding expense waiver) 0.73%
Dividend Yield 1.83%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 12/31/2021, 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.