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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

-23.92%

YTD Return

(as of 07/01/2022)

$14.33

Price

(as of 07/01/2022)

$3.18 billion

Fund Assets

(as of 05/31/2022)

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 $3.18 billion (05/31/2022)
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 05/31/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
0.47% -12.31% -21.25% -24.85% 3.55% 2.19% 6.28% 7.18% 10/31/2006
MSCI All Country Asia Pacific Index
0.65% -6.30% -11.37% -16.93% 6.24% 4.80% 6.97% 4.30%
As of 03/31/2022
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
-5.82% -15.42% -15.42% -16.12% 3.85% 4.77% 6.31% 7.76% 10/31/2006
MSCI All Country Asia Pacific Index
-0.53% -5.91% -5.91% -9.22% 6.80% 6.94% 6.41% 4.75%
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 03/31/2022)

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 03/31/2022)
1.05% 30-Day SEC Yield
1.05% 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 98 funds
  • 3 YEAR
  • 4th
  • 87 out of 97 funds
  • 5 YEAR
  • 3rd
  • 52 out of 88 funds
  • 10 YEAR
  • 1st
  • 8 out of 49 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 03/31/2022)
Fund Benchmark
Number of Positions 59 1,546
Weighted Average Market Cap $63.0 billion $99.4 billion
Active Share 88.0 n.a.
P/E using FY1 estimates 15.1x 13.0x
P/E using FY2 estimates 13.3x 12.2x
Price/Cash Flow 10.5 9.0
Price/Book 2.1 1.6
Return On Equity 17.2 14.1
EPS Growth (3 Yr) 1.8% 7.2%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 03/31/2022)
-2.48%
Alpha
0.98
Beta
92.74%
Upside Capture
106.58%
Downside Capture
0.19
Sharpe Ratio
-0.45
Information Ratio
6.55%
Tracking Error
83.41

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 05/31/2022)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 4.7
Minda Industries, Ltd. Consumer Discretionary India 4.3
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.0
Tencent Holdings, Ltd. Communication Services China/Hong Kong 3.8
Breville Group, Ltd. Consumer Discretionary Australia 2.9
KATITAS Co., Ltd. Real Estate Japan 2.7
PT Bank Rakyat Indonesia Persero Financials Indonesia 2.5
Pharmaron Beijing Co., Ltd. Health Care China/Hong Kong 2.4
Baidu, Inc. Communication Services China/Hong Kong 2.4
Asia Commercial Bank JSC Financials Vietnam 2.3
TOTAL 32.0

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 03/31/2022)
  • 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 94.1
Preferred Equities 1.9
Cash and Other Assets, Less Liabilities 4.1

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)
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 March 31, 2022

For the quarter ending March 31, 2022, the Matthews Asia Dividend Fund returned -15.42% (Investor Class) and -15.38% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -5.91% over the same period.

Market Environment:

The first quarter of 2022 was choppy for Asian equity markets, weighed down by the spillover from the U.S. Fed’s monetary tightening, continued regulatory pressure on Chinese internet companies, economic headwinds from the Russia/Ukraine conflict and China’s zero-COVID policy. Southeast Asian equities were a bright spot during the quarter, driven by market optimism regarding economic normalization and the re-opening of country borders in the region. Among Southeast Asia, Indonesia was the best performing market, with additional help from rising commodity prices. China was the worst performer, amid worries about regulatory risks and the economic consequences of its draconian COVID-related lock-down measures in several major cities. Japanese stocks struggled during the quarter, a victim of rising interest rates in the U.S., as the Japanese yen weakened substantially with the widening U.S. – Japan interest rate differential. Overall, Asian growth stocks performed poorly during the quarter on the back of rising U.S. interest rates and perceived headwinds relating to higher import costs.

Performance Contributors and Detractors:

On a country basis, our stock selection in China and Japan detracted the most from relative performance during the period. Holdings in dividend growth stocks in these two markets experienced a sharp valuation contraction, as tightening U.S. monetary policy and geopolitical uncertainties caused significant disruption to growth equities. On the other hand, our allocation to Vietnam (which is not represented in the benchmark) contributed positively to relative performance, led by strong share performance of IT service company FPT Corporation.

From a sector perspective, stock selection within consumer discretionary detracted the most from relative performance, as the portfolio’s holdings in auto parts companies struggled, weighed down by a dampened profit margin outlook due to the sharp commodity price spike experienced since the onset of the Russia/Ukraine military conflict.

Turning to individual stocks, our long-time holding in Chinese auto body parts manufacturer Minth Group sharply declined, and was the biggest detractor to performance in the quarter. The rapid rise in aluminum and plastics prices after the Russian invasion of Ukraine posed challenges for Minth to pass through cost increases to its customers on a timely basis. Also, further disruption of Minth’s logistics network, prolonged semiconductor chip shortages due to geopolitical events and China’s recent Covid outbreak negatively impacted global auto manufacturing production and Minth’s near-term business growth. Nevertheless, we believe Minth’s market positioning remains favorable in the electric vehicle supply chain in the medium term, as exemplified by its strong order growth from global car manufacturers for its products used in electric vehicles. The company’s planned A-share listing in the near future may provide additional capital for future growth as well.

On the positive side, our holding in Bank Rakyat, a leading Indonesian financial services company, was the top contributor to absolute performance in the quarter. Similar to many other countries in Asia, Indonesia’s economy has gradually reopened and resumed normal business activities, benefiting loan growth and asset quality at the bank.

Notable Portfolio Changes:

During the quarter, we increased our allocation to the financials sector by adding commercial banking businesses in developed Asia, where local monetary policy is more closely following the U.S. rate-hike cycle. These include United Overseas Bank (UOB) in Singapore and CTBC Financial Holding in Taiwan. In addition to U.S. rate sensitivity, UOB benefited from its strong franchise in wealth management for clients in the region and CTBC enjoyed a tailwind from Taiwanese corporates’ capital investment needs overseas, which was fueled by demand for semiconductors and technology products globally.

Also, we increased exposure to “re-opening” businesses, as more Asian economies are moving from a pandemic control phase into a “live with COVID-19” endemic phase. One example is our new position in Bangkok Dusit Medical Services, a premium hospital operator in Thailand. The company’s earnings growth is expected to pick up pace on the back of normalization of non-Covid medical operations and the recovery of medical tourism in Thailand.

Lastly, we’ve sought to upgrade the quality of holdings in dividend growth stocks, as the growth-to-value rotation offered opportunities to own certain structural-growth businesses at much reduced valuation multiples—but with their long-term growth outlook intact. To fund these new positions, we exited a few stocks in the consumer discretionary and technology sectors whose underlying fundamentals, in our view, no longer represented the best risk-reward opportunities.

Outlook:

While the U.S. monetary tightening cycle was expected by market participants, renewed concerns on growth both in the U.S. and Asia are headwinds facing Asian equities at the moment. The prospect of a protracted war between Russia and Ukraine further exacerbates near-term market volatility and risks of elevated commodity prices and crippled supply chains.

In particular, China’s continued implementation of its zero-COVID policy to battle the current Omicron surge has taken a toll on its economy, and as a result, corporate earnings and supply chain throughput could face downward pressure. China’s policy makers have been launching a series of economic stimulus policies to counter the effects of COVID measures, and we expect such policy accommodation to accelerate in an effort to put a floor to growth. We also observe more supportive stances taken by Chinese policy makers on private enterprises, capital markets and cooperation with U.S. regulators on overseas listings.

Going forward, we are looking for businesses with a strong ability to fend off inflation cost pressures, maintain their earnings and dividend growth outlook, and that are potential beneficiaries from a stronger policy response from China, including an easing of regulatory uncertainties.

 

View the Fund’s Top 10 holdings as of March 31, 2022. 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 03/31/2022
1YR 3YR 5YR 10YR Since Inception Inception Date
-16.12% 3.85% 4.77% 6.31% 7.76% 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 03/31/2022
30-Day SEC Yield 1.05%
30-Day SEC Yield (excluding expense waiver) 1.05%
Dividend Yield 2.12%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 03/31/2022, 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.