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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

-1.58%

YTD Return

(as of 07/30/2021)

$22.15

Price

(as of 07/30/2021)

$5.72 billion

Fund Assets

(as of 06/30/2021)

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.

The risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 10/31/2006
Fund Assets $5.72 billion (06/30/2021)
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
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As of 06/30/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
0.71% 4.68% 2.55% 38.22% 10.59% 11.46% 8.60% 9.82% 10/31/2006
MSCI All Country Asia Pacific Index
-0.27% 2.66% 5.14% 34.71% 10.66% 12.94% 7.28% 5.88%
As of 06/30/2021
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund
MAPIX
0.71% 4.68% 2.55% 38.22% 10.59% 11.46% 8.60% 9.82% 10/31/2006
MSCI All Country Asia Pacific Index
-0.27% 2.66% 5.14% 34.71% 10.66% 12.94% 7.28% 5.88%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Asia Dividend Fund
MAPIX
31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32% 11.27% 21.63% -10.02%
MSCI All Country Asia Pacific Index
20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19% 17.05% -14.92%

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 06/30/2021)

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 06/30/2021)
0.72% 30-Day SEC Yield
0.71% 30-Day SEC Yield (excluding expense waiver)
1.78% Dividend Yield

30-Day SEC Yield Source: BNY Mellon Investment Servicing (US) Inc.

Ratings

  • OVERALL
  • out of 11 funds
  • 3 YEAR
  • out of 11 funds
  • 5 YEAR
  • out of 11 funds
  • 1 YEAR
  • 1st
  • 13 out of 98 funds
  • 3 YEAR
  • 1st
  • 12 out of 95 funds
  • 5 YEAR
  • 1st
  • 7 out of 86 funds
  • 10 YEAR
  • 1st
  • 3 out of 45 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 22 funds

Ratings agency calculation methodology

Portfolio Managers

Yu  Zhang, CFA photo
Yu Zhang, CFA

Lead Manager

Robert J. Horrocks, PhD photo
Sherwood  Zhang, CFA photo
Sherwood Zhang, CFA

Co-Manager

S. Joyce Li, CFA photo
S. Joyce Li, CFA

Co-Manager

Portfolio Characteristics

(as of 06/30/2021)
Fund Benchmark
Number of Positions 65 1,547
Weighted Average Market Cap $83.3 billion $130.6 billion
Active Share 87.5 n.a.
P/E using FY1 estimates 17.4x 15.5x
P/E using FY2 estimates 15.7x 14.4x
Price/Cash Flow 12.2 10.6
Price/Book 2.1 1.9
Return On Equity 13.4 12.2
EPS Growth (3 Yr) 4.4% 8.0%

Sources: BNY Mellon Investment Servicing (US) Inc., Factset Research Systems, Inc., Zephyr StyleADVISOR, Matthews Asia

Top 10 Holdings

(as of 06/30/2021)
Name Sector Country % Net Assets
Minth Group, Ltd. Consumer Discretionary China/Hong Kong 5.1
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.7
Pharmaron Beijing Co., Ltd. Health Care China/Hong Kong 3.0
Breville Group, Ltd. Consumer Discretionary Australia 2.9
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.9
LG Chem, Ltd., Pfd. Materials South Korea 2.8
Shenzhou International Group Holdings, Ltd. Consumer Discretionary China/Hong Kong 2.2
Link REIT Real Estate China/Hong Kong 2.2
OPT Machine Vision Tech Co., Ltd. Information Technology China/Hong Kong 2.2
Lixil Corp. Industrials Japan 2.1
TOTAL 30.1

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 06/30/2021)
  • 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 92.6
Preferred Equities 4.7
Cash and Other Assets, Less Liabilities 2.7

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)
06/28/2021 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 June 30, 2021

For the first half of 2021, the Matthews Asia Dividend Fund returned 2.55% (Investor Class) and 2.66% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 5.14% over the same period. For the quarter ending June 30, the Fund returned 4.68% (Investor Class) and 4.77% (Institutional Class), while the benchmark returned 2.66%.

Market Environment:

The first half of 2021 was positive for Asia, led by India and Taiwan. A semi-synchronized global economic recovery gained momentum throughout the period providing support to cyclically oriented names, despite interruption from waves of COVID-19 resurgence. South Korean equities also performed strongly in the first half of 2021. A combination of low valuations and a cyclical recovery in earnings coming out of the COVID-19 pandemic has proven to be a confluence of upside catalysts. Meanwhile, Japan and most of ASEAN (Association of South East Asian Nations) markets were lackluster. Japan’s equity market experienced strong factor rotation from growth to value in the first quarter.

Performance Contributors and Detractors:

During the first half of 2021, Japan detracted the most from the Fund’s relative performance. Several of our Japanese dividend growth stocks, after a strong run in 2020, underperformed during the growth to value rotation seen in the first quarter. On the other hand, Vietnam was the top contributor to relative performance in the first half of 2021. During the COVID-fear induced market selloff earlier this year, we initiated positions in several Vietnamese stocks, including within the banking, real estate, consumer staples and materials sectors. These Vietnamese stocks, each a leader in its respective industry, bounced back strongly during the second quarter once the market digested the COVID situation and re-focused on the companies’ long-term structural growth strength.

From a sector perspective, stock selection in industrials detracted the most from relative performance, as the resurgence of COVID cases in the region delayed the recovery pace for our holdings in infrastructure asset businesses, including toll road and airport. On the other hand, stock selection in health care and material companies added most to relative performance.

By individual securities, the two largest detractors to Fund performance were China’s Minth Group, a leading auto parts manufacturer and Japan’s Daifuku Co., a material handling equipment manufacturer  due to market concerns about supply constraint as well as cost pressure caused by semiconductor shortages and global transportation logistics bottlenecks. We believe these are short-term issues to be resolved over the next few quarters and view this as a healthy correction after strong share performances posted by both companies in the second half of 2020. On the other hand, Pharmaron Beijing Co., a Chinese contract research organization company providing research and development (R&D) outsourcing services to global pharmaceutical firms, and Minda Industries Limited, an Indian auto-parts business, were the top two contributors to the performance, following their strong earnings delivery during the period.

Notable Portfolio Changes:

During the second quarter, we continued to adopt a barbell approach, adding both cyclical dividend payers and structural dividend growers. One dividend payer position we initiated was in Japan’s AGC Inc., a global producer of glass and chemical products. The company is moving away from commodity type of products towards specialty products with high technological barrier and enhanced return on invested capital, such as life science services and advanced semiconductor manufacturing materials. We believe AGC is an undervalued stock that possess both cyclical recovery drivers and structural growth opportunities. On the dividend growth side, we initiated a position in Autel Intelligent Technology Corp., an automotive after-market diagnostics equipment manufacturer listed on the Chinese A-share market. Under its own “Autel” brand name, the company has been successfully penetrating key overseas markets, including the U.S., thanks to its excellent product quality and competitive pricing. With a continuing emphasis on R&D (Autel is spending about 20% of sales in R&D) we believe the company’s market-share gain momentum can be further sustained, and the monetization potential of its diagnostics software could provide further upside to the profit margin. With a 50%-dividend payout ratio, Autel is already sharing its rapid business growth via a rising dividend payment to all shareholders.

To fund these new positions, we exited several holdings, including names like Chongqing Brewery (expensive valuation multiples) and Pigeon Corp. (slowing down growth profiles).

Outlook:

After a rather disruptive rotation in the first half, equity markets have more or less re-adjusted to the new environment, pricing in a rising inflation expectation and potential tapering of loose monetary policy. Looking ahead, despite the lingering COVID resurgence impact, we remain constructive on Asian equities, supported by a broadening economic recovery and solid corporate earnings growth. Compared to major global markets, Asia (as represented by the MSCI Asia Pacific Index) still trades at a reasonable valuation level of 15.4x forward P/E with consensus earnings growth of 26%.  Heading into the second half of 2021 and beyond, we believe cyclical businesses are likely to lead the early earnings recovery phase, while structural growth drivers such as domestic consumption and industrial upgrade could return to drive further earnings growth.  We believe maintaining a balanced portfolio exposure between dividend growth stocks and high-dividend-yielding stocks makes more sense in the current environment.

As of June 30, 2021, the securities mentioned comprised the Matthews Asia Dividend Fund in the following percentages: Minth Group, Ltd., 5.1%; Daifuku Co., Ltd., 1.4%; Pharmaron Beijing Co., Ltd., 3.0%; Minda Industries, Ltd., 2.1%; AGC, Inc., 1.3%; and Autel Intelligent Technology Corp., Ltd., 1.0%. The Fund held no positions in Chongqing Brewery Co., Ltd., and Pigeon Corp.

Current and future portfolio holdings are subject to change and risk.

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 06/30/2021
1YR 3YR 5YR 10YR Since Inception Inception Date
38.22% 10.59% 11.46% 8.60% 9.82% 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 06/30/2021
30-Day SEC Yield 0.72%
30-Day SEC Yield (excluding expense waiver) 0.71%
Dividend Yield 1.78%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 06/30/2021, 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.