Asia Growth & Income

Matthews Asian Growth and Income Fund MACSX

  • Seeks upside participation while aiming to provide some downside protection in Asia ex Japan
  • Utilize income-paying equities and convertible bonds to help mitigate downside risk and volatility
  • Offers a relatively stable means of participating in Asia’s long-term growth


Inception Date


YTD Return

(as of 01/22/2021)



(as of 01/22/2021)

$1.50 billion

Fund Assets

(as of 12/31/2020)


Long-term capital appreciation with some current income.


Under normal circumstances, the Matthews Asian Growth and Income 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 common stock, preferred stock and other equity securities, and convertible securities as well as fixed-income securities, of any duration or quality, of companies located in Asia. The Fund attempts to offer investors a relatively stable means of participating in a portion of the Asian region’s growth prospects, while providing some downside protection, in comparison to a portfolio that invests purely in common stocks. The strategy of owning convertible bonds and dividend-paying equities is designed to help the Fund to meet its investment objective while helping to reduce the volatility of its portfolio.


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.

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

Fund Facts
Inception Date 09/12/1994
Fund Assets $1.50 billion (12/31/2020)
Currency USD
Ticker MACSX
Cusip 577-130-206
Portfolio Turnover 21.89%
Benchmark MSCI All Country Asia ex Japan 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 1.08%


  • Monthly
  • Quarterly
  • Calendar Year
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As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund
5.99% 15.52% 16.00% 16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994
MSCI All Country Asia ex Japan Index
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 5.40%
As of 12/31/2020
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund
5.99% 15.52% 16.00% 16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994
MSCI All Country Asia ex Japan Index
6.84% 18.66% 25.36% 25.36% 8.46% 13.90% 6.80% 5.40%
For the years ended December 31st
Name 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011
Matthews Asian Growth and Income Fund
16.00% 17.26% -10.96% 21.85% 1.34% -4.50% -0.65% 4.83% 26.90% -10.62%
MSCI All Country Asia ex Japan Index
25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11% 3.34% 22.70% -17.07%

MSCI AC Asia ex Japan Index since inception value calculated from 8/31/94.

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 12/31/2020)

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 12/31/2020)
1.37% 30-Day SEC Yield
2.55% Dividend Yield

Dividend Yield (trailing) Source: FactSet Research Systems, Bloomberg, Matthews
30-Day SEC Yield Source: BNY Mellon Investment Servicing (US) Inc.


  • out of 58 funds
  • 3 YEAR
  • out of 58 funds
  • 5 YEAR
  • out of 55 funds
  • 10 YEAR
  • out of 31 funds
  • 1 YEAR
  • 3rd
  • 24 out of 33 funds
  • 3 YEAR
  • 3rd
  • 19 out of 32 funds
  • 5 YEAR
  • 4th
  • 25 out of 29 funds
  • 10 YEAR
  • 3rd
  • 13 out of 18 funds
  • 1st
  • 1 out of 5 funds

Ratings agency calculation methodology

Portfolio Managers

Robert J. Horrocks, PhD photo
Kenneth  Lowe, CFA photo
Kenneth Lowe, CFA

Lead Manager

Satya  Patel photo
Satya Patel


Portfolio Characteristics

(as of 12/31/2020)
Number of Securities

Source: BNY Mellon Investment Servicing (US) Inc.

$134.1 billion
Weighted Average Market Cap

Source: FactSet Research Systems

Top 10 Holdings

(as of 12/31/2020)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 7.1
Tencent Holdings, Ltd. Communication Services China/Hong Kong 4.9
Samsung Electronics Co., Ltd. Information Technology South Korea 4.3
AIA Group, Ltd. Financials China/Hong Kong 4.1
Midea Group Co., Ltd. Consumer Discretionary China/Hong Kong 2.4
Techtronic Industries Co., Ltd. Industrials China/Hong Kong 2.4
Housing Development Finance Corp., Ltd. Financials India 2.3
Broadcom, Inc. Information Technology United States 2.1
Advantech Co., Ltd. Information Technology Taiwan 2.0
Macquarie Korea Infrastructure Fund Financials South Korea 2.0
TOTAL 33.6

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 12/31/2020)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 19.1 23.1 -4.0
Consumer Discretionary 17.1 19.1 -2.0
Financials 16.0 17.9 -1.9
Communication Services 11.4 11.5 -0.1
Industrials 10.8 5.3 5.5
Consumer Staples 8.2 5.0 3.2
Real Estate 6.7 3.9 2.8
Utilities 3.9 2.2 1.7
Health Care 2.3 5.0 -2.7
Materials 1.1 4.3 -3.2
Energy 0.0 2.8 -2.8
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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

Country Fund Benchmark Difference
China/Hong Kong 43.8 51.6 -7.8
South Korea 13.0 15.2 -2.2
Taiwan 10.6 14.2 -3.6
Singapore 7.7 2.4 5.3
India 7.4 10.4 -3.0
France 3.5 0.0 3.5
Indonesia 2.5 1.5 1.0
Australia 2.5 0.0 2.5
United States 2.1 0.0 2.1
Vietnam 1.4 0.0 1.4
Philippines 1.3 0.8 0.5
Thailand 0.9 2.1 -1.2
Malaysia 0.0 1.7 -1.7
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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

Asset Type Fund
Common Equities and ADRs 85.8
Convertible Bonds 9.1
Preferred Equities 1.8
Cash and Other Assets, Less Liabilities 3.3
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 54.3 64.0 -9.7
Large Cap ($10B-$25B) 11.9 19.7 -7.8
Mid Cap ($3B-$10B) 23.2 14.9 8.3
Small Cap (under $3B) 7.4 1.5 5.9
Cash and Other Assets, Less Liabilities 3.3 0.0 3.3

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.


Record Date Ex, Pay and
Reinvest Date
Short Term
Capital Gains
Long Term
Capital Gains
Total Distributions
Per Share
% of NAV Nondividend Distribution (Return of Capital)
12/15/2020 12/16/2020 $0.05757 $0.00000 $0.00475 $0.06232 0.4% N.A.
06/24/2020 06/25/2020 $0.10611 $0.00000 $0.00000 $0.10611 0.7% N.A.
12/16/2019 12/17/2019 $0.18076 $0.00000 $0.22385 $0.40461 2.6% N.A.
06/17/2019 06/18/2019 $0.17400 $0.00000 $0.00000 $0.17400 N.A. 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.


Period ended December 31, 2020

For the year ending December 31, 2020, the Matthews Asian Growth and Income Fund returned 16.00% (Investor Class) and 16.18% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 25.36%. For the fourth quarter of the year, the Fund returned 15.52% (Investor Class) and 15.53% (Institutional Class) versus 18.66% for the Index. 

Market Environment: 

2020 was a remarkable year in many respects, not least of which is the unquestionably surprising strength of the performance of risk assets against a backdrop of a major health crisis that has crippled parts of the global economy. The coronavirus pandemic alongside a disputed U.S. presidential election, rising geopolitical tensions and an equity bull market that is long in the tooth appeared to be sufficient reasons to expect increased volatility, but these factors have been more than offset by a ramping up of aggressive monetary and fiscal support by almost all governmental and central bank regimes globally. This has caused the cost of capital to plummet to levels that most market participants have not witnessed during their careers, and the elevated valuations that follow.

Within Asia, equity market strength is a touch more understandable as the North Asian countries of China, Taiwan and South Korea led the charge. In China’s case, it has done a solid job of dealing with the virus and parts of the country are now functioning relatively normally with activity returning to pre-pandemic levels. For Taiwan and South Korea, both are important players within the technology supply chain that has been one of the few areas of visible and structural growth. Much of the rest of the region suffered a different fate as most markets in Southeast Asia finished the year in negative territory, although India bucked this trend with a late surge on hopes for a significant economic recovery in 2021. 

Performance Contributor and Detractors: 

The Fund underperformed over the course of the year but delivered solid absolute returns. This is a robust outcome given our more conservative, income-oriented investment approach. Style factors played an important role in relative performance during the year in light of the largest divergence between the performance of “growth” and “income” equities witnessed for some time.

In light of this, a key reason for the Fund’s relative performance was due to what we do not hold in the portfolio as a number of stay-at-home and electric vehicle stocks such as JD.Com, Alibaba, Meituan and Nio which delivered exceptionally strong performance. Although some of these are solid businesses, many do not fit our mandate of balancing growth and income. Elsewhere, the financial sector was the largest detractor to returns for the full year, although it contributed significantly over the fourth quarter. The largest of these was HSBC Group, which fell following a worsened outlook for global trade, questions over Hong Kong’s role in international finance and a suspension of its dividend. Thailand’s Kasikornbank also dropped on declining margins and elevated credit costs as the tourist dependent nation struggled to deal with the pandemic. We exited both positions during the year.

Parts of Southeast Asia also detracted from performance despite solid relative stock selection. SingTel dropped as it cut its dividend and delivered poor earnings due to lower roaming fees, rising price competition and weaker enterprise revenues. Genting Malaysia declined as the current health crisis is likely to impact the casino operator for quite some time.

The largest contributors to performance came from the IT sector with TSMC the strongest of these. The world’s largest semiconductor foundry gained as competitor Intel announced that it may consider outsourcing its own production. This further confirms TSMC’s leading position as we believe it is also likely to gain from increasing content value in Apple’s new iPhone as well as potential wins from other customers. Samsung Electronics rose as it is expected that it can gain smartphone market share from Huawei given U.S. restrictions on the latter’s access to necessary components, as well as benefiting from an improving memory cycle. Elsewhere, the Fund’s holdings in domestic demand-oriented Chinese companies such as Tencent, Netease, Jiangsu Yanghe, Yili Industrial and Midea Group all rose significantly. The commonality here is that these are all leaders in their respective fields, and in strong positions to take advantage of a still growing consumer base. 

Notable Portfolio Changes:

The final quarter to the year was an active one as increased volatility created a number of disconnects in markets. The largest alterations to the portfolio came in both China and convertible bonds as we exited nine positions and established six new holdings.

A number of new issues during 2020 created some attractive opportunities within the convertible bond market, including South Korean internet giant Kakao and Chinese e-commerce platform Pinduoduo. These additions increased the portfolio’s exposure to leading stay-at-home economy stocks, but done so in a way that we believe will continue to prudently manage risk. Both of these companies are strong credits with net cash balance sheets, and offer an attractive risk-reward skew as growth is likely to remain strong in our view.

Within equities, we added a small position in gold miner Saracen Mineral Holdings. The company is on the verge of merging with Northern Star Resources and in our view, the combined entity should be a business with a well-respected management team, solid production growth and room for synergies that could drive double digit earnings growth. It also provides the portfolio with some exposure to the precious metal as a means of tail risk given the scale of unprecedented monetary action that has been taken by central banks globally.

These were funded through the sales of convertible bonds in Anta Sports, Bosideng, Haier and CapitaLand as well as equity positions in Jiangsu Yanghe, Lepu Medical, Zhejiang Supor, and KDDI.


Looking to 2021, the backdrop for emerging market and Asian equities appears reasonable. It is likely that the geopolitical landscape will become less erratic than the last few years with renewed hopes of engagement and diplomacy from the new U.S. administration. Further, the alteration in the U.S. Fed’s approach to monetary policy toward targeting average inflation is anticipated to keep interest rates low for the foreseeable future. This combined with a growing fiscal deficit in the U.S. and calls to undergo yet more stimulus may continue to put downward pressure on the U.S. dollar—often a key driver of relative returns for emerging markets. Adding to this constructive backdrop is that relative growth expectations in much of Asia are greater to Western counterparts and we have begun to witness earnings upgrades as the economic recovery ensues.

There are, of course, some counter arguments. Chief amongst these are valuations and style bifurcation. Headline multiples of 16.5x FY1 earnings are lofty and also do not illustrate the degree to which “value” has underperformed “growth” over 2020. (Value stocks are represented by the MSCI All Country Asia ex Japan Value Index. Growth stocks are represented by the MSCI All Country Asia ex Japan Growth Index). The “value” index trades at only 10.6x FY1 earnings having delivered a relatively weak 9.9% return over 2020 in comparison to the “growth” index return of 40.4% and 25.5x FY1 earnings multiple. (The P/E Ratio is the share price of a stock as of the report date, divided by the forecasted earnings per share for the next 12-month period (FY1)). This is arguably justified to a degree, but it remains our belief that the party in high growth equities will not last in perpetuity. A raft of IPOs, SPACs (special-purpose acquisition companies) and elevated retail participation point to speculative behavior that lacks discipline. As a portfolio that aims to deliver attractive risk-adjusted returns across cycles through buying quality companies that display a blend of both growth and income, this backdrop leaves us fairly optimistic from a macroeconomic and style backdrop. We believe that we can generate attractive future portfolio returns as we aim to avoid value traps as well as overpriced conceptual growth stocks, focusing on long-term compounders that provide some income.


As of December 31, 2020, the securities mentioned comprised the Matthews Asian Growth and Income Fund in the following percentages: Singapore Telecommunications Ltd. (SingTel), 1.2%; Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), 7.1%; Tencent Holdings Ltd., 4.9%; Netease Inc., ADR, 1.8%; Midea Group Co., Ltd. A Shares, 2.4%; Inner Mongolia Yili Industrial Group Co., Ltd. A Shares, 1.8%; Kakao Corp., Cnv., 0.000%, 04/28/2023, 1.3%; Pinduoduo, Inc., Cnv., 0.000%, 12/01/2025, 1.5%; Saracen Mineral Holdings, Ltd., 1.1%.; and Samsung Electronics, Co., Ltd., 4.3%


The Fund did not held no positions in: Alibaba Group Holdings Ltd., Meituan, Nio, HSBC Group, Kasikornbank, JD.Com, Inc., Genting Malaysia, Intel Corp., Huawei Technologies Co. Inc., Northern Star Resources ltd., Anta Sports Products Limted, Bosideng International Holdings Ltd., Haier Group Corp., CapitaLand Limited, Jiangsu Yanghe Brewery, Lepu Medical Technology Company, Zhejiang Supor Co., Ltd., KDDI Corp., or Apple, Inc. Current and future portfolio holdings are subject to change and risk.


Average Annual Total Returns - MACSX as of 12/31/2020
1YR 3YR 5YR 10YR Since Inception Inception Date
16.00% 6.59% 8.38% 5.37% 9.22% 09/12/1994

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 1.08%
Yields as of 12/31/2020
30-Day SEC Yield 1.37%
Dividend Yield 2.55%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 12/31/2020, 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.

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Matthews China Dividend Fund


Matthews Asia Credit Opportunities Fund


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.