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Matthews Asia Growth Fund
MPACX

Snapshot
  • Unconstrained growth strategy investing across Asia Pacific’s developed, emerging and frontier markets
  • Focus on the most profitable and attractive growth opportunities in Asia
  • Highly-differentiated portfolio offers exposure to names often under-represented in broader global equity strategies

10/31/2003

Inception Date

9.72%

YTD Return

(as of 05/20/2024)

$23.25

NAV

(as of 05/20/2024)

0.00

1 Day NAV Change

(as of 05/20/2024)

Objective

Long-term capital appreciation.

Strategy

Under normal circumstances, the Matthews Asia Growth Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia. The Fund may also invest in the convertible securities, of any duration or quality, of Asian companies. 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.

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.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 10/31/2003
Fund Assets $330.85 million (04/30/2024)
Currency USD
Ticker MPACX
Cusip 577-130-867
Portfolio Turnover 77.3%
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 1.13%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 04/30/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Growth Fund - MPACX
10/31/2003
MPACX
-3.70% 6.17% 3.16% 5.09% -14.80% -0.86% 3.39% 6.65%
MSCI All Country Asia Pacific Index
-1.42% 5.40% 3.64% 11.67% -2.88% 4.17% 5.19% 6.34%
As of 03/31/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Growth Fund - MPACX
10/31/2003
MPACX
2.44% 7.13% 7.13% 7.91% -13.59% 0.50% 3.67% 6.87%
MSCI All Country Asia Pacific Index
2.82% 5.13% 5.13% 12.11% -1.96% 4.80% 5.30% 6.44%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews Asia Growth Fund - MPACX
MPACX
3.53% -33.12% -14.65% 46.76% 26.18% -16.25% 39.39% 0.92% -0.05% 1.49%
MSCI All Country Asia Pacific Index
11.81% -16.92% -1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29%

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 03/31/2024)

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

  • OVERALL
  • out of 10 funds
  • 3 YEAR
  • out of 10 funds
  • 5 YEAR
  • out of 10 funds
  • 1 YEAR
  • 3rd
  • 13 out of 20 funds
  • 3 YEAR
  • 4th
  • 16 out of 16 funds
  • 5 YEAR
  • 3rd
  • 12 out of 16 funds
  • 10 YEAR
  • 3rd
  • 9 out of 14 funds
  • SINCE INCEPTION
  • 2nd
  • 4 out of 9 funds

Ratings agency calculation methodology

Portfolio Managers

Michael J. Oh, CFA photo
Michael J. Oh, CFA

Lead Manager

Peeyush  Mittal, CFA photo
Peeyush Mittal, CFA

Co-Manager

Shuntaro  Takeuchi photo
Shuntaro Takeuchi

Co-Manager

Portfolio Characteristics

(as of 03/31/2024)
Fund Benchmark
Number of Positions 57 1,464
Weighted Average Market Cap $183.4 billion $107.5 billion
Active Share 73.3 n.a.
P/E using FY1 estimates 18.6x 14.8x
P/E using FY2 estimates 16.2x 13.3x
Price/Cash Flow 14.9 9.5
Price/Book 2.7 1.7
Return On Equity 16.3 13.8
EPS Growth (3 Yr) 33.2% 13.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 03/31/2024)
-11.43%
Alpha
0.98
Beta
63.48%
Upside Capture
121.19%
Downside Capture
-0.83
Sharpe Ratio
-1.11
Information Ratio
10.43%
Tracking Error
71.68

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 04/30/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 6.7
Hitachi, Ltd. Industrials Japan 4.3
Keyence Corp. Information Technology Japan 3.8
Shin-Etsu Chemical Co., Ltd. Materials Japan 3.6
Samsung Electronics Co., Ltd. Information Technology South Korea 3.5
Zomato, Ltd. Consumer Discretionary India 3.2
Tokyo Electron, Ltd. Information Technology Japan 2.7
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.7
SK Hynix, Inc. Information Technology South Korea 2.3
ICICI Bank, Ltd. Financials India 2.2
TOTAL 35.0

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 03/31/2024)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 31.0 20.5 10.5
Consumer Discretionary 20.4 14.9 5.5
Financials 18.1 19.4 -1.3
Industrials 11.5 12.5 -1.0
Health Care 5.7 5.7 0.0
Communication Services 5.3 7.6 -2.3
Materials 4.0 6.5 -2.5
Energy 2.0 3.0 -1.0
Consumer Staples 1.1 4.7 -3.6
Real Estate 0.0 3.2 -3.2
Utilities 0.0 2.1 -2.1
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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

Country Fund Benchmark Difference
Japan 35.8 34.9 0.9
India 17.3 11.1 6.2
China/Hong Kong 11.8 18.4 -6.6
Taiwan 11.4 11.0 0.4
South Korea 8.9 8.1 0.8
Indonesia 4.4 1.2 3.2
United States 2.5 0.0 2.5
Netherlands 2.0 0.0 2.0
Philippines 1.7 0.4 1.3
Singapore 1.5 2.0 -0.5
Australia 1.1 10.7 -9.6
Vietnam 0.5 0.0 0.5
Thailand 0.0 1.0 -1.0
Malaysia 0.0 0.9 -0.9
New Zealand 0.0 0.3 -0.3
Macau 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 78.3 63.2 15.1
Large Cap ($10B-$25B) 11.1 20.9 -9.8
Mid Cap ($3B-$10B) 6.6 15.4 -8.8
Small Cap (under $3B) 3.0 0.5 2.5
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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)
12/13/2023 12/14/2023 $0.37967 $0.00000 $0.00000 $0.37967 1.8% N.A.
12/13/2022 12/14/2022 $0.00000 $0.00000 $0.57757 $0.57757 2.6% N.A.
12/14/2021 12/15/2021 $0.00000 $0.47969 $1.17413 $1.65382 4.8% N.A.
12/15/2020 12/16/2020 $0.15061 $0.16831 $1.39495 $1.71387 4.6% N.A.
12/16/2019 12/17/2019 $0.00000 $0.00000 $0.27416 $0.27416 1.0% N.A.

 

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, 2024

Market Environment

  • The first quarter of the year was a period of contrast across markets in Asia. In particular, markets linked to technology, communication services and the global supply chains of semiconductors and artificial intelligence (AI) benefited while other interest-rate sensitive areas were held back by a reset in expectations as to the trajectory of U.S. Federal Reserve cuts. In terms of markets, Japan, Taiwan and India were the primary drivers while China/Hong Kong struggled. 
  • Japan was the best performing market in Asia as well globally in the first quarter. Larger payouts to minority shareholders and the robust buyback of shares have allowed returns on equity (ROE) to be maintained far above what the country’s GDP growth would imply. The Bank of Japan’s recent decision to end its negative interest rate policy is a key signal that the country’s growth momentum is real while monetary policy is set to remain accommodative.
  • Taiwan did well thanks to its exposure to global supply chains in technology. Its strong ties to the rapidly growing contribution of generative AI to economies and world trade helped.
  • India outperformed the broad emerging markets though there was some consolidation over concerns regarding elevated valuations. Unique characteristics underpinning India’s elevated valuations include having one of the world’s highest nominal GDP growth rates supported by higher-than-market earnings growth and a long runway of powerful demographics and wage growth.
  • Chinese stocks were volatile in the first quarter but rebounded from January’s sell-off as investors weighed positive statements from the Chinese government regarding its 5% GDP growth target, efforts to underpin the local stock markets via ETF purchases and green shoots of improvement in corporate earnings revisions.

Contributors and Detractors

  • For the quarter ended March 31, 2024, the Asia Growth Fund returned 7.13%, (Investor Class) and 7.13% (Institutional Class) while its benchmark, the MSCI All Country Asia Pacific Index, returned 5.13% over the same period.
  • The top three contributors to relative performance, on a country basis, were the U.S. due to an off-benchmark allocation, Japan due to stock selection and Taiwan due to an overweight allocation. The top three detractors to relative performance were China/Hong Kong, the Philippines and Thailand due to stock selection.
  • The top three contributors to relative performance, on a sector basis, were information technology (IT) and materials due to stock selection, and consumer staples due to an underweight allocation. The top three detractors to relative performance were financials, health care and communication services due to stock selection.
  • The three largest contributors to absolute performance during the quarter included NVIDIA, a U.S. specialist semiconductor manufacturer, Disco, a Japanese semiconductor equipment manufacturer, and Taiwan Semiconductor Manufacturing Company, a leading Taiwanese chip manufacturer. The top three detractors to performance included Pinduoduo (PDD), a Chinese multinational commerce company, SHIFT, a Japanese IT company, and HDFC Bank, a leading Indian bank and financial services company.

Outlook

  • As we look out to the rest of the year, we see three reasons to be positive on markets in Asia. The first is the natural recovery that is taking hold after COVID. Economic growth is picking up and is being driven by domestic consumption. Secondly, when interest rates are cut in the U.S., we should see a cyclical pickup, particularly in markets like South Korea and Taiwan. Thirdly, we expect the second half of the year to yield slightly better news for China. We think earnings will continue to improve and there will be more initiatives to support the consumer. 
  • The ascendance of AI in industries across the globe, we believe, will continue to be a growth driver for computer hardware, chip and equipment makers in Taiwan and other markets in the region including South Korea, Japan and China.
  • Additionally, while we expect some consolidation in Japanese equities, recent structural improvements in capital allocation should lead to an equal structural re-rating in expected stock multiples in our view. 

 

View the Fund’s Top 10 holdings as of March 31, 2024. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MPACX as of 03/31/2024
1YR 3YR 5YR 10YR Since Inception Inception Date
7.91% -13.59% 0.50% 3.67% 6.87% 10/31/2003

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 1.13%

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.

 

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.