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Matthews Emerging Markets Sustainable Future Fund
MASGX

The Matthews Asia ESG Fund won the inaugural 2021 UNCTAD Sustainable Emerging Market Fund Award. Press Release. Methodology.

Formerly known as the Matthews Asia ESG Fund.

Snapshot
  • Unconstrained strategy focused on companies that make a positive environmental, social and economic impact in emerging markets
  • All-cap portfolio with diversified emerging and frontier market exposures
  • Deep bottom-up fundamental approach that seeks to generate attractive long-term risk-adjusted returns by investing in well-governed companies

04/30/2015

Inception Date

32.20%

YTD Return

(as of 07/17/2026)

$18.31

NAV

(as of 07/17/2026)

-0.28

1 Day NAV Change

(as of 07/17/2026)

Objective

Long-term capital appreciation

Strategy

Under normal circumstances, the Matthews Emerging Markets Sustainable Future 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 of any market capitalization located in emerging market countries that satisfy one or more of the Fund’s environmental, social and governance (“ESG”) standards. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. Certain emerging market countries may also be classified as “frontier” market countries, which are a subset of emerging market countries with newer or even less developed economies and markets, such as Sri Lanka and Vietnam.

Risks

Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. Matthews Emerging Markets Sustainable Future Fund’s consideration of ESG factors in making its investment decisions may impact the Fund’s relative investment performance positively or negatively.

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

Fund Facts
Inception Date 04/30/2015
Fund Assets $350.85 million (06/30/2026)
Currency USD
Ticker MASGX
Cusip 577-130-727
Benchmark MSCI Emerging Markets Index
Geographic Focus Emerging Markets - Countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe
Fees & Expenses
Gross Expense Ratio 1.35%
Net Expense Ratio 1.35%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 06/30/2026
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Emerging Markets Sustainable Future Fund - MASGX
04/30/2015
MASGX
4.78% 37.88% 48.74% 63.71% 21.11% 9.96% 13.58% 11.18%
MSCI Emerging Markets Index
-1.36% 24.15% 24.02% 44.18% 23.62% 7.69% 10.52% 7.52%
As of 06/30/2026
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Emerging Markets Sustainable Future Fund - MASGX
04/30/2015
MASGX
4.78% 37.88% 48.74% 63.71% 21.11% 9.96% 13.58% 11.18%
MSCI Emerging Markets Index
-1.36% 24.15% 24.02% 44.18% 23.62% 7.69% 10.52% 7.52%
For the years ended December 31st
Name 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Matthews Emerging Markets Sustainable Future Fund - MASGX
MASGX
22.89% -2.46% 7.83% -14.38% 11.76% 42.87% 12.55% -9.73% 33.79% -1.40%
MSCI Emerging Markets Index (USD)
34.36% 8.05% 10.27% -19.74% -2.22% 18.69% 18.88% -14.24% 37.75% 11.60%

Before July 29, 2022, the Fund was managed with a different investment strategy and may have achieved different performance results under its current investment strategy from the performance shown for periods before that date.

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 06/30/2026)

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 688 funds
  • 3 YEAR
  • out of 688 funds
  • 5 YEAR
  • out of 626 funds
  • 10 YEAR
  • out of 464 funds

Ratings agency calculation methodology

Portfolio Managers

Sean  Taylor photo
Mark W. Headley photo
Cecilia  Lau photo
Kathlyn  Collins, CAIA photo
Vivek  Tanneeru photo

Portfolio Characteristics

(as of 06/30/2026)
Fund Benchmark
Number of Positions 58 1,178
Weighted Average Market Cap $329.5 billion $459.4 billion
Active Share 78.7 n.a.
P/E using FY1 estimates 14.4x 12.6x
P/E using FY2 estimates 10.9x 10.3x
Price/Cash Flow 16.7 11.7
Price/Book 3.9 2.6
Return On Equity 20.8 21.6
EPS Growth (3 Yr) 39.5% 25.3%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2026)
-3.79%
Alpha
1.14
Beta
97.33%
Upside Capture
106.77%
Downside Capture
0.75
Sharpe Ratio
-0.29
Information Ratio
8.51%
Tracking Error
86.19

Fund Risk Metrics are reflective of Investor share class.

Source: FactSet Research Systems

Top 10 Holdings

(as of 06/30/2026)
Name Sector Country % Net Assets
SK Square Co., Ltd. Industrials South Korea 9.4
Samsung Electronics Co., Ltd. Information Technology South Korea 7.6
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 7.6
Micron Technology, Inc. Information Technology United States 4.8
Elite Material Co., Ltd. Information Technology Taiwan 4.7
Eugene Technology Co., Ltd. Information Technology South Korea 4.4
Bandhan Bank, Ltd. Financials India 4.1
Marico, Ltd. Consumer Staples India 3.0
HD Hyundai Electric Co., Ltd. Industrials South Korea 2.6
Contemporary Amperex Technology Co Ltd Industrials China/Hong Kong 2.3
TOTAL 50.5

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 06/30/2026)
  • Sector Allocation
  • Country Allocation
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 39.7 45.3 -5.6
Industrials 19.2 6.7 12.5
Financials 15.2 18.4 -3.2
Consumer Discretionary 7.0 7.2 -0.2
Consumer Staples 3.9 2.6 1.3
Health Care 3.5 2.4 1.1
Utilities 2.0 1.9 0.1
Communication Services 1.6 6.0 -4.4
Real Estate 1.5 1.0 0.5
Materials 0.0 5.4 -5.4
Energy 0.0 3.1 -3.1
Cash and Other Assets, Less Liabilities 6.3 0.0 6.3

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

Country Fund Benchmark Difference
South Korea 25.6 23.7 1.9
Taiwan 18.6 27.3 -8.7
India 16.2 11.1 5.1
China/Hong Kong 14.4 19.1 -4.7
United States 4.8 0.0 4.8
Brazil 3.3 3.8 -0.5
Turkey 2.7 0.4 2.3
Greece 1.8 0.5 1.3
Romania 1.5 0.0 1.5
Hungary 1.1 0.3 0.8
Argentina 0.9 0.0 0.9
Saudi Arabia 0.8 2.4 -1.6
Poland 0.8 1.0 -0.2
Indonesia 0.3 0.4 -0.1
Bangladesh 0.3 0.0 0.3
Vietnam 0.3 0.0 0.3
Jordan 0.2 0.0 0.2
South Africa 0.0 2.9 -2.9
Mexico 0.0 1.7 -1.7
United Arab Emirates 0.0 1.1 -1.1
Thailand 0.0 1.0 -1.0
Malaysia 0.0 0.9 -0.9
Kuwait 0.0 0.5 -0.5
Qatar 0.0 0.5 -0.5
Chile 0.0 0.4 -0.4
Peru 0.0 0.4 -0.4
Philippines 0.0 0.3 -0.3
Colombia 0.0 0.1 -0.1
Czech Republic 0.0 0.1 -0.1
Egypt 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 6.3 0.0 6.3

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

Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 50.3 74.4 -24.1
Large Cap ($10B-$25B) 14.0 16.6 -2.6
Mid Cap ($3B-$10B) 18.8 8.9 9.9
Small Cap (under $3B) 10.7 0.1 10.6
Cash and Other Assets, Less Liabilities 6.3 0.0 6.3

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.

Portfolio Breakdown benchmark reflects the MSCI Emerging Markets Index as of 6/30/23.

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)
12/16/2025 12/17/2025 $0.77320 $0.00000 $0.00000 $0.77320 5.5% N.A.
12/17/2024 12/18/2024 $0.30741 $0.00000 $0.00000 $0.30741 2.4% N.A.
12/13/2023 12/14/2023 $0.25011 $0.17470 $0.51859 $0.94340 7.2% N.A.
12/13/2022 12/14/2022 $0.04203 $0.06010 $0.57198 $0.67411 4.9% N.A.
12/14/2021 12/15/2021 $0.00000 $0.70374 $0.64204 $1.34578 7.8% 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 June 30, 2026

Market Environment

  • Equities in emerging markets and Asia had a strong, albeit, volatile second quarter, amid concerns over the Iran conflict and the sustainability of the global artificial intelligence (AI) CapEx boom. South Korea and Taiwan markets led gains, supported by earnings growth and positive sentiment generated from the vast spending by U.S. hyperscalers on components and materials used in AI-related hardware.
  • Chinese equities declined as consumer confidence and spending remained weak. AI and technology, power infrastructure and energy generation are thriving parts of the economy but they remain a narrow pocket of China’s equity market.
  • India, a major oil importer, posted gains as easing tensions in the Middle East triggered a decline in energy prices. The market, however, continued to face headwinds, including AI disruptions to its key software and IT sectors.
  • Latin America declined approximately 4% during the quarter. While some markets, including Brazil, had benefited from higher energy prices, macroeconomic conditions have become increasingly adverse this year as the prospect of sustainable interest rate cuts have diminished.

Contributors and Detractors

  • For the quarter ended June 30, 2026, the Matthews Emerging Markets Sustainable Future Fund returned 37.88%, (Investor Class) and 37.99% (Institutional Class) while its benchmark, the MSCI Emerging Markets Index, returned 24.15% over the same period.
  • On a country basis, the top three contributors to relative performance were China/Hong Kong due to stock selection, the U.S. due to an off-benchmark allocation and South Korea due to an overweight allocation. The top three detractors were Taiwan and Poland due to stock selection and Romania due to an off-benchmark allocation.
  • On a sector basis, the top three contributors to relative performance were industrials due to stock selection, materials due to zero allocation and financials due to stock selection. The two detractors were consumer staples due to an overweight allocation, utilities due to an overweight allocation and stock selection.
  • The largest contributors to absolute performance included SK Square Co., Ltd., South Korean investment company, Micron Technology, Inc., a U.S. semiconductor manufacturer, and Samsung Electronics, a South Korean semiconductor and consumer electronics maker. The top three detractors included JD Health International Inc., a Chinese online healthcare platform, Alibaba Group, the largest e-commerce platform company in China, and YDUQS Participacoes SA, a Brazilian on-campus and distance-learning education company.

Outlook

  • We believe the outlook for the second half of the year is reasonably robust. Although interest rate cuts appear unlikely in the near term, growth in the U.S. economy may surprise investors on the upside which could be a tailwind for emerging markets.
  • We expect the global reindustrialization theme to continue as developed economies invest in defense and modernize their domestic industries and energy and power infrastructure. We believe this could benefit markets with advanced manufacturing resources, such as South Korea.
  • We also see the rollout of AI capabilities and hardware across industries including manufacturing and services continuing, though we don’t view this theme as necessarily structural or cyclical.
  • Overall, fundamentals appear strong across Asia and emerging markets and we expect earnings growth to improve over the next few quarters. If political risk in the Middle East subsides this will be an additional positive. While periods of market volatility are likely, any further corrections could present attractive opportunities, offering windows for investors to increase exposure.

View the Fund's Top 10 holdings as of June 30, 2026. Current and future holdings are subject to change and risk.

Average Annual Total Returns - MASGX as of 06/30/2026
1YR 3YR 5YR 10YR Since Inception Inception Date
63.71% 21.11% 9.96% 13.58% 11.18% 04/30/2015

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. For the Fund's most recent month-end performance visit matthewsasia.com

Fees & Expenses
Gross Expense Ratio 1.35%
Net Expense Ratio 1.35%

Matthews has contractually agreed to waive fees and reimburse expenses to limit the Total Annual Fund Operating Expenses until April 30, 2027. Please see the Fund’s prospectus for additional details.

Investments in emerging and frontier securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Additionally, investing in emerging and frontier markets countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets. Matthews Emerging Markets Sustainable Future Fund’s consideration of ESG factors in making its investment decisions may impact the Fund’s relative investment performance positively or negatively.

 

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.