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
-29.07%
YTD Return
(as of 12/05/2022)
$13.34
NAV
(as of 12/05/2022)
-0.15
1 Day NAV Change
(as of 12/05/2022)
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 | $2.15 billion (10/31/2022) | |
| Currency | USD | |
| Ticker | MAPIX | |
| Cusip | 577-125-107 | |
| Portfolio Turnover | 47.4% | |
| Benchmark | MSCI All Country Asia Pacific Index | |
| Geographic Focus | Asia - Consists of all countries and markets in Asia, including developed, emerging, and frontier countries and markets in the Asian region | |
Fees & Expenses
| Gross Expense Ratio | 1.03% | |
| Net Expense Ratio | 1.02% | |
| Objective | Total return with an emphasis on providing current income. |
| Strategy | Under normal circumstances, the Matthews Asia Dividend Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in dividend-paying equity securities of companies located in Asia. The Fund may also invest in convertible debt and equity securities. The Fund seeks to provide a level of current income that is higher than the yield generally available in Asian equity markets over the long term. |
| Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Investing in emerging and frontier markets involves different and greater risks, as these countries are substantially smaller, less liquid and more volatile than securities markets in more developed markets.
There is no guarantee that the Fund or the companies in its portfolio will pay or continue to pay dividends.
The risks associated with investing in the Fund can be found in the prospectus |
Performance
- Monthly
- Quarterly
- Calendar Year
As of 10/31/2022
As of 09/30/2022
For the years ended December 31st
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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 $10,000 Investment Since Inception
(as of 09/30/2022)Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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 09/30/2022)
0.81%
30-Day SEC Yield
The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2022, 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.
0.81%
30-Day SEC Yield
(excluding expense waiver)
2.12%
Dividend Yield
<p data-pm-slice="1 1 []">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.</p>
| 30-Day SEC Yield | 0.81% |
| 30-Day SEC Yield (excluding expense waiver) | 0.81% |
| Dividend Yield | 2.12% |
30-Day SEC Yield Source: BNY Mellon Investment Servicing (US) Inc.
Ratings
(as of 09/30/2022)
CATEGORY: Diversified Pacific/Asia
| OVERALL | 2 stars | out of 10 funds |
| 3 YEAR | 2 stars | out of 10 funds |
| 5 YEAR | 2 stars | out of 10 funds |
(as of 09/30/2022)
CATEGORY: International Equity Income Funds
| 1 YEAR | 4th | 98 out of 100 funds |
| 3 YEAR | 3rd | 63 out of 96 funds |
| 5 YEAR | 3rd | 60 out of 89 funds |
| 10 YEAR | 1st | 12 out of 55 funds |
| SINCE INCEPTION | 1st | 1 out of 22 funds |
Ratings agency calculation methodology
Past performance is no guarantee of future results. High ratings and rankings does not assure favorable performance.
The Overall Morningstar® Rating for a fund is derived from a weighted-average of the performance figures associated with its three-, five- and (if applicable) ten-year ratings.
Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
Lipper Analytical Services, Inc., rankings are based on total return, including reinvestment of dividends and capital gains for the stated periods. Funds are assigned a rank within a universe of funds similar in investment objective as determined by Lipper. For the absolute rankings shown the lower the number rank, the better the Fund performed compared to other funds in the classification group. Lipper also calculates a quartile ranking which divides the peer group into quartiles to identify funds of similar quality. Funds in the 1st or 2nd quartile had outperformed the average fund in the peer group while funds in the 3rd or 4th quartile had underperformed.
Portfolio Managers
Yu Zhang, CFA
Lead Manager
Yu Zhang, CFA
Portfolio Manager
Yu Zhang is a Portfolio Manager at Matthews Asia and manages the firm's Asia Dividend and Asia ex Japan Dividend Strategies, and co-manages the China Dividend Strategy. Prior to joining Matthews Asia in 2007 as a Research Associate, Yu was an Analyst researching Japanese companies at Aperta Asset Management from 2005 to 2007. Before receiving a graduate degree in the U.S., he was an Associate in the Ningbo, China office of Mitsui & Co., a Japanese general trading firm. Yu received a B.A. in English Language from the Beijing Foreign Studies University, an MBA from Suffolk University and an M.S. in Finance from Boston College. He is fluent in Mandarin.
S. Joyce Li, CFA
Lead Manager
S. Joyce Li, CFA
Portfolio Manager
S. Joyce Li is a Portfolio Manager at Matthews Asia and manages the firm’s Asia Dividend Strategy and co-manages the Asia ex Japan Dividend and China Dividend Strategies. Prior to joining the firm in 2016, she was a Portfolio Manager and Principal at Marvin & Palmer Associates, where she co-managed equity investments in the Asia Pacific markets between 2007 and 2016. Joyce started her investment career as a Senior Investment Associate at Wilmington Trust. Joyce received an MBA with honors from the Wharton School of the University of Pennsylvania and a M.S. in Computer Science from the University of Virginia. She is fluent in Mandarin and Cantonese.
Robert J. Horrocks, PhD
Co-Manager
Robert J. Horrocks, PhD
Chief Investment Officer and Portfolio Manager
Robert Horrocks is Chief Investment Officer and Portfolio Manager at Matthews Asia and has been a Matthews Asia Funds Trustee since 2018. He manages the firm's Asian Growth and Income and co-manages the Asia Dividend and Asia ex Japan Dividend Strategies. As Chief Investment Officer, Robert oversees the firm's investment process and investment professionals and sets the research agenda for the investment team. Before joining Matthews Asia in 2008, Robert was Head of Research at Mirae Asset Management in Hong Kong. From 2003 to 2006, Robert served as Chief Investment Officer for Everbright Pramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securities in Hong Kong before moving on to spend eight years working in several different Asian jurisdictions for Schroders, including stints as Country General Manager in Taiwan, Deputy Chief Investment Officer in Korea and Designated Chief Investment Officer in Shanghai. Robert earned his PhD in Chinese Economic History from Leeds University in the United Kingdom, and is fluent in Mandarin.
Sherwood Zhang, CFA
Co-Manager
Sherwood Zhang, CFA
Portfolio Manager
Sherwood Zhang is a Portfolio Manager at Matthews Asia and manages the firm’s China Dividend and China A-Shares Strategies and co-manages the Asia Dividend, Asia ex Japan Dividend and China Strategies. Prior to joining Matthews Asia in 2011, Sherwood was an analyst at Passport Capital from 2007 to 2010, where he focused on such industries as property and basic materials in China as well as consumer-related sectors. Before earning his MBA in 2007, Sherwood served as a Senior Treasury Officer for Hang Seng Bank in Shanghai and Hong Kong, and worked as a Foreign Exchange Trader at Shanghai Pudong Development Bank in Shanghai. He received his MBA from the University of Maryland and his Bachelor of Economics in Finance from Shanghai University. Sherwood is fluent in Mandarin and speaks conversational Cantonese.
Portfolio Characteristics
(as of 09/30/2022)Sources: Factset Research Systems, Inc.
Risk Metrics (3 Yr Return)
(as of 09/30/2022)-1.61%
Alpha
0.96
Beta
92.97%
Upside Capture
101.65%
Downside Capture
-0.21
Sharpe Ratio
-0.25
Information Ratio
6.77%
Tracking Error
85.02
R²
Fund Risk Metrics are reflective of Investor share class.
Sources: Zephyr StyleADVISOR
Top 10 Holdings
(as of 11/30/2022)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 09/30/2022)- 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).
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
Explore our Latest Research & Insights
Visit our Glossary of Terms page for definitions and additional information.
The Markit iBoxx Asian Local Bond Index tracks the total return performance of a bond portfolio consisting of local-currency denominated, high quality and liquid bonds in Asia ex-Japan. The Markit iBoxx Asian Local Bond Index includes bonds from the following countries: China (on- and offshore markets), Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.
The J.P. Morgan Asia Credit Index (JACI) tracks the total return performance of the Asia fixed-rate dollar bond market. JACI is a market cap-weighted index comprising sovereign, quasi-sovereign and corporate bonds and is partitioned by country, sector and credit rating. JACI includes bonds from the following countries: China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea and Thailand.
The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Index is a free float-adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, Hong Kong-listed securities known as Red chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China) and foreign listings (e.g. ADRs).
The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red chips (issued by entities owned by national or local governments in China), P chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g. ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong,Shanghai, Shenzhen and outside of China.
The MSCI Emerging Markets (EM) Asia Index is a free float-adjusted market capitalization weighted index of the stock markets of China, India, Indonesia, Malaysia, Pakistan, Philippines, South Korea, Taiwan and Thailand. The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.
The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungry, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan Thailand, Turkey and United Arab Emirates.
The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.
The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.
The Korea Composite Stock Price Index (KOSPI) is a market capitalization–weighted index of all common stocks listed on the Korea Stock Exchange.
The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization–weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.
The MSCI China Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges,Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).
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.
Commentary
Period ended September 30, 2022
For the third quarter ending September 30, 2022, the Matthews Asia Dividend Fund returned -11.95% (Investor Class) and -11.99% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -11.05%.
Market Environment:
During the third quarter, a more affirmative and hawkish stance adopted by the U.S. Federal Reserve and the ongoing energy crisis in Europe increased recessionary risks globally through reactionary tightening by other central banks to defend their currencies and curb imported inflation. Global equities declined broadly during the period. In Asia, Indonesia and India were the only two markets with positive returns, posting 7.8% and 6.8% gains respectively. Indonesia stood out with its government’s policy reforms and resilient economy supported by the commodity cycle. In India, we observed continued strength in capital spending and domestic consumption driven by its residential property market and the economy’s rising role in the global supply chain. However, India’s high valuation at 21.4x forward P/E in the current stage of monetary tightening makes it vulnerable to profit taking.
In China, the market declined 22% in the quarter, reflecting caution over a softening economy and corporate earnings in the near term as the government closely adheres to its zero-COVID policy ahead of the Party Congress in October. Meanwhile, Japan fell 7.5% with most of the decline driven by yen depreciation.
Performance Contributors and Detractors:
From a regional perspective, our overweight and stock selection in China detracted most from relative performance during the third quarter as the market worried about an economic slowdown caused by China’s zero-COVID policy. Our underweight allocation to India also hurt relative performance as investors remained positive on the solid trend of capital spending and consumption in the country. The high market valuation of Indian equities makes investments there less attractive at the moment as we see evidence of higher inflation and tightening monetary policies.
On the other hand, our stock selection in Japan contributed positively in the quarter as holdings in consumer sectors received strong earnings tailwinds as restrictions lift on inbound tourism to the country. Our underweights in South Korea and Taiwan were also positive contributors.
From a sector perspective, poor stock selection in health care detracted the most from relative performance. The market has been concerned about the outlook for Chinese medical and clinical service companies amid geopolitical tensions with the U.S. Conversely, our strong stock selection in consumer discretionary was the biggest contributor to relative performance. Holdings positioned to benefit from a rebound in Japanese tourism and stocks with idiosyncratic earnings drivers were less impacted by global economic challenges and outperformed.
Turning to individual holdings, Chinese internet leaders, including Alibaba Group, Tencent and Baidu, were among the largest detractors to performance in the period. Although sentiment remains pessimistic due to the prospect of near-term earnings hits from weak consumption, these companies have rationalized their capital investments and operational cost base and are better valued for the eventual reopening of the Chinese economy. On the positive side, UNO Minda Ltd., a leading auto parts manufacturer in India, was the top contributor to performance. The company posted strong earnings growth, driven by its leading market share in the fast-growing SUV market.
Notable Portfolio Changes:
In the third quarter, we initiated two positions in Japanese stocks whose earnings are expected to grow strongly after Japan fully reopens for inbound tourism. One is Kyoritsu Maintenance, an operator and manager of business and resort hotels. Another is Kotobuki Spirits, a leading retail chain with high popularity among tourists for its concessionaries. The recent depreciation of the yen and benign domestic inflation have further added to the appeal of Japan as a post-pandemic travel destination.
Conversely, we reduced positions in commercial banks, including United Overseas Bank in Singapore and CTBC Financial Holding in Taiwan. The expectation of a longer period of U.S. monetary-tightening policies and a strong U.S. dollar have started to force many other central banks into accelerated tightening and increased the risks of recession in some countries. This has led to heightened risks in lending growth and asset quality trends at commercial banks.
Outlook:
China's zero-COVID policy remains a major impediment to its economic recovery. While the implementation of such restrictive policy could become more pragmatic after October's Party Congress, trying to balance economic growth with pandemic control means a full re-opening of the economy is a low probability event for this year. A weaker Chinese economy, coupled with a hawkish U.S. Fed monetary policy stance and a fragile European economy facing deep energy crisis, could continue rattling investors' confidence. However, by sticking with our total-return investment approach and using dividends as a quality check, we believe the volatile market environment is also one of the best times to look for well-run Asian businesses with structural growth trends intact and upgrade the overall quality of our portfolio holdings.
Top 10 holdings as of September 30, 2022. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MAPIX as of 09/30/2022
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
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 09/30/2022
The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2022, 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.