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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

-0.48%

YTD Return

(as of 05/31/2023)

$13.13

NAV

(as of 05/31/2023)

-0.09

1 Day NAV Change

(as of 05/31/2023)

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 $1.67 billion (04/30/2023)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 50.8%
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 1.10%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 04/30/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund - MAPIX
10/31/2006
MAPIX
-1.11% -6.29% 1.71% -8.60% 1.54% -2.40% 2.39% 6.16%
MSCI All Country Asia Pacific Index
-1.03% -3.80% 3.77% -2.09% 5.39% 1.04% 3.96% 3.88%
As of 03/31/2023
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asia Dividend Fund - MAPIX
10/31/2006
MAPIX
2.39% 2.85% 2.85% -14.36% 4.52% -2.02% 3.03% 6.26%
MSCI All Country Asia Pacific Index
3.24% 4.85% 4.85% -7.42% 8.55% 1.42% 4.57% 3.96%
For the years ended December 31st
Name 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013
Matthews Asia Dividend Fund - MAPIX
MAPIX
-29.57% -2.83% 31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32% 11.27%
MSCI All Country Asia Pacific Index
-16.92% -1.19% 20.07% 19.74% -13.25% 32.04% 5.21% -1.68% 0.29% 12.19%

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 03/31/2023)

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 03/31/2023)
1.64% 30-Day SEC Yield
1.64% 30-Day SEC Yield (excluding expense waiver)
2.75% Dividend Yield

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

Ratings

  • OVERALL
  • out of 10 funds
  • 3 YEAR
  • out of 10 funds
  • 5 YEAR
  • out of 10 funds
  • 1 YEAR
  • 4th
  • 97 out of 99 funds
  • 3 YEAR
  • 4th
  • 94 out of 96 funds
  • 5 YEAR
  • 4th
  • 88 out of 91 funds
  • 10 YEAR
  • 3rd
  • 35 out of 56 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 22 funds

Ratings agency calculation methodology

Portfolio Managers

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

Lead Manager

Elli  Lee photo
Elli Lee

Co-Manager

Siddharth  Bhargava photo
Siddharth Bhargava

Co-Manager

Winnie  Chwang photo
Winnie Chwang

Co-Manager

Portfolio Characteristics

(as of 03/31/2023)
Fund Benchmark
Number of Positions 60 1,490
Weighted Average Market Cap $70.0 billion $87.6 billion
Active Share 83.4 n.a.
P/E using FY1 estimates 16.8x 13.3x
P/E using FY2 estimates 14.9x 12.3x
Price/Cash Flow 11.3 7.5
Price/Book 2.3 1.5
Return On Equity 18.9 14.8
EPS Growth (3 Yr) 12.9% 16.9%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 03/31/2023)
-3.40%
Alpha
0.98
Beta
94.72%
Upside Capture
111.68%
Downside Capture
0.19
Sharpe Ratio
-0.60
Information Ratio
6.68%
Tracking Error
86.94

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 04/30/2023)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.0
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.8
AIA Group, Ltd. Financials China/Hong Kong 2.2
PT Bank Rakyat Indonesia Persero Tbk Financials Indonesia 2.2
Samsung Electronics Co., Ltd. Information Technology South Korea 2.2
Housing Development Finance Corp., Ltd. Financials India 2.1
Nissin Foods Holdings Co., Ltd. Consumer Staples Japan 2.1
ITOCHU Corp. Industrials Japan 2.0
Ajinomoto Co., Inc. Consumer Staples Japan 1.9
Disco Corp. Information Technology Japan 1.9
TOTAL 23.4

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 03/31/2023)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 16.5 18.6 -2.1
Information Technology 16.4 17.6 -1.2
Consumer Discretionary 14.6 14.7 -0.1
Communication Services 10.5 8.9 1.6
Industrials 9.7 11.6 -1.9
Consumer Staples 9.6 5.8 3.8
Real Estate 6.2 3.7 2.5
Health Care 6.1 6.5 -0.4
Materials 3.3 7.5 -4.2
Energy 1.6 2.9 -1.3
Utilities 1.5 2.0 -0.5
Cash and Other Assets, Less Liabilities 3.9 0.0 3.9

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

Country Fund Benchmark Difference
Japan 31.2 32.0 -0.8
China/Hong Kong 27.2 24.8 2.4
Australia 8.9 11.1 -2.2
Taiwan 7.4 9.6 -2.2
India 6.8 8.3 -1.5
South Korea 5.3 7.6 -2.3
Singapore 3.1 2.3 0.8
Indonesia 1.9 1.2 0.7
Thailand 1.8 1.4 0.4
Vietnam 1.6 0.0 1.6
Bangladesh 1.0 0.0 1.0
Malaysia 0.0 0.9 -0.9
Philippines 0.0 0.4 -0.4
New Zealand 0.0 0.3 -0.3
Macau 0.0 0.1 -0.1
Cash and Other Assets, Less Liabilities 3.9 0.0 3.9

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

Asset Type Fund
Common Equities and ADRs 96.2
Cash and Other Assets, Less Liabilities 3.9
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 43.1 58.4 -15.3
Large Cap ($10B-$25B) 20.5 22.1 -1.6
Mid Cap ($3B-$10B) 22.1 18.7 3.4
Small Cap (under $3B) 10.4 0.8 9.6
Cash and Other Assets, Less Liabilities 3.9 0.0 3.9

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)
03/28/2023 03/29/2023 $0.04705 $0.00000 $0.00000 $0.04705 0.3% N.A.
12/13/2022 12/14/2022 $0.00642 $0.00000 $0.00000 $0.00642 0.0% N.A.
09/27/2022 09/28/2022 $0.01921 $0.00000 $0.00000 $0.01921 0.1% N.A.
06/27/2022 06/28/2022 $0.03551 $0.00000 $0.00000 $0.03551 0.2% N.A.
03/28/2022 03/29/2022 $0.05027 $0.00000 $0.00000 $0.05027 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 March 31, 2023

For the quarter ending March 31, 2023, the Matthews Asia Dividend Fund returned 2.85% (Investor Class) and 2.89% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 4.85% over the same period.

Market Environment:

The Asia Pacific region continued to recover in the first quarter with strength relatively broad based across markets as it appears that the U.S. dollar has begun to peak out. A reopening China moved higher as COVID restrictions were removed, as the property sector began to recover with easing liquidity, and as there is a low base for comparable earnings this year. Japan gained with cyclicals in areas like information technology and industrials rallying while Taiwan and South Korea moved higher as there is an ongoing inventory digestion in the technology sector.

India was a major exception as markets fell having entered the year at lofty valuations and as economic growth disappoints already high expectations. The domestic Hong Kong market also struggled as the pivotal property market remains weak and as exports declined markedly.

Performance Contributors and Detractors:

From a country perspective, stock selection in Japan was one of the largest detractors to relative performance during the quarter amid rallies in more cyclical areas that the portfolio is underweight in. Similarly, stock selection in China/Hong Kong detracted as select state-owned enterprises and reopening plays where the portfolio has limited exposure gained while poor earnings delivery from certain holdings hindered performance. Conversely, the portfolio benefited from positive stock selection in Australia because of solid earnings delivery from holdings and an underweight to banks.

At the sector level, stock selections in industrials and consumer discretionary were large detractors. In the case of the latter, disappointing earnings delivery came from certain portfolio holdings in domestic China/Hong Kong. On the other hand, financials was a top contributor as limited exposure to specific areas of commercial banks helped alongside a recovery in Asia Commercial Bank in Vietnam. Underweights to the energy and utilities sectors also boosted relative performance. 

Among individual holdings, the bottom contributor was JD.com as the e-commerce platform fell following concerns that its new subsidy regime for customers will impact margins while the overall market remains competitive. Chinese life science service company Pharmaron Beijing dropped as its controlling shareholders are looking to reduce their stake while earnings disappointed with biologics, cell gene therapy and new overseas manufacturing capabilities hampering profitability. Indian auto parts company Uno Minda also detracted from portfolio returns as, despite solid earnings growth, an expensive valuation of over 40x P/E  and high capital expenditure plans may have weighed.

Conversely, Chinese internet platforms Alibaba and Tencent were the top contributors to the portfolio during the quarter. Alibaba gained as its cheap valuation was accompanied by a return to earnings growth with losses in local consumer services, international e-commerce and digital media all narrowing. We exited our position during the quarter given the stock’s lack of dividend and our preference for other internet platforms in China. Tencent rallied as its games offerings were more resilient than feared while advertising revenues are recovering and it further improved its ecosystem in areas like video. Australian education provider IDP Education moved higher as growth remains strong for the company as English language teaching and student placement services bounce back.

Notable Portfolio Changes:

In the first quarter, we initiated a significant number of new positions in the portfolio and funded these through exiting a large portion of the portfolio that we entered the year with. This created far greater turnover in the portfolio than we would anticipate going forward as we are long-term investors that believe that patience is an important component to returns.

At a country level, these alterations resulted in a major reduction in Vietnam and China, with increases in Japan, Hong Kong and Taiwan. At a sector level, consumer discretionary has been meaningfully reduced alongside industrials, with financials, information technology and consumer staples all rising.

We have attempted to increase the overall portfolio dividend yield, improve the average quality of companies held, and reduce volatility while maintaining sustainable growth following disappointing performance in recent times for the portfolio. As an example, we have included what we deem to be leading businesses with visible growth at reasonable prices, such as AIA Group, Delta Electronics, Keyence, HDFC Ltd., Tata Consultancy Services, Yili, Yum China, and CSL Ltd. To fund this, exits have been made in lower quality businesses such as Kido Group and IHI Corp., non-dividend payers such as Alibaba and Baidu, and overly expensive holdings such as IDP Education and Rakus.

Outlook:

A return to stronger growth for the Chinese economy and company earnings is likely this year. The government has attempted to take a more pro-growth and pro-business stance in policy making and this should help alongside the benefits of reopening and a low base effect. Further, relatively low inflation allows for more policy easing if required. In Japan, questions remain around how sticky inflation is likely to be, particularly as spring wage negotiations may have created a jump in salaries. This has potential implications for yield curve control policies and nominal growth while there is also talk of improving capital efficiency among lowly-valued companies. More broadly, a possible peak in the U.S. dollar may be upon us while valuations for the Asian Pacific region are a relatively modest 13.2x P/E*. These are reasonably supportive factors, however, the increased possibility of a recession in the U.S. driven by the monetary tightening cycle does raise the prospect of general risk aversion and weaker exports. Against what may remain a volatile backdrop, we believe that a quality approach that balances dividend yields and dividend growth should enable the portfolio to deliver for clients over the cycle.

 

Top 10 holdings as of March 31, 2023. Current and future holdings are subject to change and risk.

*Valuation as of April 6, 2023

Average Annual Total Returns - MAPIX as of 03/31/2023
1YR 3YR 5YR 10YR Since Inception Inception Date
-14.36% 4.52% -2.02% 3.03% 6.26% 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 1.10%
Yields as of 03/31/2023
30-Day SEC Yield 1.64%
30-Day SEC Yield (excluding expense waiver) 1.64%
Dividend Yield 2.75%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 03/31/2023, 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.