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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

0.74%

YTD Return

(as of 12/01/2023)

$13.22

NAV

(as of 12/01/2023)

+0.04

1 Day NAV Change

(as of 12/01/2023)

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 $1.18 billion (10/31/2023)
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 10/31/2023
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
-3.35% -11.58% -5.51% 4.75% -9.54% -1.18% 1.65% 5.51%
MSCI All Country Asia Pacific Index
-4.22% -11.10% -0.84% 13.78% -1.70% 2.88% 3.31% 3.48%
As of 09/30/2023
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
-3.81% -5.01% -2.23% 2.87% -8.49% -2.53% 2.17% 5.75%
MSCI All Country Asia Pacific Index
-2.44% -2.65% 3.52% 16.48% 0.06% 1.71% 4.04% 3.77%
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 09/30/2023)

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 09/30/2023)
1.93% 30-Day SEC Yield
1.93% 30-Day SEC Yield (excluding expense waiver)
3.01% 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
  • 106 out of 106 funds
  • 3 YEAR
  • 4th
  • 103 out of 103 funds
  • 5 YEAR
  • 4th
  • 100 out of 101 funds
  • 10 YEAR
  • 3rd
  • 45 out of 65 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 09/30/2023)
Fund Benchmark
Number of Positions 57 1,544
Weighted Average Market Cap $68.7 billion $82.0 billion
Active Share 83.6 n.a.
P/E using FY1 estimates 15.6x 13.9x
P/E using FY2 estimates 13.9x 12.4x
Price/Cash Flow 9.9 7.6
Price/Book 2.1 1.5
Return On Equity 17.3 14.6
EPS Growth (3 Yr) 8.4% 15.9%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 09/30/2023)
-8.58%
Alpha
0.94
Beta
77.84%
Upside Capture
118.89%
Downside Capture
-0.61
Sharpe Ratio
-1.64
Information Ratio
5.21%
Tracking Error
90.83

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 10/31/2023)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 4.5
ITOCHU Corp. Industrials Japan 2.5
HDFC Bank, Ltd. Financials India 2.5
Tencent Holdings, Ltd. Communication Services China/Hong Kong 2.3
PT Bank Rakyat Indonesia Persero Tbk Financials Indonesia 2.3
Tokio Marine Holdings, Inc. Financials Japan 2.3
ORIX Corp. Financials Japan 2.3
AIA Group, Ltd. Financials China/Hong Kong 2.3
Samsung Electronics Co., Ltd. Information Technology South Korea 2.3
NetEase, Inc. Communication Services China/Hong Kong 2.2
TOTAL 25.5

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 09/30/2023)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 18.5 19.6 -1.1
Information Technology 16.3 17.6 -1.3
Consumer Discretionary 15.0 15.4 -0.4
Communication Services 11.6 8.2 3.4
Consumer Staples 10.3 5.4 4.9
Industrials 10.1 12.2 -2.1
Real Estate 4.7 3.4 1.3
Health Care 4.4 6.1 -1.7
Utilities 3.6 2.0 1.6
Materials 3.3 7.1 -3.8
Energy 1.9 3.0 -1.1
Cash and Other Assets, Less Liabilities 0.4 0.0 0.4

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

Country Fund Benchmark Difference
Japan 30.2 33.3 -3.1
China/Hong Kong 28.1 22.5 5.6
Australia 9.6 10.7 -1.1
India 8.3 10.1 -1.8
Taiwan 7.6 9.4 -1.8
South Korea 6.4 7.8 -1.4
Singapore 3.4 2.1 1.3
Indonesia 2.4 1.3 1.1
Thailand 1.5 1.2 0.3
Vietnam 1.5 0.0 1.5
Bangladesh 0.4 0.0 0.4
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 0.4 0.0 0.4

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

Asset Type Fund
Common Equities and ADRs 99.6
Cash and Other Assets, Less Liabilities 0.4
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 45.1 58.4 -13.3
Large Cap ($10B-$25B) 22.8 21.2 1.6
Mid Cap ($3B-$10B) 21.6 19.3 2.3
Small Cap (under $3B) 10.1 1.1 9.0
Cash and Other Assets, Less Liabilities 0.4 0.0 0.4

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)
09/26/2023 09/27/2023 $0.06994 $0.00000 $0.00000 $0.06994 0.5% N.A.
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 September 30, 2023

For the quarter ending September 30, 2023, the Matthews Asia Dividend Fund returned -5.01% (Investor Class) and -4.94% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned -2.65%.

Market Environment:

The last quarter was a challenge for most major markets, both developed and emerging. Resilience in the U.S. fueled concerns that the Federal Reserve will sustain higher for longer interest rates and this pressured risk assets globally. In addition, a rise in oil prices and renewed strength in the U.S. dollar have worked against emerging markets. Investors are also starting to re-evaluate the chances of a liquidity-induced recession in developed economies which could hamper demand for emerging market-originated exports. In China, economic data continued to disappoint while negative news about the real estate sector re-emerged. On a more optimistic note, the cadence of policy announcements aimed at supporting China’s economy seems to suggest that the government is keen on getting its key sectors moving again. Elsewhere, India’s equity market performed strongly in the period helped by a robust macroeconomic backdrop, resilient corporate earnings and solid inflows.

Performance Contributors and Detractors:

At the regional level, the portfolio’s stock selection in China/Hong Kong was the largest detractor to relative performance in the period. Internet platforms such as JD.com and Tencent Holdings among some other economically sensitive holdings hurt performance. Stock selection in Japan was also negative as certain holdings across a variety of sectors fell throughout the quarter, and some of our holdings in India struggled to participate in that market’s move upward. On the other hand, the portfolio’s off-benchmark allocation to the frontier market of Vietnam was the top contributor to relative returns while stock selection in South Korea was also helpful as the portfolio’s more limited holdings declined less than the market on average, aided by a lack of exposure to areas such as those linked to electric vehicle batteries.

At the sector level, stock selection in financials and consumer discretionary weighed on relative performance. In contrast, an underweight and stock selection within information technology (IT) and stock selection in consumer staples contributed to returns.

At the holdings level, AIA Group was the largest detractor to total returns during the period. Although the company continued to deliver what we believe was robust value of new business growth in the first half, the stock has performed poorly in recent months. This is potentially due to concerns over the growth and margin profile of its expansion in China combined with overall fund flow in Asia equity markets negatively impacting the stock. Kakaku.com, a Japanese internet company that includes a price comparison platform as well as other services such as restaurant promotions, declined as results remained weaker than hoped. Fellow Japanese company Keyence, a leader in industrial automation and inspection equipment, also sputtered on earnings given the softer backdrop for automation demand and some areas of rising costs. Conversely, Vietnamese IT services company FPT Corp was the biggest contributor to total returns as the company has been seeing reasonable earnings growth momentum, particularly within digital transformation. Australian refinery, distributor and retailer Ampol also gained amid decent results despite a refinery outage given growth in non-fuel and international earnings. Disco Corp., a Japanese leader in precision processing equipment for cutting, grinding and polishing in the technology industry, moved up further in part due to its exposure to higher growth areas such as generative AI and power semiconductors.

Notable Portfolio Changes:

We exited Japanese life insurer Dai Ichi Life during the quarter. Although not expensive, we believe that the company has somewhat limited sustainable growth drivers and that these funds are better utilized elsewhere within the portfolio.

Outlook:

Questions remain over the economic outlook in the U.S. as markets digest the prospect that the Federal Reserve will maintain a policy of higher rates for longer. This could also impact certain Asian markets given they may have less scope for monetary easing while facing tight funding costs. China is still dealing with many challenges that shouldn’t be dismissed, including a soft property market, liquidity issues among developers, low consumer confidence and what appear to be dashed entrepreneurial spirits. This economic weakness may allow for some policy easing in China as demonstrated by recent moves. This, alongside significant household savings, provides a degree of comfort at a macroeconomic level. At a microeconomic level, weak sentiment toward the Chinese market, a reasonable base for earnings comparisons in 2024 and appealing valuations are also reasons to be constructive. In Japan, near-term projected earnings growth remains acceptable, and it is the combination of potentially better shareholder returns and the increase in inflation that justify some continued optimism. For the region more broadly, valuations are moderate. The MSCI Asia Pacific Index trades at 12.4x FY24 P/E with over 13% growth expected for next year on current estimates.  While this appears reasonably attractive, the macroeconomic backdrop remains uncertain and potentially volatile in our estimation. We continue to focus on keeping the portfolio invested in those companies that we believe can manage through such an environment as well as serve our clients well over the long term.

Top 10 holdings as of September 30, 2023. Current and future holdings are subject to change and risk. Dividends are not guaranteed and may fluctuate.

Average Annual Total Returns - MAPIX as of 09/30/2023
1YR 3YR 5YR 10YR Since Inception Inception Date
2.87% -8.49% -2.53% 2.17% 5.75% 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 09/30/2023
30-Day SEC Yield 1.93%
30-Day SEC Yield (excluding expense waiver) 1.93%
Dividend Yield 3.01%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2023, 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.