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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

1.06%

YTD Return

(as of 04/11/2024)

$13.76

NAV

(as of 04/11/2024)

+0.02

1 Day NAV Change

(as of 04/11/2024)

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 $795.88 million (03/31/2024)
Currency USD
Ticker MAPIX
Cusip 577-125-107
Portfolio Turnover 75.9%
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 03/31/2024
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
1.87% 1.80% 1.80% 3.62% -9.37% -0.12% 3.24% 6.11%
MSCI All Country Asia Pacific Index
2.82% 5.13% 5.13% 12.11% -1.96% 4.80% 5.30% 4.41%
As of 03/31/2024
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
1.87% 1.80% 1.80% 3.62% -9.37% -0.12% 3.24% 6.11%
MSCI All Country Asia Pacific Index
2.82% 5.13% 5.13% 12.11% -1.96% 4.80% 5.30% 4.41%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews Asia Dividend Fund - MAPIX
MAPIX
4.69% -29.57% -2.83% 31.25% 11.17% -12.72% 34.69% 4.13% 3.86% -0.32%
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.

Yield

(as of 03/31/2024)
1.56% 30-Day SEC Yield
1.56% 30-Day SEC Yield (excluding expense waiver)
2.80% 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
  • 101 out of 105 funds
  • 3 YEAR
  • 4th
  • 101 out of 101 funds
  • 5 YEAR
  • 4th
  • 97 out of 100 funds
  • 10 YEAR
  • 3rd
  • 38 out of 67 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 03/31/2024)
Fund Benchmark
Number of Positions 54 1,464
Weighted Average Market Cap $91.2 billion $107.5 billion
Active Share 82.7 n.a.
P/E using FY1 estimates 16.2x 14.8x
P/E using FY2 estimates 14.4x 13.3x
Price/Cash Flow 10.4 9.5
Price/Book 2.1 1.7
Return On Equity 17.5 13.8
EPS Growth (3 Yr) 9.0% 13.4%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 03/31/2024)
-7.78%
Alpha
0.93
Beta
81.05%
Upside Capture
116.10%
Downside Capture
-0.73
Sharpe Ratio
-1.44
Information Ratio
5.14%
Tracking Error
90.81

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 03/31/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 5.1
Tencent Holdings, Ltd. Communication Services China/Hong Kong 3.0
Tokio Marine Holdings, Inc. Financials Japan 2.8
ITOCHU Corp. Industrials Japan 2.7
ORIX Corp. Financials Japan 2.6
HDFC Bank, Ltd. Financials India 2.6
Samsung Electronics Co., Ltd. Information Technology South Korea 2.3
Suzuki Motor Corp. Consumer Discretionary Japan 2.3
Macquarie Korea Infrastructure Fund Financials South Korea 2.2
Delta Electronics, Inc. Information Technology Taiwan 2.1
TOTAL 27.7

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
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Financials 19.5 19.4 0.1
Information Technology 18.1 20.5 -2.4
Consumer Discretionary 13.5 14.9 -1.4
Consumer Staples 9.8 4.7 5.1
Communication Services 9.3 7.6 1.7
Industrials 8.6 12.5 -3.9
Real Estate 4.6 3.2 1.4
Utilities 3.8 2.1 1.7
Health Care 3.5 5.7 -2.2
Materials 3.3 6.5 -3.2
Energy 2.0 3.0 -1.0
Cash and Other Assets, Less Liabilities 4.1 0.0 4.1

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

Country Fund Benchmark Difference
Japan 31.3 34.9 -3.6
China/Hong Kong 23.0 18.4 4.6
Australia 9.9 10.7 -0.8
Taiwan 9.1 11.0 -1.9
India 7.9 11.1 -3.2
South Korea 6.2 8.1 -1.9
Singapore 3.3 2.0 1.3
Indonesia 1.9 1.2 0.7
Thailand 1.6 1.0 0.6
Vietnam 1.6 0.0 1.6
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 4.1 0.0 4.1

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

Asset Type Fund
Common Equities and ADRs 96.0
Cash and Other Assets, Less Liabilities 4.1
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 51.8 63.2 -11.4
Large Cap ($10B-$25B) 13.3 20.9 -7.6
Mid Cap ($3B-$10B) 20.0 15.4 4.6
Small Cap (under $3B) 10.8 0.5 10.3
Cash and Other Assets, Less Liabilities 4.1 0.0 4.1

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)
03/26/2024 03/27/2024 $0.08641 $0.00000 $0.00000 $0.08641 0.6% N.A.
12/13/2023 12/14/2023 $0.03653 $0.00000 $0.00000 $0.03653 0.3% N.A.
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.
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 December 31, 2023

For the year ending December 31, 2023, the Matthews Asia Dividend Fund returned 4.69% (Investor Class) and 4.77% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 11.81% over the same period. For the fourth quarter, the Fund returned 7.08% (Investor Class) and 7.04% (Institutional Class), while the benchmark returned 8.00%.

Market Environment

Asia Pacific markets rallied during the final quarter of the year, helping drive full-year performance to a respectable double-digit level although this did lag behind the returns of other major geographies. The year started brightly with the hope of a strong recovery in the Chinese economy—after reopening from prior COVID restrictions—alongside robust performance from other markets. This was, however, short lived for China, with markets there peaking in January and ending the year in negative territory. Issues such as the challenged property market, soft consumer sentiment, regulatory changes, dampened animal spirits and geopolitical tensions all weighed on China as the market ended the year at around 9 x earnings. Much of the rest of the region proved more fruitful for investors during 2023. India was again a strong performer rising over 20% as it benefited in part from capital flows as earnings delivery was robust while the political and monetary outlooks also appear supportive. Japan similarly gained as reasonable earnings growth was accompanied by a continuation of improvements in areas such as corporate governance and shareholder returns. The technology heavy markets of South Korea and Taiwan also made meaningful gains in 2023.

Performance Contributors/Detractors

At the country level, the portfolio’s overweight and stock selection in Hong Kong/China was the largest detractor to total and relative returns in 2023 in part because this market suffered relative to the broader region. Stock selection in Japan also hurt relative performance as did underweights and stock selection in Taiwan and India. Conversely, the portfolio’s off-benchmark position in Vietnam aided relative performance while stock selection in Australia and Indonesia was also positive. 

At the sector level, stock selection in consumer discretionary was the biggest detractor to total and relative returns. Stock selection and a slight underweight in industrials also detracted. On the other hand, the portfolio’s stock selection within information technology (IT) was the biggest contributor to total and relative returns despite the negative of a slight underweight position. Allocation and stock selection in utilities and energy also contributed to relative performance. 

At the stock level, some of the largest detractors to relative performance for the year came from companies within China. Duty free retailer China Tourism Group Duty Free Corp. was the worst performer and the biggest detractor to returns, potentially due to disappointing earnings as well as the possibility of rising competition in certain markets. Online retailer JD.com also fell significantly, likely given the backdrop of a soft consumer as well as rising competitive intensity in the industry. Logistics and distribution company Milkyway Chemical Supply Chain Service similarly dropped alongside weaker-than expected-earnings while consumer-oriented companies Wuliangye Yibin and Yum China were also detractors amid domestic macro headwinds. For Yum China, there also appear to be worries around competitive pressures.  

The best performer and largest contributor to returns came from Japan, with semiconductor equipment manufacturer Disco Corp. posting a significant gain. A leader in precision processing equipment for cutting, grinding and polishing, the stock moved up in part due to its exposure to solid growth areas such as generative artificial intelligence (AI) and power semiconductors. Fellow Japanese company Shin-Etsu Chemical was a significant contributor to returns and gained on hopes of improving outlooks for certain end markets such as semiconductors. Australian small appliance company Breville Group also aided returns as its medium-term growth outlook still appears to be robust in areas such as its core coffee offering. Mega cap Samsung Electronics was a significant contributor to absolute returns while Indian transmission business Power Grid also gained. 

Notable Portfolio Changes

The portfolio underwent significant alterations during the course of the year in a bid to change certain country and sector allocations as well as to help to improve the portfolio’s balance of growth and yield while also attempting to ensure that the portfolio was one with a bias toward what we believe to be quality companies. This led to a reduction in the weightings of Vietnam and China, with increases in areas such as Japan, Hong Kong, and Taiwan. At a sector level, weightings in areas such as consumer discretionary, health care, and industrials declined while financials, IT and consumer staples, among others, all rose. 

These adjustments led to a substantially higher turnover for the portfolio during 2023 than should be expected going forward as we aim to be long-term investors in businesses that we allocate our shareholders’ capital toward. 

Fourth quarter activity was notably lower. We exited positions in leading medical device and endoscope maker Olympus Corp. in Japan as well as in China Tourism Group Duty Free given declining conviction in both holdings.  

Outlook

Monetary policy expectations for the U.S. in 2024 have changed meaningfully in recent months with hopes that interest rates have peaked and that cuts will return. This helped to propel markets upward as 2023 drew to a close and the trajectory of these alterations, in conjunction with how contained inflation actually is and whether the U.S. can attain a soft landing, will all play a role in determining market movements over the next year. These will also, in part, determine stock prices in Asia in the near term as it may allow some easing while the U.S. dollar could also be impacted. Beyond this, we continue to remain concerned about the challenges that China faces within its own economy as well as broader geopolitical tensions that appear to be structural in nature. While these are reasons for caution there are also reasons to be constructive; weak sentiment, policy flexibility, appealing valuations and an earnings base that companies have potential to grow from, being a few. In India, although valuations are expensive, structural earnings growth appears intact while Taiwan and Korea are also expected to grow reasonably in 2024. For Japan, the positive forces of corporate governance improvements and increasing shareholder returns appear to still be in place although it is important to monitor the potential for the end of negative interest rates alongside currency movements and the possible implications that this may have for select sectors.

Given what may be a peak in the cost of capital, robust valuations of 12.2x FY24 earnings and EPS growth expected to be over 14% for the region in 2024, the outlook for Asia Pacific appears solid although scope for volatility remains. We continue to think that a focus on investing in what we believe to be quality companies at reasonable prices that also generally provide some form of current income is well placed to deliver for clients over the long term.

Top 10 holdings as of December 31, 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 03/31/2024
1YR 3YR 5YR 10YR Since Inception Inception Date
3.62% -9.37% -0.12% 3.24% 6.11% 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 03/31/2024
30-Day SEC Yield 1.56%
30-Day SEC Yield (excluding expense waiver) 1.56%
Dividend Yield 2.80%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 03/31/2024, 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.