12/31/1998
Inception Date
17.21%
YTD Return
(as of 10/16/2026)
$28.26
NAV
(as of 10/16/2026)
-0.33
1 Day NAV Change
(as of 10/16/2026)
Long-term capital appreciation
Under normal circumstances, the Matthews Japan 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 located in Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health.
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. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
These and other risks associated with investing in the Fund can be found in the prospectus.
| Inception Date | 12/31/1998 | |
| Fund Assets | $749.69 million (09/30/2026) | |
| Currency | USD | |
| Ticker | MJFOX | |
| Cusip | 577-130-800 | |
| Benchmark | MSCI Japan Index | |
| Geographic Focus | Japan | |
| Gross Expense Ratio | 1.16% | |
| Objective | Long-term capital appreciation |
| Strategy | Under normal circumstances, the Matthews Japan Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in Japan. The Fund seeks to invest in companies capable of sustainable growth based on the fundamental characteristics of those companies, including balance sheet information; number of employees; size and stability of cash flow; management’s depth, adaptability and integrity; product lines; marketing strategies; corporate governance; and financial health. |
| Risks |
Investments in Asian securities may involve risks such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.
The risks associated with investing in the Fund can be found in the prospectus |
Source: BNY Mellon Investment Servicing (US) Inc. All performance is in US$.
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.
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.
(as of 09/30/2026)
CATEGORY: Japan Stock
| OVERALL | 2 stars | out of 37 funds |
| 3 YEAR | 3 stars | out of 37 funds |
| 5 YEAR | 2 stars | out of 35 funds |
| 10 YEAR | 2 stars | out of 25 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.
Portfolio Manager
Shuntaro Takeuchi is a Portfolio Manager at Matthews. Prior to joining the firm in 2016, he was an Executive Director for Japan Equity Sales at UBS Securities LLC in New York. Beginning in 2003, he worked on both Japanese Equity and International Equity Sales at UBS Japan Securities, based in Tokyo, and held the position of Special Situations Analyst from 2006 to 2008, and Head of International Equity Sales from 2009 to 2013. Before that, he worked at Merrill Lynch Japan from 2001 to 2003 in U.S. Equity Sales. Shuntaro received a B.A. in Commerce and Management from Hitotsubashi University in Tokyo. He is fluent in Japanese.
Portfolio Manager
Donghoon Han is a Portfolio Manager at Matthews. Prior to joining Matthews in 2020, Donghoon was Vice President and portfolio manager at Goldman Sachs Asset Management in Tokyo, responsible for investments in technology, automotive and transportation sectors in Japan. From 2014 to 2016, he was a senior associate at Citadel Global Equities researching technology and industrial sectors in Japan. From 2010 to 2014, Donghoon worked at Dodge & Cox as an equity research associate covering global technology sector with a focus on semiconductors and electronic components. He received B.A. in International Liberal Arts from Waseda University in Tokyo. Donghoon is fluent in Japanese and Korean. He is a Chartered Member of the Securities Analysts Association of Japan.
Sources: Factset Research Systems, Inc.
Fund Risk Metrics are reflective of Investor share class.
Source: FactSet Research Systems
Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.
Source: BNY Mellon Investment Servicing (US) Inc.
Sector data based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.
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.
Visit our Glossary of Terms page for definitions and additional information.
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 ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, 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 MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.
The MSCI Korea Index is a free float-adjusted market capitalization-weighted index of Korean equities listed in Korea.
The MSCI Korea 25/50 Index is designed to measure the performance of the large and mid cap segments of the Korean market. It applies certain investment limits that are imposed on regulated investment companies, or RICs, under the current US Internal Revenue Code.
Indexes are for comparative purposes only and it is not possible to invest directly in an index.
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, 2026
Summary
Market Environment
Japanese equities advanced during the quarter, although returns varied across sectors, market cap and investment styles. Notably, the MSCI Japan Value Index outperformed the MSCI Japan Growth Index by more than 10% in U.S. dollar terms.
Investor focus remained on the path of Bank of Japan policy normalization, rising Japanese government bond yields and movements in the yen. These factors influenced market leadership, particularly across financial companies, exporters and other businesses sensitive to domestic interest rates and currency movements. Meanwhile, manufacturing activity remained subdued and inflation stayed above the Bank of Japan's long-term target, leaving investors to balance a gradually evolving macroeconomic backdrop with generally resilient corporate earnings.
Market leadership broadened as investors placed greater emphasis on earnings delivery, capital returns and company-specific fundamentals. Financial companies continued to benefit from a higher-rate environment and improving shareholder-return policies, while select industrial and service-oriented businesses were supported by digitalization, infrastructure investment and efforts to improve productivity. Within technology results became more differentiated as investors reassessed near-term expectations for semiconductor demand and capital spending.
Against this backdrop, companies demonstrating durable earnings growth and credible paths to higher profitability were generally better positioned, while businesses more dependent on valuation expansion faced greater scrutiny. Disciplined stock selection and valuation awareness therefore remained central to the Fund's investment approach.
Performance
For the quarter ended September 30, 2026, the Matthews Japan Fund returned 1.76%, (Investor Class) and 1.76% (Institutional Class) while its benchmark, the MSCI Japan Index, returned 6.10% over the same period.
By sector, Industrials added to relative performance. Consumer Discretionary was the largest sector detractor, while Financials, Materials, Communication Services, Consumer Staples, Information Technology and Health Care also weighed on results.
Industrials was the largest positive sector contributor. Recruit Holdings, a staffing and human-resources technology company, gained 53% and was the largest holding-level contributor, supported by operating performance and earnings momentum. Hitachi, a diversified industrial and technology company with businesses spanning digital systems, energy and infrastructure, gained 26%, as investors continued to recognize its improving earnings profile and portfolio transformation. Toyota Tsusho, a diversified trading company with exposure to mobility, industrial and resource-related businesses, advanced 24% on continued business momentum and was another significant relative contributor. GO Inc., a major Japanese mobility and technology company, gained 61%, providing a further positive contribution.
Information Technology
Information Technology detracted modestly from relative performance, as weakness across parts of the semiconductor allocation offset positive stock selection elsewhere. NEC, an information technology and network-services company, gained 25%, supported by earnings momentum and demand related to digitalization. Murata Manufacturing was the sector’s largest positive relative contributor supported by continued investor interest in companies tied to AI-related infrastructure demand. Tokyo Electron, a leading semiconductor production-equipment company, declined -22% and was the largest holding-level detractor amid concerns around the semiconductor capital spending cycle. Renesas Electronics, a supplier of automotive and industrial semiconductors, declined -29% and was also a detractor amid continued uncertainty in automotive and industrial end markets. Kioxia Holdings, a producer of NAND flash memory used in data-storage applications, fell -41% and detracted from relative performance amid weaker sentiment toward memory-related stocks.
The longer-term investment cases across the semiconductor and technology holdings remain supported by semiconductor content growth, digital infrastructure and disciplined capital investment. However, near-term share-price performance may vary with industry demand, customer spending and changing expectations through the capital-expenditure cycle.
Consumer Discretionary and Other Sectors
Consumer Discretionary was the largest sector detractor. Sumitomo Electric Industries, a manufacturer of automotive wiring systems, power cables and electronic components, declined -30% and was one of the largest holding-level detractors as investors became more cautious on cyclical and auto-related demand. This weakness was partly offset by Sony Group, a global entertainment and technology company with businesses across gaming, music, film and image sensors, which gained 19% and contributed positively to relative performance.
Materials also detracted. Shin-Etsu Chemical, a global producer of semiconductor materials and specialty chemicals, declined -12% as investors reassessed near-term demand and pricing conditions. Within Financials, several holdings generated positive absolute returns, including Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Tokio Marine Holdings. However, the sector detracted on a relative basis, reflecting stock selection and the portfolio’s positioning relative to the benchmark.
Positioning
Portfolio changes during the quarter were measured and remained consistent with the Fund's focus on durable earnings growth and long-term margin expansion. Exposure to Industrials and Financials increased, while Information Technology exposure declined following gains earlier in the year. These changes reflected bottom-up security selection and valuation discipline rather than broad sector-level views.
We initiated a position in Mizuho Financial Group, one of Japan's major banking groups, with businesses spanning commercial banking, trust banking, securities and asset-management. We believe the position provides exposure to a business that may benefit from a gradually normalizing domestic interest-rate environment, improving profitability and a greater focus on capital returns.
We also added Yamaha Motor, a global manufacturer of motorcycles, marine products and other mobility equipment. In our view, the investment provides exposure to a diversified franchise with established global brands and opportunities to improve earnings through its product mix, operating discipline and demand across mobility and marine markets.
The position in Sumitomo Electric Industries was exited during the quarter. While the company retains competitive positions across automotive wiring, power infrastructure and electronic components, we exited the position as the near-term risk-reward became less favorable. We reallocated capital to opportunities with clearer earnings visibility and potential for improved returns.
Outlook
We remain constructive on Japanese equities, supported by broadly favorable macro conditions and policy signals. Our core view is unchanged: Japan’s equity performance is increasingly earnings-driven, with AI a key driver of returns and a source of growing concentration risk. In this environment, we continue to favor growth at a reasonable price (GARP) opportunities with strong earnings visibility, company-specific earnings upgrades, and beneficiaries of ongoing corporate governance reform, while remaining mindful of potential style rotation should market breadth begin to normalize.
Importantly, relative to other North Asian markets such as Taiwan and South Korea, Japan offers a broader, more liquid opportunity set beyond AI-related themes. While investors can access similar structural growth drivers, including automation, digitalization, industrial upgrading, and advanced manufacturing, Japan offers a wide range of sectors and companies, supporting diversified exposure and potentially lower beta profile.
The structural case for Japan remains intact in our view, underpinned by the progressive globalization of Japanese corporates, expanding access to higher-growth end markets, with globally oriented companies delivering strong earnings growth. In parallel, we continue to view innovation as a persistent alpha source in Japan.
Overall, we believe the market is transitioning from a beta-driven re-rating phase to a differentiation phase, where alpha generation could be less from broad multiple expansion and more from identifying sustainable earnings compounders within an increasingly distorted factor landscape.
Our approach reflects our long-standing observation that Japanese equity returns are primarily earnings driven. We therefore maintain diversified exposure across three different earnings profiles: Linear Growth, Cyclical Growth, and Idiosyncratic Growth. This framework aims to capture varied return drivers while managing risk control.
Linear Growth holdings provide portfolio stability through companies with earnings visibility remains supported by durable structural trends. Cyclical Growth remains an increasingly selective source of upside, particularly in market-leading manufacturing and selected financials exposed to global industrial activity and capital expenditure cycles, as well as policy supported domestic investment themes tied to infrastructure, energy security, defense. Idiosyncratic Growth offers opportunities where company specific catalysts can offset declining macro visibility. Japan’s corporate governance reforms remain an important differentiator, with our focus on companies demonstrating tangible return-on-equity (ROE) improvement and shareholder value creation.
View the Fund's Top 10 holdings as of September 30, 2026. Current and future holdings are subject to change and risk.
Average Annual Total Returns - MJFOX as of 09/30/2026
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
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. In addition, because the fund concentrates its investments in a single-country, its share price may be more volatile, and more affected by political, economic and other events in the country in which it invests than that of funds that are not as geographically concentrated.