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Matthews Asian Growth and Income Fund
MACSX

A special meeting of the Matthews Asian Growth and Income Fund’s shareholders is expected to be held in late January 2025 for the purpose of voting on the Fund’s reorganization with the Matthews Emerging Markets Equity Fund. If approved, the reorganization is expected close in mid-February 2025. Read More

Snapshot
  • Seeks upside participation while aiming to provide some downside protection in Asia ex Japan
  • Utilize income-paying equities and convertible bonds to help mitigate downside risk and volatility
  • Offers a relatively stable means of participating in Asia’s long-term growth

09/12/1994

Inception Date

12.27%

YTD Return

(as of 11/04/2024)

$13.74

NAV

(as of 11/04/2024)

+0.04

1 Day NAV Change

(as of 11/04/2024)

Objective

Long-term capital appreciation with some current income.

Strategy

Under normal circumstances, the Matthews Asian Growth and Income 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 common stock, preferred stock and other equity securities, and convertible securities as well as fixed-income securities, of any duration or quality, of companies located in Asia. The Fund attempts to offer investors a relatively stable means of participating in a portion of the Asian region’s growth prospects, while providing some downside protection, in comparison to a portfolio that invests purely in common stocks. The strategy of owning convertible bonds and dividend-paying equities is designed to help the Fund to meet its investment objective while helping to reduce the volatility of its portfolio.

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.

These and other risks associated with investing in the Fund can be found in the prospectus.

Fund Facts
Inception Date 09/12/1994
Fund Assets $295.77 million (09/30/2024)
Currency USD
Ticker MACSX
Cusip 577-130-206
Portfolio Turnover 12.0%
Benchmark MSCI All Country Asia ex Japan 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 1.15%

Performance

  • Monthly
  • Quarterly
  • Calendar Year
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As of 09/30/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund - MACSX
09/12/1994
MACSX
7.39% 10.82% 16.35% 23.45% 0.06% 4.21% 3.06% 7.96%
MSCI All Country Asia ex Japan Index
8.47% 10.55% 21.52% 29.39% 0.98% 6.90% 5.71% 4.70%
As of 09/30/2024
Average Annual Total Returns
Name 1MO 3MO YTD 1YR 3YR 5YR 10YR Since Inception Inception Date
Matthews Asian Growth and Income Fund - MACSX
09/12/1994
MACSX
7.39% 10.82% 16.35% 23.45% 0.06% 4.21% 3.06% 7.96%
MSCI All Country Asia ex Japan Index
8.47% 10.55% 21.52% 29.39% 0.98% 6.90% 5.71% 4.70%
For the years ended December 31st
Name 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014
Matthews Asian Growth and Income Fund - MACSX
MACSX
3.33% -18.43% 0.04% 16.00% 17.26% -10.96% 21.85% 1.34% -4.50% -0.65%
MSCI All Country Asia ex Japan Index (USD)
6.34% -19.36% -4.46% 25.36% 18.52% -14.12% 42.08% 5.76% -8.90% 5.11%

MSCI AC Asia ex Japan Index since inception value calculated from 8/31/94.

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 06/30/2024)

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 09/30/2024)
1.49% 30-Day SEC Yield
1.49% 30-Day SEC Yield (excluding expense waiver)
3.06% Dividend Yield

Dividend Yield (trailing) Source: FactSet Research Systems, Bloomberg, Matthews
30-Day SEC Yield Source: BNY Mellon Investment Servicing (US) Inc.

Ratings

  • OVERALL
  • out of 43 funds
  • 3 YEAR
  • out of 43 funds
  • 5 YEAR
  • out of 39 funds
  • 10 YEAR
  • out of 29 funds
  • 1 YEAR
  • 2nd
  • 17 out of 33 funds
  • 3 YEAR
  • 2nd
  • 10 out of 31 funds
  • 5 YEAR
  • 3rd
  • 22 out of 30 funds
  • 10 YEAR
  • 4th
  • 18 out of 20 funds
  • SINCE INCEPTION
  • 1st
  • 1 out of 4 funds

Ratings agency calculation methodology

Portfolio Managers

Kenneth  Lowe, CFA photo
Kenneth Lowe, CFA

Lead Manager

Siddharth  Bhargava photo
Siddharth Bhargava

Co-Manager

Elli  Lee photo
Elli Lee

Co-Manager

Portfolio Characteristics

(as of 09/30/2024)
Fund Benchmark
Number of Positions 45 1,070
Weighted Average Market Cap $188.7 billion $170.6 billion
Active Share 75.4 n.a.
Price/Cash Flow 11.2 9.5
Price/Book 2.6 1.9
Return On Equity 19.5 15.0
EPS Growth (3 Yr) 8.0% 12.9%

Sources: Factset Research Systems, Inc.

Risk Metrics (3 Yr Return)

(as of 06/30/2024)
-1.07%
Alpha
0.88
Beta
76.54%
Upside Capture
87.28%
Downside Capture
-0.48
Sharpe Ratio
0.03
Information Ratio
4.89%
Tracking Error
94.19

Fund Risk Metrics are reflective of Investor share class.

Sources: Zephyr StyleADVISOR

Top 10 Holdings

(as of 09/30/2024)
Name Sector Country % Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. Information Technology Taiwan 10.7
Tencent Holdings, Ltd. Communication Services China/Hong Kong 6.3
AIA Group, Ltd. Financials China/Hong Kong 5.2
HDFC Bank, Ltd. Financials India 4.9
Tata Consultancy Services, Ltd. Information Technology India 2.9
Samsung Electronics Co., Ltd. Information Technology South Korea 2.8
JD.com, Inc. Consumer Discretionary China/Hong Kong 2.5
HKT Trust & HKT, Ltd. Communication Services China/Hong Kong 2.4
Macquarie Korea Infrastructure Fund Financials South Korea 2.3
Inner Mongolia Yili Industrial Group Co., Ltd. Consumer Staples China/Hong Kong 2.2
TOTAL 42.2

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 09/30/2024)
  • Sector Allocation
  • Country Allocation
  • Asset Type Breakdown
  • Market Cap Exposure
Sector Fund Benchmark Difference
Information Technology 22.8 25.1 -2.3
Financials 20.6 21.1 -0.5
Communication Services 13.8 10.1 3.7
Industrials 10.0 7.5 2.5
Consumer Discretionary 9.6 15.0 -5.4
Consumer Staples 7.9 4.3 3.6
Real Estate 5.6 2.4 3.2
Materials 3.6 4.5 -0.9
Health Care 3.4 3.7 -0.3
Utilities 1.7 2.8 -1.1
Energy 0.0 3.6 -3.6
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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

Country Fund Benchmark Difference
China/Hong Kong 38.1 36.5 1.6
India 16.0 22.2 -6.2
Taiwan 15.1 19.8 -4.7
South Korea 9.5 11.9 -2.4
Singapore 6.8 3.6 3.2
Thailand 3.5 1.7 1.8
France 3.0 0.0 3.0
United States 2.0 0.0 2.0
Philippines 1.9 0.6 1.3
Indonesia 1.6 1.9 -0.3
New Zealand 1.4 0.0 1.4
Malaysia 0.0 1.7 -1.7
Macau 0.0 0.2 -0.2
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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

Asset Type Fund
Common Equities and ADRs 91.3
Convertible Bonds 7.8
Cash and Other Assets, Less Liabilities 1.0
Equity market cap of issuer Fund Benchmark Difference
Mega Cap (over $25B) 61.1 63.8 -2.7
Large Cap ($10B-$25B) 11.6 21.7 -10.1
Mid Cap ($3B-$10B) 19.3 14.3 5.0
Small Cap (under $3B) 7.1 0.2 6.9
Cash and Other Assets, Less Liabilities 1.0 0.0 1.0

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)
06/25/2024 06/26/2024 $0.34750 $0.00000 $0.00000 $0.34750 2.6% N.A.
12/13/2023 12/14/2023 $0.17871 $0.00000 $0.00000 $0.17871 1.5% N.A.
06/27/2023 06/28/2023 $0.16500 $0.00000 $0.00000 $0.16500 1.3% N.A.
12/13/2022 12/14/2022 $0.13141 $0.00000 $0.41241 $0.54382 4.1% N.A.
06/27/2022 06/28/2022 $0.07829 $0.00000 $0.00000 $0.07829 0.6% N.A.

 

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, 2024

Market Environment

  • The last quarter witnessed a significant rally in the final few weeks of September as China unveiled meaningful monetary stimulus. This included measures such as cutting rates, reducing reserve ratio requirements, efforts to bolster the stock market and multiple initiatives to support the property market. Added to this was a new focus by China’s leadership on hitting growth targets and possibility that larger fiscal support may be forthcoming.
  • Elsewhere, most other markets gained with Southeast Asia delivering double digit returns. This was likely aided by the Federal Reserve cutting interest rates by 50 basis points (0.5%), its first cut in more than four years.
  • South Korea was the weakest market in the region with semiconductor stocks particularly soft. Fellow technology-heavy hub Taiwan also failed to keep pace with the benchmark despite the potential growth opportunities that artificial intelligence (AI)-linked segments offer, in part as prior performance had been strong and as questions arose over valuations.

Contributors and Detractors

  • For the quarter ended September 30, 2024, the Matthews Asian Growth and Income Fund returned 10.82%, (Investor Class) and 10.84% (Institutional Class) while its benchmark, the MSCI All Country Asia ex Japan Index, returned 10.55% over the same period.
  • On a country basis, the top three contributors to relative performance were Taiwan due to an underweight allocation, India due to stock selection and Thailand due to an overweight allocation and stock selection. The top three detractors were China/Hong Kong due to stock selection, Malaysia due to zero allocation and New Zealand due to an off-benchmark allocation.
  • On a sector basis, the top three contributors to relative performance were industrials due to stock selection, information technology (IT) due to an underweight allocation and consumer staples due to stock selection. The top three detractors were consumer discretionary due to an underweight allocation, health care and financials due to stock selection.
  • The largest contributors to absolute performance included AIA Group, a pan-Asian life insurer, Tencent Holdings, a Chinese online gaming and social media conglomerate, and JD.com, a leading e-commerce platform in China. The top three detractors included Samsung Electronics, a South Korean semiconductor and consumer electronics maker, Qingdao Haier Biomedical, a Chinese manufacturer of low-temperature storage equipment for biomedical samples, and Advantech, a Taiwanese industrial computer manufacturer.

Outlook

  • U.S. economic data appears to be robust and suggests that, for now, a recession is unlikely to be imminent. It’s also evident that inflationary pressures have eased and this should allow the Fed to continue to reduce rates. A soft landing or no landing accompanied by declining rates may create a solid backdrop for emerging market equities, including parts of Asia, to perform.
  • China seems to be at least acknowledging and potentially addressing some of its challenges including within the property market. Although in the early stages, this could be a supporting factor for equities. We believe other major markets, such as India, remain well supported economically, given demographics, potential productivity growth and scope for continued CapEx.
  • Large benchmark constituents such as India and Taiwan are trading at higher multiples than their long-term averages. Going forward, this leaves earnings delivery as key for returns in these markets.


Top 10 holdings as of September 30, 2024. Current and future holdings are subject to change and risk.

 

Average Annual Total Returns - MACSX as of 09/30/2024
1YR 3YR 5YR 10YR Since Inception Inception Date
23.45% 0.06% 4.21% 3.06% 7.96% 09/12/1994

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
Gross Expense Ratio 1.15%
Yields as of 09/30/2024
30-Day SEC Yield 1.49%
30-Day SEC Yield (excluding expense waiver) 1.49%
Dividend Yield 3.06%

The 30-Day SEC Yield represents net investment income earned by the Fund over the 30-day period ended 09/30/2024, 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.

 

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.