Matthews China Fund

Matthews Asia Funds

Risk Considerations

  • Investment involves risk. Past performance is not a guide to future performance. It is possible to lose the principal capital of your investment.
  • The Fund invests primarily in China-related companies. Investments in such companies may be subject to increased risks such as political, tax, economic, policy, market, liquidity, trading, custody and settlement, currency, legal and regulatory risks.
  • The Fund invests primarily in equity securities, which may result in increased volatility.
  • The Fund may invest in smaller companies which are likely to carry higher risks than larger companies.
  • The Fund may invest in financial derivative instruments (“FDIs”). Risk associated with FDIs include counterparty/credit risk, liquidity risk, valuation risk, volatility risk and over-the-counter transaction risk. The Fund will not use FDIs extensively for investment purposes.
  • The Fund may use hedging techniques to attempt to offset certain market risks but there is no guarantee that hedging techniques will fully and effectively achieve their desired result.
  • Investors should not invest in the Fund solely based on the information in this website. Please read the Hong Kong Offering Document carefully for further details including risk factors before investing.

Top 10 Holdings as of 31 August 2019

Security Sector % Net Assets
Alibaba Group Holding, Ltd. Consumer Discretionary 9.8
Tencent Holdings, Ltd. Communication Services 9.0
Ping An Insurance Group Co. of China, Ltd. Financials 6.5
JD.com, Inc. Consumer Discretionary 4.1
Sino Biopharmaceutical, Ltd. Health Care 3.8
China Construction Bank Corp. Financials 3.5
Industrial & Commercial Bank of China, Ltd. Financials 3.5
New China Life Insurance Co., Ltd. Financials 3.1
Ping An Bank Co., Ltd. Financials 3.0
China Resources Land, Ltd. Real Estate 2.9
Total 49.2
Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.
Source: Brown Brothers Harriman (Luxembourg) S.C.A

Portfolio Breakdown (%) as of 31 August 2019

  Fund MSCI China IndexDifference
Financials 29.3 21.7 7.6
Consumer Discretionary 24.8 25.1 -0.3
Communication Services 14.6 22.8 -8.2
Health Care 8.0 3.7 4.3
Real Estate 7.4 5.2 2.2
Information Technology 5.5 3.4 2.1
Consumer Staples 3.9 3.7 0.2
Materials 2.8 2.1 0.7
Industrials 0.0 5.3 -5.3
Energy 0.0 3.9 -3.9
Utilities 0.0 3.1 -3.1
Cash and Other Assets, Less Liabilities 3.7 0.0 3.7
  Fund MSCI China Index Difference
Mega Cap (over $25B) 59.7 66.5 -6.8
Large Cap ($10B-$25B) 13.1 16.8 -3.7
Mid Cap ($3B-$10B) 16.6 14.3 2.3
Small Cap (under $3B) 6.9 2.3 4.6
Cash and Other Assets, Less Liabilities 3.7 0.0 3.7
Equity market cap of issuer.
Exposure Portfolio Weight
SAR (Hong Kong) 30.1
A Shares 24.0
Overseas Listed companies (OL) 20.2
H Shares 18.3
China-affiliated corporations (CAC) 3.7
Cash and Other Assets, Less Liabilities 3.7
Definitions: SAR (Hong Kong) companies are companies that conduct business in Hong Kong and/or mainland China. China-affiliated corporations [CAC], also known as "Red Chips," are mainland China companies with partial state ownership listed in Hong Kong, and incorporated in Hong Kong.  China A Shares are Mainland Chinese companies incorporated in China and listed on the Shanghai or Shenzhen exchanges, available mostly to local Chinese investors and qualified institutional investors. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. Overseas Listed [OL] companies are companies that conduct business in mainland China but listed in overseas markets such as Japan, Singapore, Taiwan and the United States.
Source: FactSet Research Systems.

Portfolio Characteristics as of 31 August 2019

Number of Securities1

41

Weighted Average
Market Cap

$138.6 billion

P/E using FY1 estimates

12.0x

P/E using FY2 estimates

10.7x

1Source: Brown Brothers Harriman (Luxembourg) S.C.A
Source: FactSet Research Systems unless otherwise noted. Sector data (excluding Government Bonds) based on MSCI’s revised Global Industry Classification Standards. For more details, visit www.msci.com.

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. 

The P/E Ratio is the share price of a stock as of the report date, divided by the forecasted earnings per share for a 12-month period (FY1) and 24 month period (FY2). For the Fund, this is the weighted harmonic average estimated P/E ratio of all the underlying stocks in the Fund, excluding negative earners. There is no guarantee that the composition of the Fund will remain unchanged, or that forecasted earnings of a stock will be realized. Information provided is for illustrative purposes only.

Index Definitions

The information contained in this document does not, in any way, constitute investment advice. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The information does not constitute a recommendation to buy or sell any securities mentioned. Information on this document is from sources considered reliable, but no representation or warranty (express or implied) is made, including, without limitation, that the information is complete or timely. Matthews Asia and its affiliates do not accept any liability for losses either direct or consequential caused by the use of this information. 

Additional performance, attribution, liquidity, value at risk (VaR), security classification and holdings information is available on request for certain time periods.