How Did the Matthews China Fund Perform in August?



Investment objective and strategy

The Matthews China Fund Investor Class (MCHFX) aims to achieve long-term capital appreciation. It seeks to achieve its objective by investing at least 80% of its total assets, which include borrowings for investment purposes, in the common and preferred stocks of companies located in China.

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Performance evaluation

The MCHFX fell 12.5% in August 2015 from a month ago. In the three-month period ended August 31, the fund has fallen 25.2%. Meanwhile, in the one-year period, the fund is down by 10.4%. The Chinese stock market crash took a toll on most of the stocks, which in turn pushed the monthly and quarterly performance of the MCHFX into negative territory.

Sector allocation and holdings

In MCHFX, the financials sector dominates with a weight of 23.3%, closely followed by the information technology sector with 22.2% weight. Then comes the industrials and consumer discretionary sectors with 13.9% and 11.2% exposure, respectively.

Financials, industrials, and consumer discretionary sectors have taken a hit due to fear of global slowdown, weak demand for luxury goods, and sluggish demand from domestic and export clients.

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The MCHFX holds a total of 51 positions. Its top ten holdings account for 35.9% of the net assets. Tencent Holdings (TCEHY) is the top holding with a 5.2% weight. The fund also invests in the American depository receipts (or ADRs) of China Mobile (CHL), Alibaba (BABA), Baidu (BIDU), and NetEase (NTES).

Fund facts

The MCHFX has total net assets of $744.26 million as of August 31, 2015, and has an expense ratio of 1.13%. Andrew Mattock manages the fund. The fund’s inception date was February 19, 1998.


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