Investment Objective

The investment objective of the Fund is to achieve long-term capital appreciation through investment in companies and other entities with significant assets, investments, production activities, trading or other business interests in China, or which derive a significant part of their revenue from China.


The Board of Directors of the Fund has adopted an operating policy of the Fund, effective June 30th, 2001, that the Fund will invest at least 80% of its assets in China companies. For this purpose, 'China companies' are:

  1. Companies for which the principal securities trading market is in China;
  2. Companies for which the principal securities trading market is outside of China or in companies organized outside of China, that in both cases derive at least 50% of their revenues from goods or services sold or produced, or have at least 50% or their assets in China;
  3. Companies organized in China.

Under the new policy, China means the People's Republic of China, including Hong Kong, and Taiwan. The Fund will provide its stockholders with at least 60 days' prior notice of any change to the policy described above. The fundamental policy, which applies to not less than 65% of the Fund's assets as set out in the Fund's prospectus dated July 10, 1992, remains in place. The fundamental policy is the same as the operating policy set out above, except that China only includes the People's Republic of China (including Hong Kong).

Investment Manager

Matthews International Capital Management, LLC

At Matthews Asia, we believe in the long-term growth of Asia, concentrating our efforts and expertise exclusively within the region since our founding in 1991. As an independent, privately owned firm, Matthews Asia is the largest dedicated Asia investment specialist in the United States. Throughout our 27+ year history, we have applied our high conviction, bottom-up, fundamental investment philosophy—with a focus on long-term investment performance—investing through a variety of market environments.

Portfolio Manager 

Andrew Mattock Headshot

Andrew Mattock, CFA

Lead Manager

Andrew Mattock serves as the portfolio manager for the Fund's portfolio of listed securities.  Prior to joining Matthews Asia in 2015, he was a Fund Manager at Henderson Global Investors for 15 years, first in London and then in Singapore, managing Asia Pacific equities. Andrew holds a Bachelor of Business majoring in Accounting from ACU. He began his career at PricewaterhouseCoopers and qualified as a Chartered Accountant. 

Winnie Chwang Headshot

Winnie Chwang


Winnie Chwang serves as the co-manager for the Fund's portfolio of listed securities. She joined the firm in 2004 and has built her investment career at the firm. Winnie earned an MBA from the Haas School of Business and received her B.A. in Economics with a minor in Business Administration from the University of California, Berkeley. She is fluent in Mandarin and conversational in Cantonese.

Sherwood Zhang Headshot

Sherwood Zhang, CFA


Sherwood Zhang serves as the co-manager for the Fund's portfolio of listed securities. Prior to joining Matthews in 2011, Sherwood was an analyst at Passport Capital from 2007 to 2010, where he focused on such industries as property and basic materials in China as well as consumer-related sectors. Before earning his MBA in 2007, Sherwood served as a Senior Treasury Officer for Hang Seng Bank in Shanghai and Hong Kong, and worked as a Foreign Exchange Trader at Shanghai Pudong Development Bank in Shanghai. He received his MBA from the University of Maryland and his Bachelor of Economics in Finance from Shanghai University. Sherwood is fluent in Mandarin and speaks conversational Cantonese.

Hardy Zhu Headshot

Hardy Zhu


Hardy Zhu serves as the co-manager for the Fund's portfolio of listed securities. Prior to joining the firm in 2011, Hardy was an Equity Analyst with Delaware Investments researching Chinese equities. Before earning his MBA from Duke University in 2007, Hardy was a senior accountant at PNC Global Investment Servicing from 2000 to 2005. Hardy began his career at China National Nonferrous Metals Import & Export Co., one of the largest state-owned international trading companies in China. He received a Master of Accounting degree from the Virginia Polytechnic Institute and State University and a B.S. in Industrial Foreign Trade from Shenyang Polytechnic University in China. Hardy is fluent in Mandarin.

Portfolio Construction

In constructing the portfolio, the manager looks to diversify the portfolio between core and cyclical growth holdings. The core holdings are businesses that are viewed as long-term positions and generally make up approximately 80% of the portfolio. They have long-term cash flow predictability and tend to be domestically oriented businesses in sectors such as internet/e-Commerce, health care, life insurance, media and travel. However, as not all compelling opportunities have long-term cash flow predictability, approximately 20% of the portfolio's assets are generally in shares of companies that have less-predictable cash flows. These cyclical growth holdings often represent investments in more cyclical industries such as transportation, property, wealth management, energy and commodities.


Investment Process

The Fund's core philosophy is to capture growth-at-a-reasonable price. It is driven by a fundamental, bottom-up stock selection process with a focus on governance, management quality, capital efficiency and the long-term sustainability and repeatability of cash flows. 

Our portfolio manager seeks to identify companies with comparative advantages and superior operational metrics priced below long-term intrinsic value. He seeks businesses that are best positioned to grow over time by capitalizing on China's economic transformation and expanding middle class consumption. 

The Fund focuses on a multi-cap universe, which includes approximately 5,000 publicly held companies in Hong Kong and Mainland China, including domestic A-Shares. This universe is screened for companies with a market cap of greater than US$1 billion and with a Return on Assets above 5%. 

The research process is designed to provide a 360-degree view of each company under consideration. This deep due diligence work allows us to hold a broad and thorough understanding of China's individual companies, its economy and its markets. 

On-the-ground visits are key to our process, including over 700 meetings per year with Chinese companies by the broader Matthews Asia investment team, ranging from China's financial centers to remote island outposts. With a keen eye on risk management, the team probes company management's thinking on business models, capital allocation, future growth initiatives, governance and other sensitive factors. The team builds a viewpoint on management's integrity and ability to effectively lead the business through cycles. Additionally, they look at fundamental factors, with a focus on the drivers of long-term trends.

Analysis is then conducted on competitive positioning, including each potential holding's competitive advantage, market position and the ability to extract a higher margin than peers or maintain pricing power. Finally, the team examines balance sheet strength with a focus on how a company funds its business, eliminating those that may not be sufficiently reinvesting in their core business activities.

Once all of the open questions are answered, the team builds forward-looking models to assess the valuation of a stock to determine whether a pricing discrepancy exists between internal and market pricing. These valuations are compared to multiple measures including, P/E, P/B, FCF, EVA and private market comparables. If a business is attractive but the stock price is excessive, it will remain on the watch list until a reasonable valuation entry point presents itself.

Board of Directors

Julian Reid

Chairman of the Board
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Richard A. Silver

Chairman of the Audit, Valuation and Compliance Committee
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George J. Iwanicki

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Patrick J. Keniston

Chief Compliance Officer & Secretary
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Doug Byrkit

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Monique Labbe

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Yan HU (Chinese: 胡砚)

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Facts & Figures

Key Facts
Shares outstanding
as of July 12, 2024
Number of Share Buybacks
as of 07/01 to 07/05/2024
Exchange listed NYSE
Listing date July 10, 1992
Ticker symbol CHN
Investment adviser Matthews International Capital Management, LLC.
Direct investment manager Matthews International Capital Management, LLC.
Figures as of June 30, 2024
Market capitalization 100.2m
Net asset value per share US$11.76
Market price US$10.12
Premium/(discount) (13.95%)
Fund size 116.4m

Source: Brown Brothers Harriman & Co.

Performance data represents past performance and is not a guarantee to future returns. You may have a gain or a loss when you sell your shares. Investors should consider a fund's investment objectives, risks, charges and expenses carefully before investing. The information contained in this website does not constitute an offer of, or an invitation to apply for, securities.

Portfolio Characteristics as of June 30, 2024

China Exposure % of Net Assets
Hong Kong Listed Companies 56.0
Mainland China Listed Companies 34.4
Other 0.8
Cash and Other Assets, Less Liabilities 0.3

Source: FactSet Research Systems


Definitions: Mainland China listed companies includes A Share and B Shares. 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. B Shares are mainland Chinese companies listed on the Shanghai and Shenzhen stock exchanges, available to both Chinese and non-Chinese investors. ADRs are American Depositary Receipts and GDRs are Global Depositary Receipts. Hong Kong Listed Companies include SAR (Hong Kong) companies, China-affiliated corporations, and H Shares. SAR 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. H Shares are mainland Chinese companies listed on the Hong Kong exchange but incorporated in mainland China. Other represents Chinese companies listed in other countries or non-China companies with a majority of revenue coming from China such as Japan, Singapore, Taiwan and the United States or other non-China companies.

Sector Allocation % of Net Assets MSCI China All Shares %
Financials 23.0 18.5
Consumer Discretionary 21.5 20.2
Communication Services 15.2 14.5
Industrials 10.2 9.0
Consumer Staples 8.4 7.5
Information Technology 6.4 9.3
Real Estate 4.2 1.6
Energy 3.7 4.2
Materials 3.6 6.5
Health Care 3.4 4.9
Utilities 0.0 3.9
Cash and Other Assets, Less Liabilities 0.3 0.0

Source: FactSet Research Systems

Top 10 Holdings as of June 30, 2024

Securities Sector %
Tencent Holdings, Ltd. Communication Services 11.2
China Merchants Bank Co., Ltd. Financials 5.7
China Construction Bank Corp. Financials 4.8
Ping An Insurance Group Co. of China, Ltd. Financials 4.1
Meituan Class B Consumer Discretionary 4.0
Alibaba Group Holding, Ltd. Consumer Discretionary 4.0
PetroChina Co., Ltd. Energy 3.7
Wuliangye Yibin Co., Ltd. Consumer Staples 3.2
JD.com, Inc. Consumer Discretionary 2.8
PDD Holdings, Inc. Consumer Discretionary 2.5
Total 46.0

View Full Holdings

Top 10 holdings may combine more than one security from the same issuer and related depositary receipts.

Source: Brown Brothers Harriman & Co.

External Service Providers

Function Provider
Listed Investment Manager Matthews International Capital Management, LLC.
Direct Investment Manager Matthews International Capital Management, LLC.
Shareholder servicing agent The Altman Group, Inc.
Tel: (1) 888-CHN-CALL (246-2255)
Administrator, Accounting Agent and Custodian Brown Brothers Harriman & Co
Transfer agent, Dividend Paying Agent and Registrar Computershare www.computershare.com
Independent auditors Tait, Weller & Baker LLP
1818 Market Street, Suite 2400
Philadelphia, PA 19103, United States of America
Legal Counsel Morgan, Lewis & Bockius LLP