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Matthews launches China Dividend Fund

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Matthews International Capital Management, adviser to the Matthews Asia Funds, has expanded its fund line-up to include a new portfolio dedicated exclusively to investing in Chinese dividend-paying companies.

The Matthews China Dividend Fund will seek to invest in the equity and convertible securities of companies that are well-positioned to grow future dividends while providing an attractive dividend yield.

Managed by Jesper Madsen and co-managed by Richard Gao, the fund offers investors an opportunity to participate in China’s growth through a total return dividend-focused strategy.

“Asia and China, in particular, are becoming increasingly important components to strategic investment decisions for many investors,” says Robert Horrocks (pictured), Matthews’ chief investment officer. “For most investors, there is only one way to access these markets: through a growth strategy. And yet, by comparison, we find a wide breadth of US investment strategies. We believe that, similarly, there is more than one way to invest in Chinese equity markets. Strategy matters.”

Over the past decade, the universe of dividend-paying companies in Asia Pacific—and in particular China—has expanded significantly, allowing Matthews to offer a second dividend-focused investment strategy in the region. Dividends in Asia Pacific have risen five-fold during the last decade, while dividends from Chinese companies (listed in Hong Kong, B-share and offshore markets) grew from USD8bn in 1998 to more than USD70bn by 2008.

“The bulk of the growth in China’s dividends stems mostly from large, state-owned enterprises that have been listed during the past decade,” adds Madsen. “These companies, unlike most US IPOs, are ‘mature’ companies that pay dividends from day one. As a result, China has become one of the largest and fastest-growing markets in Asia in terms of dividend payments, making a diversified and scalable dividend investment strategy in China possible. We’ve been investing in dividend growing companies across Asia Pacific for the past three years in the Matthews Asia Dividend Fund and the Matthews China Dividend Fund is an extension of the same stock selection process employed exclusively to China.”

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