The firm has been operating a China Dividend strategy since 2009 and the new Luxembourg-domiciled fund will follow the same investment approach. It will invest in companies that are well positioned to grow future dividends, and provide an attractive dividend yield.
The company reports that the existing China Dividend strategy has delivered a three-year annualised return of 10.24% versus a benchmark return of 1.80%.
The fund is managed by Yu Zhang and Jesper Madsen who head up the 2006 vintage Matthews Asia Dividend Fund, which was also launched as a Luxemburg-domiciled fund in 2010.
Zhang said: “China’s capital markets initially attracted investors for the growth potential but the country’s equity markets have evolved significantly over the past 10 years such that they have become among the largest and fastest-growing markets in Asia in terms of dividend payments. We now have the ability to invest in a growing universe of dividend-paying companies offering both attractive current yields as well as the potential for future dividend growth.”
Over 840 Chinese companies paid dividends in 2011, and total dividend payment has increased from around $8bn in 1998 to over $72bn in 2011.
Jonathan Schuman, head of global business development, said: “We believe dividends represent an important part of an investor’s total return and in today’s low yielding environment, there continues to be strong demand for funds that can deliver a higher level of income.
“The expanding universe of Chinese dividend-paying companies presents new investment opportunities for those seeking to benefit not only from the potential of capital appreciation but also current and future income.”
