Matthews China Active ETF

Matthews China Active ETF (MCH) offers actively managed exposure to about 55 Chinese stocks, led by Tencent and Alibaba, for investors who want a manager's picks rather than an index. It costs 0.79% a year, more than any of six similar China ETFs, and had just $23.3 million in net assets as of June 30, 2026. Its 18.8% one-year loss through October 27, 2026, was the smallest in that group.

• Over the year to Oct 27, 2026, MCH returned -18.8%, 1st of 7 among similar funds.
• Its worst full calendar year was 2023 (-19.9%); its best was 2025 (+30.2%).
• The deepest fall in its price history was 40.5% (Jan 26, 2023 to Feb 2, 2024), recovered by Oct 7, 2024.

As of Jun 30, 2026, the fund held 55 securities; the ten largest made up 42.66% of assets.

• Over the three months to Jun 30, 2026, investors added a net $0.00 (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +7.72%, +3.66%, +0.66%.

MCH does not follow an index. Matthews International Capital Management normally keeps at least 80% of net assets in common and preferred stocks of companies located in China, including Hong Kong and Macau. A company qualifies if it has substantial ties to China, such as being organized there or earning at least half its revenue there. Matthews has latitude in that judgment. Its benchmark, or yardstick, is the MSCI China Index.

The managers look for companies capable of sustainable growth. They weigh balance sheets, cash flow, management, governance and financial health. They expect to own mostly medium and large companies and may concentrate in a few sectors. With no index to copy, they set each position's size. As of June 30, 2026, the fund owned 55 stocks. Tencent was 12.0% of assets, Alibaba 5.4%, and the top 10 totaled 42.7%. Its 39% turnover means about two-fifths of holdings change yearly.

About 37.7% of assets sat in Cayman Islands-registered companies such as Tencent, Alibaba and Meituan. China bars foreign ownership in sectors such as technology and media, so the fund may reach those businesses through variable interest entities (VIEs). These are contracts that give economic exposure without direct ownership. The fund may hedge currency risk but held no derivatives as of that date, so currency swings against the dollar pass straight through.

• MCH charges 0.79% a year, versus an average of 0.6% for the similar funds below (7th of 7, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $81 in the first year and $978 over 10 years (assuming a 5% annual return).

It concentrates in one country, has fallen as much as 40.5% from a peak and costs more than similar funds, so it fits a small, higher-risk slice rather than a portfolio's core.

MCH adds a manager-picked basket of Chinese stocks, but its record is short: its price history doesn't cover the 2008 crisis, the 2020 COVID crash or the 2022 bear market. Its worst calendar year was 2023, a 19.35% loss. Its deepest drop, 40.5%, ran from January 26, 2023, to February 2, 2024, and took about eight more months to recover. Anyone cashing in shares near that low would have locked in a steep loss.

Income is modest and lumpy: the fund pays once a year, and the past 12 months' payout equaled a 2.05% yield as of October 27, 2026. It charges 0.79% a year, above the 0.60% average for similar funds. In the SEC's standard $10,000 example, that comes to $81 in the first year and $978 over 10 years. Past results don't predict future returns, and a plan should weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.