This article first appeared on GuruFocus .
Exploring the Fund's Recent Investment Adjustments
Matthews China Fund ( Trades , Portfolio ) recently submitted its N-PORT filing for the fourth quarter of 2025, revealing strategic investment decisions made during this period. Established in February 1998, the fund aims to achieve its investment objectives by allocating at least 80% of its net assets in the common and preferred stocks of companies based in China. The fund focuses on companies with sustainable growth potential, evaluating factors such as balance sheet strength, cash flow stability, management quality, and corporate governance. This disciplined approach aligns with the fund's long-term investment philosophy.
Summary of New Buy
Matthews China Fund ( Trades , Portfolio ) added a total of five stocks to its portfolio. The most significant addition was Futu Holdings Ltd ( NASDAQ:FUTU ), with 25,717 shares, accounting for 0.99% of the portfolio and valued at $4.22 million. The second largest addition was NAURA Technology Group Co Ltd ( SZSE:002371 ), consisting of 38,540 shares, representing approximately 0.6% of the portfolio, with a total value of 2,536,010. The third largest addition was XPeng Inc ( HKSE:09868 ), with 168,600 shares, accounting for 0.4% of the portfolio and a total value of HK$1,714,300.
Key Position Increases
Matthews China Fund ( Trades , Portfolio ) also increased stakes in a total of eight stocks. The most notable increase was in China Life Insurance Co Ltd ( HKSE:02628 ), with an additional 2,559,000 shares, bringing the total to 3,963,000 shares. This adjustment represents a significant 182.26% increase in share count, impacting the portfolio by 2.12%, with a total value of HK$14,008,940. The second largest increase was in Wuxi AppTec Co Ltd ( SHSE:603259 ), with an additional 219,800 shares, bringing the total to 538,800. This adjustment represents a 68.9% increase in share count, with a total value of 6,993,650.
Summary of Sold Out
Matthews China Fund ( Trades , Portfolio ) completely exited eight holdings in the fourth quarter of 2025. Notable exits include Lenovo Group Ltd ( HKSE:00992 ), where the fund sold all 2,982,000 shares, resulting in a -0.93% impact on the portfolio. Another significant exit was Hisense Home Appliances Group Co Ltd ( HKSE:00921 ), with the liquidation of all 1,186,000 shares, causing a -0.78% impact on the portfolio.
Key Position Reduces
Matthews China Fund ( Trades , Portfolio ) also reduced its position in 17 stocks. The most significant changes include a reduction in DiDi Global Inc ( DIDIY ) by 1,077,934 shares, resulting in a -49.34% decrease in shares and a -1.42% impact on the portfolio. The stock traded at an average price of $5.74 during the quarter and has returned -18.52% over the past three months and -12.50% year-to-date. Another notable reduction was in Wuliangye Yibin Co Ltd ( SZSE:000858 ) by 338,700 shares, resulting in a -68.37% reduction in shares and a -1.22% impact on the portfolio. The stock traded at an average price of 116.64 during the quarter and has returned -5.22% over the past three months and 2.44% year-to-date.
Portfolio Overview
As of the fourth quarter of 2025, Matthews China Fund ( Trades , Portfolio )'s portfolio included 66 stocks. The top holdings were 10.84% in Tencent Holdings Ltd ( HKSE:00700 ), 8.8% in Alibaba Group Holding Ltd ( HKSE:09988 ), 4.36% in Ping An Insurance (Group) Co. of China Ltd ( HKSE:02318 ), 3.52% in China Construction Bank Corp ( HKSE:00939 ), and 3.29% in China Life Insurance Co Ltd ( HKSE:02628 ). The holdings are mainly concentrated in 10 of the 11 industries: Financial Services, Consumer Cyclical, Communication Services, Technology, Industrials, Basic Materials, Healthcare, Real Estate, Energy, and Consumer Defensive.
