Unassociated Document
Matthews
Asia Pacific Fund
SUMMARY
PROSPECTUS
|
April 30,
2010
|
TICKER:
MPACX
Before you invest, you may want to
review the Fund’s Prospectus, which contains more information about the Fund and
its risks. You can find the Fund’s Prospectus and other information about the
Fund online at www.matthewsasia.com/prospectus. You may also obtain this
information at no additional cost by calling 800.789.ASIA (2742) or by sending
an e-mail request to prospectus@matthewsasia.com. The Fund’s Prospectus and
Statement of Additional Information, both dated April 30, 2010, are incorporated
by reference into this Summary Prospectus.
Investment Objective
Long-term capital
appreciation
Fees and Expenses of the
Fund
This table describes the fees and
expenses that you may pay if you buy and hold shares of this
Fund.
SHAREHOLDER
FEES
|
|
|
(fees paid directly from your
investment)
|
|
|
Redemption
Fee
|
|
|
(as a percentage
of amount redeemed on shares held fewer than 90
days)
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2.00%
|
|
|
|
ANNUAL OPERATING
EXPENSES
|
|
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(expenses that you pay each year
as a percentage of the value of your investment)
|
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Management
Fees
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0.69%
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Distribution
(12b-1) Fees
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None
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Other
Expenses
|
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0.58%
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Administration
and Shareholder Servicing Fees
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0.19%
|
|
Total
Annual Operating Expenses
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|
1.27%
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EXAMPLE OF FUND
EXPENSES
This example is intended to help you
compare the cost of investing in the Fund with the cost of investing in other
mutual funds. The example assumes that you invest $10,000 in the Fund for the
time periods indicated and then redeem all of your shares at the end of those
periods. The example also assumes that your investment has a 5% return each year
and that the Fund’s operating expenses remain the same. Although your actual
costs may be higher or lower, based on these assumptions your costs would
be:
One
year: $129
|
Three
years: $403
|
Five
years: $697
|
Ten
years: $1,534
|
PORTFOLIO TURNOVER
The Fund pays transaction costs, such as
commissions, when it buys and sells securities (or “turns over” its portfolio).
A higher portfolio turnover may indicate higher transaction costs and may result
in higher taxes when Fund shares are held in a taxable account. These costs,
which are not reflected in annual fund operating expenses or in the example of
fund expenses, affect the Fund’s performance. During the most recent fiscal
year, the Fund’s portfolio turnover rate was 58% of the average value of its
portfolio.
Principal Investment
Strategy
Under normal market conditions, the
Matthews Asia Pacific Fund seeks to achieve its investment objective by
investing at least 80% of its total net assets, which include borrowings for
investment purposes, in the common and preferred stocks of companies located in
the Asia Pacific region, which includes China, Hong Kong, India, Indonesia,
Japan, Malaysia, Pakistan, Philippines, Singapore, South Korea, Sri Lanka,
Taiwan, Thailand, Vietnam, Australia and New Zealand. The location of a company
can be determined by where it is organized, where its revenues and profits are
derived, where its assets are located, or other factors. The Fund may also
invest in the convertible securities, of any duration or quality, of Asia
Pacific companies.
Principal Risks of
Investment
Political, Social and
Economic Risks: The value
of the Fund’s assets may be adversely affected by political, economic, social
and religious instability; inadequate investor protection; changes in laws or
regulations of countries within the Asia Pacific region (including countries in
which the Fund invests, as well as the broader region); international relations
with other nations; natural disasters; corruption and military activity. The
Asia Pacific region, and particularly China, Japan and South Korea, may be
adversely affected by political, military, economic and other factors related to
North Korea. In addition, China’s long-running conflict over Taiwan, border
disputes with many of its neighbors and historically strained relations with
Japan could adversely impact economies in the region. The economies of many Asia
Pacific countries differ from the economies of more developed countries in many
respects, such as rate of growth, infla-tion, capital reinvestment, resource
self-sufficiency, financial system stability, the national balance of payments
position and sensitivity to changes in global trade. Certain Asia Pacific
countries are highly dependent upon and may be affected by developments in the
United States, Europe and other Asia Pacific economies.
Currency Risks:
When the Fund conducts
securities transactions in a foreign currency, there is the risk of the value of
the foreign currency increasing or decreasing against the value of the U.S.
dollar. The value of an investment denominated in a foreign currency will
decline in dollar terms if that currency weakens against the dollar. While the
Fund is permitted to hedge currency risks, Matthews does not anticipate doing so
at this time. Additionally, Asia Pacific countries may utilize formal or
informal currency-exchange controls or “capital controls.” Capital controls may
impose restrictions on the Fund’s ability to repatriate investments or income.
Such controls may also affect the value of the Fund’s
holdings.
Risks Associated with
Emerging Markets: Many Asia
Pacific countries are considered emerging markets. Emerging markets are often
less stable politically and economically than developed markets such as the
United States, and investing in emerging markets involves different and greater
risks. There may be less publicly available information about companies in
emerging markets. The stock exchanges and brokerage industries of emerging
markets do not have the level of government oversight as do those in the United
States. Securities markets of such countries are substantially smaller, less
liquid and more volatile than securities markets in the United
States.
Trading Markets and
Depositary Receipts: Asia
Pacific securities may trade in the form of depositary receipts, including
American, European and Global Depositary Receipts. Although depositary receipts
have risks similar to the securities that they represent, they may also involve
higher expenses and may trade at a discount (or premium) to the underlying
security. In addition, depositary receipts may not pass through voting and other
shareholder rights, and may be less liquid than the underlying securities listed
on an exchange.
Volatility:
The smaller size and lower
levels of liquidity in emerging markets, as well as other factors, may result in
changes in the prices of Asia Pacific securities that are more volatile than
those of companies in more developed regions. This volatility can cause the
price of the Fund’s shares (NAV) to go up or down dramatically. Because of this
volatility, it is recommended that you invest in the Fund only for the long term
(at least five years).
Convertible
Securities: The Fund may
invest in convertible preferred stocks, and convertible bonds and debentures.
The risks of convertible bonds and debentures include repayment risk and
interest rate risk. Many Asia Pacific convertible securities are not rated by
rating agencies like Moody’s, S&P or Fitch, or, if they are rated, they may
be rated below investment grade (“junk bonds”), which may have a greater risk of
default. Investing in a convertible security denominated in a currency different
from that of the security into which it is convertible may expose the Fund to
currency risk as well as risks associated with the level and volatility of the
foreign exchange rate between the security’s currency and the underlying stock’s
currency. Convertible securities may trade less frequently and in lower volumes,
or have periods of less frequent trading. Lower trading volume may also make it
more difficult for the Funds to value such securities.
Past Performance
The bar chart below shows the Fund’s
performance for each full calendar year since its inception and how it has
varied from year to year, reflective of the Fund’s volatility. Also shown are
the best and worst quarters for this time period. The table below shows the
Fund’s performance over certain periods of time, along with performance of its
benchmark index. The index performance does not take into consideration fees,
expenses or taxes. The information presented below is past performance and is
not a prediction of future results. Both the bar chart and performance table
assume reinvestment of all dividends and distributions. For the Fund’s most
recent month-end performance, please visit matthewsasia.com or call
800.789.2742.
ANNUAL RETURNS FOR YEARS ENDED
12/31
|
Best Quarter
Q2 2009
33.81%
Worst Quarter
Q3 2008
-15.04%
|
AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDED DECEMBER 31, 2009
|
|
|
|
Since
Inception
|
|
1 year
|
5 years
|
(10/31/03)
|
Matthews
Asia Pacific Fund
|
|
|
|
Return before
taxes
|
44.82%
|
7.18%
|
9.86%
|
Return after taxes on
distributions1
|
44.58%
|
6.59%
|
9.36%
|
Return after taxes on
distributions and sale of Fund shares1
|
29.72%
|
6.28%
|
8.70%
|
MSCI
All Country Asia Pacific Index
|
37.86%
|
5.94%
|
8.51%
|
1
|
After-tax returns
are calculated using the highest historical individual federal marginal
income tax rates and do not reflect the impact of state and local taxes.
Actual after-tax returns depend on an investor’s tax situation and may
differ from those shown. After-tax returns shown are not relevant to
investors who hold their Fund shares through tax-deferred arrangements,
such as 401(k) plans or individual retirement
accounts.
|
Investment Advisor
Matthews International Capital
Management, LLC (“Matthews”)
Portfolio Managers
Lead
Manager: Taizo Ishida has
been a Portfolio Manager of the Asia Pacific Fund since 2007.
Co-Manager:
Sharat Shroff, CFA, has
been a Portfolio Manager of the Asia Pacific Fund since
2007.
Matthews
Asia Pacific Fund
Summary
Prospectus continued
Purchase and Sale of Fund
Shares
You may purchase and sell shares
directly through the Fund’s transfer agent, by calling 800.789.ASIA (2742) or
online at matthewsasia.com. Shares of the Funds may also be purchased and sold
through various securities brokers and benefit plan administrators or their
sub-agents (“Third-Party Intermediaries”). You may purchase and redeem shares by
electronic bank transfer, check, or wire. You buy and redeem shares at the
Fund’s next-determined net asset value (NAV) after the Fund receives your
request in good order. NAVs are determined only on days when the NYSE is open
for regular trading. The minimum initial and subsequent investment amounts for
various types of accounts offered by the Fund are shown
below.
Type of
Account
|
Minimum Initial
Investment
|
Subsequent
Investments
|
Non-retirement
|
$2,500
|
$100
|
Retirement and
Coverdell
|
$500
|
$50
|
Tax Information
The Fund’s distributions are taxable,
and will be taxed as ordinary income or capital gains, unless you are investing
through a tax-deferred arrangement, such as a 401(k) plan or an individual
retirement account. Ordinary income and capital gains for such accounts are
taxed on a deferred basis.
Payments to Broker-Dealers and Other
Financial Intermediaries
If you purchase shares of the Fund
through a broker-dealer or other financial intermediary (such as a bank),
Matthews may pay the intermediary for the sale of Fund shares and related
services. Shareholders who purchase or hold shares through an intermediary may
inquire about such payments from that intermediary. These payments may create a
conflict of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s web site for more
information.
800.789.ASIA | matthewsasia.com