Unassociated Document
Matthews
Asian Growth and Income Fund
SUMMARY
PROSPECTUS
|
April 30,
2010
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TICKER:
MACSX
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. The Fund
also seeks to provide some current income.
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
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(fees paid directly from your
investment)
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|
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Redemption
Fee
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(as a percentage
of amount redeemed on shares held fewer than 90
days)
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2.00%
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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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0.48%
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Administration
and Shareholder Servicing Fees
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0.19%
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Total
Annual Operating Expenses
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1.17%
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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: $119
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Three
years: $372
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Five
years: $644
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Ten
years: $1,420
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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 18% of the average value of its
portfolio.
Principal Investment
Strategy
Under normal market conditions, the Fund
seeks to achieve its investment objective by investing at least 80% of its total
net assets, which include borrowings for investment purposes, in dividend-paying
common stock, preferred stock and other equity securities and convertible
securities, of any duration or quality, of companies located in Asia, which
includes China, Hong Kong, India, Indonesia, Japan, Malaysia, Pakistan,
Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand and Vietnam.
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 attempts to offer investors a
relatively stable means of participating in a portion of the Asian region’s
growth prospects, while providing some downside protection, in comparison to a
portfolio that invests purely in common stocks. The strategy of owning
convertible bonds and dividend-paying equities is designed to help the Fund to
meet its investment objective while helping to reduce the volatility of its
portfolio.
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 Asian 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 Asian
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 Asian countries differ
from the economies of more developed countries in many respects, such as rate of
growth, inflation, capital reinvestment, resource self-sufficiency, financial
system stability, the national balance of payments position and sensitivity to
changes in global trade. Certain Asian countries are highly dependent upon and
may be affected by developments in the United States, Europe and other Asian
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, Asian 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
Asian 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: Asian
securities may trade in the form of depositary receipts, including Ameri-can,
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 Asian 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 Asian 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.
Dividend-Paying
Equities: The Fund may
invest in dividend-paying equity securities. There can be no guarantee that
companies that have historically paid dividends will continue to pay them or pay
them at the current rates in the future. Dividend-paying equity securities, in
particular those whose market price is closely related to their yield, may
exhibit greater sensitivity to interest rate changes. The Fund’s investment in
such securities may also limit its potential for appreciation during a broad
market advance.
The prices of dividend-paying equity
securities (and particularly of those issued by Asian companies) can be highly
volatile. Investors should not assume that a Fund’s investments in these
securities will necessarily reduce the volatility of the Fund’s NAV or provide
“protection,” compared to other types of equity securities, when markets perform
poorly.
Past Performance
The bar chart below shows the Fund’s
performance for the past 10 years 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
![](g2.jpg) |
Best Quarter
Q2 2009
21.57%
Worst Quarter
Q4 2008
-14.41%
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AVERAGE ANNUAL TOTAL RETURNS FOR
PERIODS ENDED DECEMBER 31, 2009
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Since
Inception
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(9/12/94
Fund)
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1 year
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5 years
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10 years
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(8/31/94
Indices)
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Matthews
Asian Growth and Income Fund
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|
|
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Return before
taxes
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41.44%
|
10.77%
|
13.76%
|
11.18%
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Return after
taxes on distributions1
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40.35%
|
8.89%
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11.53%
|
8.83%
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Return after taxes on
distributions and sale of Fund shares1
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27.23%
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8.94%
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11.16%
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8.59%
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MSCI
All Country Asia ex Japan Index
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72.53%
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13.79%
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6.55%
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3.62%
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MSCI
All Country Far East ex Japan Index
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69.39%
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13.13%
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5.92%
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3.25%
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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.
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Investment Advisor
Matthews International Capital
Management, LLC (“Matthews”)
Portfolio Managers
Lead
Manager: Andrew Foster has
been a Portfolio Manager of the Asian Growth and Income Fund since
2005.
Co-Manager:
Robert Horrocks, PhD, is
Chief Investment Officer and has been a Portfolio Manager of the Asian Growth
and Income Fund since 2009.
Matthews
Asian
Growth and Income 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
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$2,500
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$100
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Retirement and
Coverdell
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$500
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$50
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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