Form 497K
Matthews Asia Focus Fund
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SUMMARY PROSPECTUSINVESTOR CLASS |
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April 29, 2016 |
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TICKER: MAFSX
Before you invest, you may
want to review the Funds Prospectus, which contains more information about the Fund and its risks. You can find the Funds Prospectus and other information about the Fund online at 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 Funds Prospectus and Statement of Additional Information, both dated April 29, 2016, 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)
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Maximum Account Fee on Redemptions (for wire redemptions only) |
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$9 |
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ANNUAL OPERATING EXPENSES
(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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0.66% |
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Distribution (12b-1) Fees1 |
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0.00% |
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Other Expenses |
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1.41% |
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Administration and Shareholder Servicing Fees |
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0.14% |
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Total Annual Fund Operating Expenses |
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2.07% |
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Fee Waiver and Expense
Reimbursement2 |
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(0.57% |
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Total Annual Fund Operating Expenses After Fee Waiver and Expense Reimbursement |
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1.50% |
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1 |
The Trusts 12b-1 Plan (the Plan) is inactive. Although the Plan currently is not active, it is reviewed by the Board annually in case the Board decides to re-activate the Plan. The Plan would not be
re-activated without prior notice to shareholders. If the Plan were reactivated, the fee would be up to 0.25% for each of the Investor Class and Institutional Class, respectively. |
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Matthews has contractually agreed (i) to waive fees and reimburse expenses to the extent needed to limit Total Annual Fund Operating Expenses (excluding Rule 12b-1 fees, taxes, interest, brokerage commissions,
short sale dividend expenses, expenses incurred in connection with any merger or reorganization or extraordinary expenses such as litigation) of the Institutional Class to 1.25%, first by waiving class specific expenses (i.e., shareholder service
fees specific to a particular class) of the Institutional Class and then, to the extent necessary, by waiving non-class specific expenses of the Institutional Class, and (ii) if any Fund-wide expenses (i.e., expenses that apply to both the
Institutional Class and the Investor Class) are waived for the Institutional Class to maintain the 1.25% expense limitation, to waive an equal amount (in annual percentage terms) of those same expenses for the Investor Class. The Total Annual Fund
Operating Expenses After Fee Waiver and Expense Reimbursement for the Investor Class may vary from year to year and will in some years exceed 1.25%. If the operating expenses fall below the expense limitation in a year within three years after
Matthews has made a waiver or reimbursement, the Fund may reimburse Matthews up to an amount that does not cause the expenses for that year to exceed the lesser of (i) the expense limitation applicable at the time of that fee waiver and/or
expense reimbursement or (ii) the expense limitation in effect at the time of recoupment. This agreement will remain in place until April 30, 2017 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60
days written notice to Matthews. |
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 Funds operating expenses remain the
same. The example reflects the expense limitation for the one year period only. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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One year: $153 |
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Three years: $594 |
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Five years: $1,061 |
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Ten years: $2,355 |
PS-MAFSX-0416
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 Funds performance. During the most recent fiscal year, the Funds portfolio turnover rate was 24% of
the average value of its portfolio.
Principal Investment Strategy
Under normal market conditions, the Matthews Asia Focus Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which
include borrowings for investment purposes, in the common and preferred stocks of companies located in Asia ex Japan, which consists of all countries and markets in Asia excluding Japan but including all other developed, emerging, and frontier
countries and markets in the Asian region. A company or other issuer is considered to be located in a country or a region, and a security or instrument will deemed to be an Asian (or specific country) security or instrument, if it has
substantial ties to that country or region. Matthews currently makes that determination based primarily on one or more of the following criteria: (A) with respect to a company or issuer, whether (i) it is organized under the laws of that
country or any country in that region; (ii) it derives at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed, or has at least 50% of its assets located, within that country or region;
(iii) it has the primary trading markets for its securities in that country or region; (iv) it has its principal place of business in or is otherwise headquartered in that country or region; or (v) it is a governmental entity or an
agency, instrumentality or a political subdivision of that country or any country in that region; and (B) with respect to an instrument or issue, whether (i) its issuer is headquartered or organized in that country or region; (ii) it is issued to
finance a project with significant assets or operations in that country or region; (iii) it is secured or backed by assets located in that country or region; (iv) it is a component or its issuer is included in a recognized securities index for the
country or region; or (v) it is denominated in the currency of an Asian country and addresses at least one of the other above criteria. The Fund may also invest in depositary receipts, including American, European and Global Depositary Receipts.
The Fund seeks to invest in companies capable of sustainable growth based on fundamental characteristics. Companies in which the Fund invests typically
possess, in the portfolio managers judgment, such attributes as a high quality management team, strong corporate governance standards, sustainable return on capital over an extended period, strong free cash flow generation and an attractive
valuation in relation to growth prospects and intrinsic value. Although the Fund is unconstrained by sector, geographic area or market capitalization, companies in which the Fund invests are typically expected to be medium capitalization companies
or large capitalization companies. The Fund is currently expected to hold stocks of between 25 and 35 companies under normal market conditions.
Principal Risks of Investment
There is no guarantee that your investment in the Fund will increase in value. The value of your investment in the Fund could go down, meaning you could lose
money. The principal risks of investing in the Fund are:
Political, Social and Economic Risks of Investing in Asia: The value of the Funds 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, Chinas 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 Funds ability to repatriate
investments or income. Such controls may also affect the value of the Funds holdings.
Risks Associated with Emerging and Frontier Markets: Many
Asian countries are considered emerging or frontier markets. Such markets are often less stable politically and economically than developed markets such as the United States, and investing in these markets involves different and greater risks.
There may be less publicly available information about companies in many Asian countries, and the stock exchanges and brokerage industries in many Asian countries typically do not have the level of government oversight as do those in the United
States. Securities markets of many Asian countries are also substantially smaller, less liquid and more volatile than securities markets in the United States.
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
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2 MATTHEWS ASIA FOCUS FUND |
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than those of companies in more developed regions. This volatility can cause the price of the Funds 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).
Focused Investment Risk: The Fund is a focused fund and is currently expected
to hold stocks of between only 25 and 35 companies. Focused funds may invest a larger portion of their assets in the securities of a single issuer compared to a more diversified fund. Focusing investments in a small number of companies may subject
the Fund to greater share price volatility and therefore a greater risk of loss because a single securitys increase or decrease in value may have a greater impact on the Funds value and total return. Economic, political or regulatory
developments may have a greater impact on the value of the Funds portfolio than would be the case if the portfolio were diversified among more issuers, and events affecting a small number of companies may have a significant and potentially
adverse impact on the performance of the Fund.
In addition, investors may buy or sell substantial amounts of Fund shares in response to factors affecting
or expected to affect a small number of companies, resulting in extreme inflows and outflows of cash into or out of the Fund. To the extent such inflows or outflows of cash cause the Funds cash position or cash requirements to exceed normal
levels, management of the Funds portfolio may be negatively affected.
Risks Associated with Medium-Size Companies: Medium-size companies may be
subject to a number of risks not associated with larger, more established companies, potentially making their stock prices more volatile and increasing the risk of loss.
Past Performance
The bar
chart below shows the Funds performance for each full calendar year since its inception and how it has varied from year to year, reflective of the Funds volatility and some indication of risk. Also shown are the best and worst quarters
for this time period. The table below shows the Funds performance over certain periods of time, along with performance of its benchmark index. The information presented below is past performance, before and after taxes, and is not a prediction
of future results. Both the bar chart and performance table assume reinvestment of all dividends and distributions. For the Funds most recent month-end performance, please visit matthewsasia.com or call 800.789.ASIA (2742).
ANNUAL RETURN FOR YEAR ENDED 12/31
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2015
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1 Year |
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Since Inception
(4/30/13) |
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Matthews Asia Focus Fund |
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Return before taxes |
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-12.07% |
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-4.12% |
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Return after taxes on
distributions1 |
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-12.28% |
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-4.31% |
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Return after taxes on distributions and sale of Fund shares1 |
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-6.56% |
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-3.06% |
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MSCI All Country Asia ex Japan Index (reflects no deduction for fees, expenses or taxes) |
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-8.90% |
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-0.89% |
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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 investors
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: Kenneth Lowe, CFA, has been a Portfolio Manager of the Asia Focus Fund since its inception in 2013.
Co-Manager: Michael J. Oh, CFA, has been a Portfolio Manager of the Asia Focus Fund since its inception in 2013.
Co-Manager: Sharat Shroff, CFA, has been a Portfolio Manager of the Asia Focus Fund since its inception in 2013.
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Purchase and Sale of Fund Shares
You may purchase and sell Fund shares directly through the Funds transfer agent by calling 800.789.ASIA (2742) or online at matthewsasia.com. Fund
shares may also be purchased and sold through various securities brokers and benefit plan administrators or their sub-agents. You may purchase and redeem Fund shares by electronic bank transfer, check, or wire. The minimum initial and subsequent
investment amounts for various types of accounts offered by the Funds are shown below.
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Type of Account |
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Minimum Initial Investment |
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Subsequent Investments |
Non-retirement |
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$2,500 |
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$100 |
Retirement and Coverdell |
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$500 |
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$50 |
The minimum investment requirements do not apply to Trustees, officers and employees of the Funds and Matthews,
and their immediate family members.
Tax Information
The Funds 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. Tax-deferred arrangements may be taxed later upon withdrawal from those accounts.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase Fund shares 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 Fund 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
intermediarys website for more information.
4 MATTHEWS ASIA FOCUS FUND