Form 497K
Matthews Asia Dividend Fund
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SUMMARY PROSPECTUSINSTITUTIONAL CLASS |
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April 30, 2015 |
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TICKER: MIPIX
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 30, 2015, are
incorporated by reference into this Summary Prospectus.
Investment Objective
Total return with an emphasis on providing 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
(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) Fees |
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Other Expenses |
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0.27% |
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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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0.93% |
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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 Funds operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions your costs
would be:
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One year: $95 |
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Three years: $296 |
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Five years: $515 |
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Ten years: $1,143 |
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 20% of
the average value of its portfolio.
Principal Investment Strategy
Under normal market conditions, the Matthews Asia Dividend Fund seeks to achieve its investment objective by investing at least 80% of its net assets, which
include borrowings for investment purposes, in dividend-paying equity securities of companies located in Asia. The Fund may also invest in convertible debt and equity securities. Asia consists of all countries and markets in Asia, and includes
developed, emerging, and frontier countries and markets in the Asian region. A company is considered to be located in a country or a region if it has substantial ties to that country or region, and currently, Matthews makes that
determination primarily based on one or more of the following
PS-MIPIX-0415
five criteria: if the company (i) is organized under the laws of that country or any country in that region; (ii) 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) has the primary trading markets for its securities in that country or region; (iv) has its principal place of
business in or is otherwise headquartered in that country or region; or (v) is a governmental entity or an agency, instrumentality or a political subdivision of that country or any country in that region. The Fund may also invest in depositary
receipts, including American, European, and Global Depositary Receipts.
The Fund seeks to provide a level of current income that is higher than the yield
generally available in Asian equity markets over the long term. The Fund intends to distribute its realized income, if any, regularly (typically quarterly in March, June, September and December). There is no guarantee that the Fund will be able to
distribute its realized income, if any, regularly. If the value of the Funds investments declines, the NAV of the Fund will decline and investors may lose some or all of the value of their investments.
The Funds objective is total return with an emphasis on providing current income. Total return includes current income (dividends and distributions paid
to shareholders) and capital gains (share price appreciation). The Fund measures total return over longer periods. Because of this objective, the Fund expects that it will primarily invest in companies that exhibit attractive dividend yields and the
propensity (in Matthews judgment) to pay increasing dividends. Matthews believes that in addition to providing current income, growing dividend payments by portfolio companies are an important component supporting capital appreciation.
Matthews expects that such companies typically will be of medium or large size, but the Fund may invest in companies of any size. Matthews measures a companys size with respect to fundamental criteria such as, but not limited to, market
capitalization, book value, revenues, profits, cash flow, dividends paid and number of employees.
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: 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 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).
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 Moodys,
S&P or Fitch, or, if they are rated, they may be rated below investment grade (these are referred to as junk bonds, which are primarily speculative securities, and include unrated securities, regardless of quality), which may have a
greater risk of default. Investments in convertible securities may also subject the Fund to currency risk and risks associated with foreign exchange rate. Convertible securities may trade less frequently and in lower volumes, making it difficult for
the Fund to value those securities.
Dividend-Paying Securities: The Fund will invest in dividend-paying equity or fixed-income 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. The prices of dividend-paying equity securities (and particularly of those issued by Asian companies) can be
highly volatile. In addition, 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 Funds investment in such securities may
also limit its potential for appreciation during a broad market advance.
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.
2 MATTHEWS ASIA DIVIDEND FUND
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 index performance does not take into consideration fees, expenses or taxes. 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 RETURNS FOR YEARS ENDED 12/31
AVERAGE ANNUAL TOTAL RETURNS FOR PERIODS ENDED DECEMBER 31, 2014
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1 year |
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Since Inception (10/29/10) |
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Matthews Asia Dividend Fund |
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Return before taxes |
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-0.18% |
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5.60% |
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Return after taxes on distributions1 |
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-0.43% |
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4.84% |
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Return after taxes on distributions and sale of Fund shares1 |
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0.33% |
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4.38% |
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MSCI All Country Asia Pacific Index |
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(reflects no deduction for fees, expenses or taxes) |
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0.29% |
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4.37% |
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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: Yu Zhang, CFA, has been a Portfolio Manager of the Asia Dividend Fund since 2011.
Lead Manager: Robert Horrocks, PhD, is Chief Investment Officer at Matthews and has been a Portfolio Manager of the Asia Dividend Fund since 2013.
Co-Manager: Vivek Tanneeru has been a Portfolio Manager of the Asia Dividend Fund since 2014.
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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 Fund are shown below.
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Minimum Initial Investment |
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Subsequent Investments |
$3,000,000 |
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$100 |
Minimum amount may be lower for purchases through certain financial intermediaries and different minimums may apply for
retirement plans and other arrangements subject to criteria set by Matthews.
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 DIVIDEND FUND