0001193125-21-261770.txt : 20210831 0001193125-21-261770.hdr.sgml : 20210831 20210831133159 ACCESSION NUMBER: 0001193125-21-261770 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20210831 DATE AS OF CHANGE: 20210831 EFFECTIVENESS DATE: 20210831 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MATTHEWS INTERNATIONAL FUNDS CENTRAL INDEX KEY: 0000923184 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 033-78960 FILM NUMBER: 211226377 BUSINESS ADDRESS: STREET 1: FOUR EMBARCADERO CENTER STREET 2: SUITE 550 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 8007898742 MAIL ADDRESS: STREET 1: FOUR EMBARCADERO CENTER STREET 2: SUITE 550 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 0000923184 S000001029 MATTHEWS PACIFIC TIGER FUND C000002785 Investor Class Shares MAPTX C000093221 Institutional Class Shares MIPTX 0000923184 S000001030 MATTHEWS ASIAN GROWTH AND INCOME FUND C000002786 Investor Class Shares MACSX C000093222 Institutional Class Shares MICSX 0000923184 S000001031 MATTHEWS KOREA FUND C000002788 Investor Class Shares MAKOX C000093223 Institutional Class Shares MIKOX 0000923184 S000001032 MATTHEWS CHINA FUND C000002790 Investor Class Shares MCHFX C000093224 Institutional Class Shares MICFX 0000923184 S000001033 MATTHEWS JAPAN FUND C000002791 Investor Class Shares MJFOX C000093225 Institutional Class Shares MIJFX 0000923184 S000001034 MATTHEWS ASIA INNOVATORS FUND C000002792 Investor Class Shares MATFX C000093226 Institutional Class Shares MITEX 0000923184 S000001035 MATTHEWS ASIA GROWTH FUND C000002793 Investor Class Shares MPACX C000093227 Institutional Class Shares MIAPX 0000923184 S000001036 MATTHEWS INDIA FUND C000002794 Investor Class Shares MINDX C000093228 Institutional Class Shares MIDNX 0000923184 S000013856 MATTHEWS ASIA DIVIDEND FUND C000038018 Investor Class Shares MAPIX C000093229 Institutional Class Shares MIPIX 0000923184 S000023269 MATTHEWS EMERGING MARKETS SMALL COMPANIES FUND C000068052 Investor Class Shares MSMLX C000093230 Institutional Class Shares MISMX 0000923184 S000027009 MATTHEWS CHINA DIVIDEND FUND C000081250 Investor Class Shares MCDFX C000093231 Institutional Class Shares MICDX 0000923184 S000032816 MATTHEWS CHINA SMALL COMPANIES FUND C000101279 Investor Class Shares MCSMX C000195803 Institutional Class Shares MICHX 0000923184 S000034706 Matthews Asia Total Return Bond Fund C000106892 Institutional Class Shares MINCX C000106893 Investor Class Shares MAINX 0000923184 S000049136 Matthews Asia ESG Fund C000154925 Investor Class Shares MASGX C000154926 Institutional Class Shares MISFX 0000923184 S000053714 MATTHEWS ASIA CREDIT OPPORTUNITIES FUND C000168876 Investor Class Shares MCRDX C000168877 Institutional Class Shares MICPX 0000923184 S000068521 Matthews Emerging Markets Equity Fund C000219129 Investor Class Shares MEGMX C000219130 Institutional Class Shares MIEFX 497 1 d222477d497.htm FORM 497 Form 497

MATTHEWS ASIA FUNDS

SUPPLEMENT DATED AUGUST 31, 2021

TO THE STATEMENT OF ADDITIONAL INFORMATION

DATED APRIL 30, 2021, AS SUPPLEMENTED (THE “SAI”)

For all existing and prospective shareholders of the Matthews Asia Funds:

Effective immediately, the following disclosure is added directly following “Risks of Investment – Risks Associated with China” on page 15 of the SAI:

Risks of Variable Interest Entities

Certain of the Funds (currently including the Matthews Asia Growth Fund, Matthews Asia Innovators Fund and Matthews China Fund) invest a substantial portion of their assets, and the other Funds may invest to a lesser extent, in certain operating companies in China through legal structures known as variable interest entities (“VIEs”). In China, ownership of companies in certain sectors by foreign individuals and entities (including U.S. persons and entities such as the Funds) is prohibited. In order to facilitate foreign investment in these businesses, many Chinese companies have created VIEs. In such an arrangement, a China-based operating company typically establishes an offshore shell company in another jurisdiction, such as the Cayman Islands. That shell company enters into service and other contracts with the China-based operating company, then issues shares on a foreign exchange, such as the New York Stock Exchange. Foreign investors hold stock in the shell company rather than directly in the China-based operating company. This arrangement allows U.S. investors to obtain economic exposure to the China-based company through contractual means rather than through formal equity ownership.

On July 30, 2021, SEC Chairman Gary Gensler issued a statement addressing recent guidance to and restrictions placed on China-based companies raising capital offshore, including through VIE structures, by the government of China. Chairman Gensler’s statement highlighted his view of certain risks to U.S. investors of investing in VIEs. The risks mentioned by him together with the risks identified by the Funds primarily include the following items. Although VIEs are a longstanding industry practice and well known to officials and regulators in China, VIE structures are not formally recognized under Chinese law. Investors face uncertainty about future actions by the government of China that could significantly affect an operating company’s financial performance and the enforceability of the shell company’s contractual arrangements. It is uncertain whether Chinese officials or regulators will withdraw their implicit acceptance of the VIE structure, or whether any new laws, rules or regulations relating to VIE structures will be adopted or, if adopted, what impact they would have on the interests of foreign shareholders. Under extreme circumstances, China might prohibit the existence of VIEs, or sever their ability to transmit economic and governance rights to foreign individuals and entities; if so, the market value of the Funds’ associated portfolio holdings would likely suffer significant, detrimental, and possibly permanent effects, which could result in substantial investment losses.

Please retain this Supplement with your records.

ST063