Matthews Korea Active ETF NCSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-08510

Matthews International Funds

(Exact name of registrant as specified in charter)

Four Embarcadero Center, Suite 550

San Francisco, CA 94111

(Address of principal executive offices) (Zip code)

J. Cooper Abbott, President

Four Embarcadero Center, Suite 550

San Francisco, CA 94111

(Name and address of agent for service)

Registrant’s telephone number, including area code: 415-788-7553

Date of fiscal year end: December 31

Date of reporting period: December 31, 2023

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Reports to Stockholders.

(a) The reports to shareholders are attached herewith.

Matthews Asia Funds | Annual Report

December 31, 2023 | matthewsasia.com

GLOBAL EMERGING MARKETS STRATEGIES

Matthews Emerging Markets Equity Fund

Matthews Emerging Markets Sustainable Future Fund

Matthews Emerging Markets Small Companies Fund

ASIA GROWTH STRATEGIES

Matthews Asia Growth Fund

Matthews Pacific Tiger Fund

Matthews Asia Innovators Fund

Matthews China Fund

Matthews China Small Companies Fund

Matthews India Fund

Matthews Japan Fund

ASIA GROWTH AND INCOME STRATEGIES

Matthews Asian Growth and Income Fund

Matthews Asia Dividend Fund

Matthews China Dividend Fund

LOGO

Investor Class Performance and Expense Ratios (December 31, 2023) (unaudited)


			Average Annual Total Return†						Inception Date		2023 Annual Operating Expense Ratios*		2023 Annual Operating Expense Ratios after Fee Waiver and Expense Reim- bursement**		Prospectus Expense Ratios††		Prospectus Expense Ratios after Fee Waiver and Expense Reim- bursement††
Investor Class	1 year		5 years		10 years		Since Inception		Inception Date		2023 Annual Operating Expense Ratios*				Prospectus Expense Ratios††
GLOBAL EMERGING MARKETS STRATEGIES

Emerging Markets Equity Fund (MEGMX)		8.43%		n.a.		n.a.		9.04%		4/30/20		1.70%		1.12%		1.58%		1.08%	¹

Emerging Markets Sustainable Future Fund (MASGX)		7.83%		10.66%		n.a.		7.23%		4/30/15		1.23%		1.23%		1.24%		1.24%

Emerging Markets Small Companies Fund (MSMLX)		19.88%		15.48%		8.13%		11.16%		9/15/08		1.49%		1.34%		1.49%		1.37%	¹
ASIA GROWTH STRATEGIES

Asia Growth Fund (MPACX)		3.53%		1.82%		2.72%		6.59%		10/31/03		1.13%		1.13%		1.13%		1.13%

Pacific Tiger Fund (MAPTX)		-4.87%		0.56%		3.49%		7.01%		9/12/94		1.12%		1.12%		1.10%		1.09%	²

Asia Innovators Fund (MATFX)		-1.77%		9.21%		7.20%		4.20%		12/27/99		1.15%		1.15%		1.18%		1.18%

China Fund (MCHFX)		-19.22%		0.62%		1.83%		7.22%		2/19/98		1.15%		1.15%		1.12%		1.12%

China Small Companies Fund (MCSMX)		-17.51%		6.21%		5.34%		4.25%		5/31/11		1.55%		1.41%		1.55%		1.41%	¹

India Fund (MINDX)		23.10%		8.62%		11.65%		10.28%		10/31/05		1.14%		1.14%		1.15%		1.15%

Japan Fund (MJFOX)		17.99%		6.45%		5.55%		5.54%		12/31/98		1.09%		1.09%		1.05%		1.05%
ASIA GROWTH AND INCOME STRATEGIES

Asian Growth and Income Fund (MACSX)		3.33%		2.78%		1.81%		7.61%		9/12/94		1.15%		1.15%		1.13%		1.13%

Asia Dividend Fund (MAPIX)		4.69%		0.89%		2.85%		6.09%		10/31/06		1.10%		1.10%		1.10%		1.10%

China Dividend Fund (MCDFX)		-20.67%		-1.25%		3.12%		5.42%		11/30/09		1.17%		1.17%		1.20%		1.20%

†	Annualized performance for periods of at least one year, otherwise cumulative.

*	Before fee waivers and expense reimbursement.

**	Expense ratio represents the actual expense ratio a shareholder would have paid if they had been invested the entire year.

††	These figures are from the Funds’ prospectus dated as of April 28, 2023, and may differ from the actual expense ratios for fiscal year 2023, as shown in the financial highlights section of this report.

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 1.20% (except for the Matthews Emerging Markets Equity Fund, Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund, which have expense limitations of 0.90%, 1.15% and 1.15%, respectively, for the Institutional Class) 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 (e.g., custody fees) 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 1.20% expense limitation (or 0.90% for the Matthews Emerging Markets Equity Fund, or 1.15% for the Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund), 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 1.20% (or 0.90% for the Matthews Emerging Markets Equity Fund, or 1.15% for the Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund). If the operating expenses fall below the expense limitation 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, 2025 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

Matthews has contractually agreed to waive a portion of its advisory fee and administrative and shareholder services fee if the Fund’s average daily net assets are over $3 billion, as follows: for every $2.5 billion average daily net assets of the Fund that are over $3 billion, the advisory fee rate and the administrative and shareholder services fee rate for the Fund with respect to such excess average daily net assets will be each reduced by 0.01%, in each case without reducing such fee rate below 0.00%. Any amount waived by Matthews pursuant to this agreement may not be recouped by Matthews. This agreement will remain in place until April 30, 2025 and may be terminated (i) at any time by the Board of Trustees upon 60 days’ prior written notice to Matthews; or (ii) by Matthews at the annual expiration date of the agreement upon 60 days’ prior written notice to the Trust, in each case without payment of any penalty.


2		MATTHEWS ASIA FUNDS

Institutional Class Performance and Expense Ratios (December 31, 2023) (unaudited)


			Average Annual Total Return†						Inception Date		2023 Annual Operating Expense Ratios*		2023 Annual Operating Expense Ratios after Fee Waiver and Expense Reim- bursement**		Prospectus Expense Ratios††		Prospectus Expense Ratios after Fee Waiver and Expense Reim- bursement††
Institutional Class	1 year		5 years		10 years		Since Inception		Inception Date		2023 Annual Operating Expense Ratios*				Prospectus Expense Ratios††
GLOBAL EMERGING MARKETS STRATEGIES

Emerging Markets Equity Fund (MIEFX)		8.63%		n.a.		n.a.		9.25%		4/30/20		1.51%		0.90%		1.47%		0.90%	¹

Emerging Markets Sustainable Future Fund (MISFX)		8.04%		10.84%		n.a.		7.44%		4/30/15		1.10%		1.10%		1.11%		1.11%

Emerging Markets Small Companies Fund (MISMX)		20.12%		15.71%		8.36%		7.82%		4/30/13		1.38%		1.15%		1.37%		1.15%	¹
ASIA GROWTH STRATEGIES

Asia Growth Fund (MIAPX)		3.69%		1.98%		2.89%		4.02%		10/29/10		0.98%		0.98%		0.98%		0.98%

Pacific Tiger Fund (MIPTX)		-4.75%		0.69%		3.65%		3.67%		10/29/10		0.99%		0.98%		0.97%		0.96%	²

Asia Innovators Fund (MITEX)		-1.62%		9.35%		7.39%		9.17%		4/30/13		1.02%		1.02%		1.04%		1.04%

China Fund (MICFX)		-19.11%		0.79%		1.99%		1.19%		10/29/10		1.01%		1.01%		0.98%		0.98%

China Small Companies Fund (MICHX)		-17.37%		6.43%		n.a.		3.00%		11/30/17		1.41%		1.20%		1.38%		1.20%	¹

India Fund (MIDNX)		23.27%		8.77%		11.83%		6.78%		10/29/10		1.01%		1.01%		1.01%		1.01%

Japan Fund (MIJFX)		18.08%		6.49%		5.63%		7.47%		10/29/10		1.02%		1.02%		0.97%		0.97%
ASIA GROWTH AND INCOME STRATEGIES

Asian Growth and Income Fund (MICSX)		3.39%		2.92%		1.95%		3.05%		10/29/10		1.02%		1.02%		1.01%		1.01%

Asia Dividend Fund (MIPIX)		4.77%		0.99%		2.96%		4.03%		10/29/10		0.99%		0.99%		0.99%		0.99%

China Dividend Fund (MICDX)		-20.58%		-1.12%		3.28%		4.52%		10/29/10		1.04%		1.04%		1.06%		1.06%

†	Annualized performance for periods of at least one year, otherwise cumulative.

*	Before fee waivers and expense reimbursement.

**	Expense ratio represents the actual expense ratio a shareholder would have paid if they had been invested the entire year.

††	These figures are from the Funds’ prospectus dated as of April 28, 2023, and may differ from the actual expense ratios for fiscal year 2023, as shown in the financial highlights section of this report.

Matthews has contractually agreed 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 1.20% (except for the Matthews Emerging Markets Equity Fund, Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund, which have expense limitations of 0.90%, 1.15% and 1.15%, respectively, for the Institutional Class). If the operating expenses fall below the expense limitation 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, 2025 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

Past Performance: All performance quoted in this report is past performance and is no guarantee of future results. Investment return and principal value will fluctuate with changing market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the returns quoted. If certain of the Funds’ fees and expenses had not been waived, returns would have been lower. For the Funds’ most recent month-end performance, please call 800.789.ASIA (2742) or visit matthewsasia.com.


matthewsasia.com \| 800.789.ASIA			3

LOGO

This report has been prepared for Matthews International Funds (d/b/a Matthews Asia Funds) shareholders. It is not authorized for distribution to prospective investors unless accompanied or preceded by a current Matthews Asia Funds prospectus, which contains more complete information about the Funds’ investment objectives, risks and expenses. Additional copies of the prospectus or summary prospectus may be obtained at matthewsasia.com. Please read the prospectus carefully before you invest or send money.

The views and opinions in this report were current as of December 31, 2023. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the managers reserve the right to change their views about individual stocks, sectors and the markets at any time. As a result, the views expressed should not be relied upon as a forecast of a Fund’s future investment intent. Current and future portfolio holdings are subject to risk.

Statements of fact are from sources considered reliable, but neither the Funds nor the Investment Advisor makes any representation or guarantee as to their completeness or accuracy.


4		MATTHEWS ASIA FUNDS

Contents



Message to Shareholders from the President of Matthews Asia Funds			6

Message to Shareholders from the Investment Advisor			8

Manager Commentaries, Fund Characteristics and Schedules of Investments:

GLOBAL EMERGING MARKETS STRATEGIES
Matthews Emerging Markets Equity Fund			10
Matthews Emerging Markets Sustainable Future Fund			15
Matthews Emerging Markets Small Companies Fund			20

ASIA GROWTH STRATEGIES
Matthews Asia Growth Fund			25
Matthews Pacific Tiger Fund			29
Matthews Asia Innovators Fund			33
Matthews China Fund			37
Matthews China Small Companies Fund			42
Matthews India Fund			47
Matthews Japan Fund			52

ASIA GROWTH AND INCOME STRATEGIES
Matthews Asian Growth and Income Fund			57
Matthews Asia Dividend Fund			62
Matthews China Dividend Fund			66

Index Definitions			71
Disclosures			72
Disclosure of Fund Expenses			73
Statements of Assets and Liabilities			75
Statements of Operations			85
Statements of Changes in Net Assets			90
Financial Highlights			97
Notes to Financial Statements			110
1. Organization			110
2. Significant Accounting Policies			110
3. Capital Shares Transactions			116
4. Investment Advisory Fees and Other Transactions with Affiliates			118
5. Investments			121
6. Income Tax Information			121
7. Subsequent Events			123
Report of Independent Registered Public Accounting Firm			124
Tax Information			125
Approval of Investment Advisory Agreement			128
Statement Regarding Liquidity Risk Management Program			134
Trustees and Officers of the Funds			135

Investment Risk: Mutual fund shares are not deposits or obligations of, or guaranteed by, any depositary institution. Shares are not insured by the FDIC, Federal Reserve Board or any government agency and are subject to investment risks, including possible loss of principal amount invested. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Fixed income investments are subject to additional risks, including, but not limited to, interest rate, credit and inflation risks. In addition, single-country and sector funds may be subject to a higher degree of market risk than diversified funds because of a concentration in a specific industry, sector or geographic location. Investing in small and mid-size companies is more risky than investing in large companies as they may be more volatile and less liquid than larger companies. Please see the Funds’ Prospectuses and Statement of Additional Information for more risk disclosure.


matthewsasia.com \| 800.789.ASIA			5

LOGO

Message to Shareholders from the President of Your Funds

Dear Fellow Shareholder,

Thank you for your continued trust in Matthews as your active partner in a World of Emerging Opportunities.

I believe that Emerging Markets, Asia and China can offer investors important opportunity sets for returns and diversification. The Year of the Dragon may present unique prospects for investors willing to look beyond immediate-term volatility and headlines and focus on specific companies and the long-term growth potential of dynamic economies.

Emerging Markets

2023 was a volatile year for equity and fixed income markets around the world but Emerging Market economies remained resilient, with their central banks largely ahead of inflation and managing rates effectively. We saw renewed interest in India (digitalization and financialization, along with a Moon landing) and South Korea (technology and cultural leadership), as well as broader Emerging Market mandates. While China’s markets remained challenging as it emerged from COVID lockdowns—disappointing expectations for a sharp rebound and geopolitical ‘balloons’—quarterly financials of leading Chinese companies have begun to show encouraging results in both revenue and earnings. Meanwhile, small and mid caps outside of China performed well as investors looked into opportunities in companies that are less affected by regulatory and external concerns and are tied more directly to local economies. Asia’s developed markets, such as Japan, are also generating interest once again, driven by resilient earnings growth amid a tepid global macro economy.

As we look ahead, Emerging Markets and Asia—including India, Brazil, Mexico, Japan, Vietnam and the Gulf—remain attractive with increased opportunities for stock picking supported by risk awareness. Many of the markets we invest in offer compelling valuation and diversification potential. With deep investment experience in these markets and strong fundamental research capabilities, the importance of Matthews as an experienced and trusted guide remains paramount.

Matthews’ Active ETFs and the Power of Choice

Based on our history of providing investors with unique access to Emerging Markets, Asia and China, we further enhanced our leadership in Active ETFs during the year. Building upon the first of their kind suite of active ETFs focused on these regions, Matthews added nine Active ETFs through January 2024. This suite of 12 active, research-based ETF vehicles incorporate experienced insights, sustainability considerations, and our deep research to offer a range of investment opportunity in a new way.

These sophisticated investments incorporate deep understanding of markets and companies to build differentiated portfolios, providing investors with the ‘power of choice’ for investing—and fine-tuning exposures—in these dynamic markets.

Evolution…and Looking Forward

2023 was a year of dynamic changes, focused on the future. At the Funds’ Board of Trustees level, we bid farewell to Toshi Shibano as he retired as a Trustee. He has been replaced by industry veteran Neal Andrews who brings 35 years of experience in financial services, adding to the diverse perspectives and experience of your Board of Trustees, led by Board Chair Gale Caruso. Additionally, Sean Taylor succeeded Robert Horrocks, PhD, as Matthews’ Chief Investment Officer as of January 1, 2024, bringing a depth of intellectual knowledge and team management across Emerging Markets. We thank Toshi and Robert for their support—and Robert will continue as a portfolio manager on the Matthews Asian Growth and Income and the Matthews Asia Dividend Funds.


6		MATTHEWS ASIA FUNDS

Looking forward, we will continue to maintain a thoughtful and opportunistic approach to identifying the most attractive long-term investment prospects and we remain steadfast in our research-based investment strategy.

We take seriously the stewardship of your assets and thank you for being a valued shareholder during what has been a tumultuous and challenging year. We look forward to the opportunities to come in the Lunar Year of the Dragon!

LOGO

Cooper Abbott, CFA

President of the Matthews Asia Funds

Chief Executive Officer, Matthews Asia


				matthewsasia.com \| 800.789.ASIA			7

LOGO

Message to Shareholders from the

Investment Advisor

Dear Valued Shareholder,

At the start of 2023, much attention was devoted to China. Emerging later than most from COVID lockdowns, China was anticipated by investors to deliver a post-pandemic economic recovery similar to that of other markets. And yet they were to be disappointed. The magnitude of the miscalculation was not immediately evident. However, as the year continued, one disappointment followed the next and the stocks of major companies in China ground down, impacting markets and the relative performance of your portfolios to different degrees.

Many explanations have been given for China’s weak recovery: an interventionist regulatory environment; continued geopolitical risks; underlying lack of confidence among consumers and businesses; and perhaps even fears of a global recession. What seems undeniable is that the problems China encountered were largely domestic in nature and therefore its real problems were domestic as well. A remarkable feature of China’s economic recovery has been consumers ‘trading down’ to cheaper goods while interest rates fell, inflation subsided and unemployment, particularly youth unemployment, rose to a level where it seems the authorities were no longer comfortable publishing the figures.

Less Scrooge, more Ebeneezer

You can talk about geopolitical risks and other external headwinds but I think China’s woes have, to a significant extent, been self-inflicted. After seeing the rise in inflation in other countries after their COVID-related stimulus measures, China’s government declined to boost its own economy. It also continued moves to curb speculation in its housing market. Both decisions negatively impacted the economy significantly, in my view. The subsequent removal of many of the restrictions and rhetoric seeking to limit housing market activity is good news and may well have laid the ground for more effective stimulus measures. We shall see.

Other countries that your portfolios can invest in were less overly restrictive in their policy- making in 2023, in my opinion, preferring to be more Ebeneezer and less Scrooge. This meant that some saw inflation rates rise—India, Brazil, Mexico among them—in the immediate post-COVID period and thus spent much of the last year with elevated interest rates. And yet their domestic demand was strong and many emerging markets economies performed surprisingly well given that backdrop. The transient nature of inflation—another way of saying that a good portion was created by temporary supply-chain issues—meant that stimulus could also be withdrawn without great damage to their economies. The overall resilience of emerging markets in this rate-rise cycle, I believe, was a mixture of good policy choices made in the past and some good fortune in that the nature of the inflation problem made it inherently easier to treat.

While returns were hard to come by in 2023, there were some standout performances and India was one of them. Prime Minister Modi’s reforms are starting to bear fruit, and hopes of global supply chain realignments bringing more manufacturing export business to India are also cause for optimism even if results on the ground remain debatable. By the end of 2023, some of the blush looked to have come off the rose as falling nominal growth rates started to approach the level of interest rates on India’s government debt and this brought fiscal pressures back into focus. Still, the growth runway for India remains robust and compelling in our view.


8		MATTHEWS ASIA FUNDS

falling inflation and, if the promise of recession-less disinflation bears out, the cyclicality of many of its business will not be the headwind that many fear.

Japan has also done well though it did finish 2023 on comparatively high valuations. For close to 20 years, I have thought that Japan has needed inflation and I expect that global disinflationary conditions may slow its progress somewhat relative to other markets. Nevertheless, it remains home to world-class companies that will do well amid a weak yen.

Markets with opportunities

In terms of industry trends, semiconductors were a strong source of market excitement. In this segment, Asia has some top quality companies and they continued to perform well. As belief grows over some of the productivity-enhancing aspects of artificial intelligence (AI), chip companies can expect continued strong demand, I believe. AI, for now, can do routine work where compromises can be made on quality and originality and I can see how this could be a boon for developed markets where low-skilled tasks are costly. In the medium term, at least, this is less likely to be an opportunity in low-wage economies. Therefore, I see AI impacting our markets and our portfolios most positively in the areas of hardware and components rather than from the practical adoption of the technology.

It was also a strong year for smaller companies. Smaller-scale businesses tend to do well in reflationary environments and that has been the case in this cycle. At Matthews, we have always had a tilt toward smaller companies because of the greater entrepreneurship they embody relative to their less commercial (or sometimes commercial but over-regulated) large-cap competitors. I would expect this to be a bias that continues in the future.

At the same time as small caps rallied, value companies also picked up. Value-stock rallies are often correlated with a rebound in cyclical names in the financial and raw materials industries. Perhaps nowhere was this effect more noticeable than in Japan where its large trading companies had stellar performances. In a relative sense, this detracted from performance in some cases as your portfolios are typically weighted more toward secular growth.

In 2024, concerns over China’s weak recovery and the struggles of its many former mega-cap leaders will undoubtedly remain. The year, however, also holds the possibility of being one of many changes. Hong Kong, for example, has been hit hard—by the weak demand in China and by the fact that due to its fixed exchange rate, its interest rates must rise in the face of such economic weakness, precisely the opposite of what economic common sense dictates. As the U.S. enters a downward rate cycle, it could be positioned for a reversal in fortune.

And beyond China we also have solid grounds for optimism. India’s outlook appears sound, key markets in Latin America are in good shape, and emerging markets, particularly in Asia, will likely become ever more embedded in secular trends like AI. Navigating these opportunities will demand flexibility and a continued focus on companies adept at plotting their own course for growth. In all cases, we shall place emphasis on finding good businesses for the long term.

Finally, as of January 1st, I am stepping down from my CIO responsibilities. What a privilege it has been to work with my colleagues on your behalf. But I felt it was time for a change. We have all—myself, Cooper, and many other colleagues on the investment team and in other departments—worked together to find Sean Taylor to take over the role. He has all the experience needed to run and grow a successful Emerging Markets and Asian team and will strive to achieve good performance in your portfolios. I remain at Matthews to continue to do my bit as a Portfolio Manager in that effort.

LOGO

Robert Horrocks, PhD

Chief Investment Officer

Matthews International Capital Management, LLC


				matthewsasia.com \| 800.789.ASIA			9

LOGO


PORTFOLIO MANAGERS

Alex Zarechnak
Lead Manager

Sean Taylor		Andrew Mattock,CFA
Co-Manager		Co-Manager

Peeyush Mittal, CFA		Jeremy Sutch, CFA
Co-Manager		Co-Manager



FUND FACTS

	Investor	Institutional
Ticker	MEGMX	MIEFX
CUSIP	577130651	577130644
Inception	4/30/20	4/30/20
NAV	$11.86	$11.84
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.70%	1.51%
After fee waiver and Reimbursement²	1.12%	0.90%
Portfolio Statistics
Total # of Positions		57
Net Assets		$20.9 million
Weighted Average Market Cap		$116.1 billion
Portfolio Turnover³		26.4%
Benchmark
MSCI Emerging Markets Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews Emerging Markets Equity Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Emerging Markets Equity Fund returned 8.43% (Investor Class) and 8.63% (Institutional Class), while its benchmark, the MSCI Emerging Markets Index, returned 10.27% over the same period. For the fourth quarter, the Fund returned 7.37% (Investor Class) and 7.47% (Institutional Class), while the benchmark returned 7.93%.

Market Environment

2023 was challenging for emerging markets on a number of levels. At the macro level, rising interest rates and a strong U.S. dollar were headwinds while geopolitical tensions between the U.S. and China remained elevated and continued to be a significant drag on international sentiment toward China. Another notable trait of the year was the prolonged weakness of the Chinese economy. The rapid post-COVID recovery that many investors expected didn’t materialize and the country struggled with a lack of confidence and problems in specific sectors like real estate. Mitigating China’s woes somewhat was India’s continued resilient growth, supported in part by its domestic infrastructure programs and increasing global trade. Toward the end of the year, there was a general consensus that inflation had peaked in the global economy and that the U.S. Federal Reserve would pivot toward cutting rates in 2024.

It is also encouraging to reflect on the economic conditions of most emerging markets coming out of the pandemic. COVID was a ‘stress test’ that most of these markets passed as far as macroeconomic policy and financial conditions are concerned. Emerging markets stimulated less fiscally and monetarily compared with developed markets and that left them with lower relative debt levels and more monetary policy credibility.

Performance Contributors and Detractors

At the regional level, our overweight and stock selection in Mexico was the biggest contributor to total and relative returns in 2023, benefiting from gains in real estate, cement and banking stocks. An underweight to China also supported relative performance, as did our off-benchmark positions in Vietnam and the U.S., the latter buoyed by semiconductor equipment and enterprise software positions. On the other hand, stock selection in India was the biggest detractor to relative returns. We think we got our India allocation decision right, but poor stock selection more than offset that. Our underweight in technology companies in Taiwan and underweight and stock selection in South Korea also detracted.

At the sector level, stock selection in real estate contributed the most to relative returns in the period. An overweight to IT also contributed, as did an underweight and stock selection in consumer staples. In contrast, stock selection in consumer discretionary was the biggest detractor to relative performance due to holdings in China. Stock selection in energy also impacted relative returns.

At the holdings level, Prologis Property Mexico, a Mexican real estate developer, FPT Corp., a Vietnamese IT services company, Banco BTG Pactual, a Brazilian

(continued)

1	Actual 2023 expense ratios.

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 0.90% 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 (e.g., custody fees) 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 0.90% 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 0.90%. If the operating expenses fall below the expense limitation 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, 2025 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

3	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


10		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		Since Inception		Inception date
Investor Class (MEGMX)		7.37%		8.43%		-5.20%		9.04%		04/30/20
Institutional Class (MIEFX)		7.47%		8.63%		-5.03%		9.25%		04/30/20
MSCI Emerging Markets Index⁴		7.93%		10.27%		-4.71%		5.82%

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. Returns would have been lower if certain of the Fund’s fees and expenses had not been waived. For the Fund’s most recent month-end performance visit matthewsasia.com.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Plotted monthly. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gains distributions or redemption of Fund shares. Values are in US$.

It is not possible to invest directly in an index. Source: Index data from Morgan Stanley Capital International and Bloomberg; total return calculations performed by BNY Mellon Investment Servicing (US) Inc. Please see page 71 for index definition.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		6.7%
Samsung Electronics Co., Ltd., Pfd.	Information Technology	South Korea		6.1%
Tencent Holdings, Ltd.	Communication Services	China/Hong Kong		4.0%
Prologis Property Mexico SA de CV REIT	Real Estate	Mexico		4.0%
HDFC Bank, Ltd.	Financials	India		3.6%
Banco BTD Pactual SA	Financials	Brazil		2.7%
FPT Corp.	Information Technology	Vietnam		2.7%
ICICI Bank, Ltd.	Financials	India		2.5%
Infosys, Ltd.	Information Technology	India		2.5%
TotalEnergies SE	Energy	France		2.4%
% OF ASSETS IN TOP 10				37.2%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			11



COUNTRY ALLOCATION (%)^6,7
India			16.9
China/Hong Kong			15.8
Brazil			10.9
Mexico			9.0
South Korea			7.5
Taiwan			6.7
United States			5.5
Vietnam			5.0
France			3.7
Philippines			2.7
Australia			2.4
Indonesia			2.2
United Arab Emirates			2.1
United Kingdom			2.1
Poland			2.0
Kazakhstan			1.5
Switzerland			1.4
Saudi Arabia			1.0
Cash and other Assets, Less Liabilities			1.6



SECTOR ALLOCATION (%)⁷
Financials			24.7
Information Technology			22.3
Consumer Discretionary			15.1
Materials			10.3
Energy			5.8
Real Estate			5.0
Consumer Staples			4.5
Industrials			4.2
Communication Services			4.0
Health Care			2.5
Cash and other Assets, Less Liabilities			1.6



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			58.9
Large Cap ($10B–$25B)			12.4
Mid Cap ($3B–10B)			20.5
Small Cap (under $3B)			6.6
Cash and Other Assets, Less Liabilities			1.6

6	Not all countries where the Fund may invest are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Emerging Markets Equity Fund

Portfolio Manager Commentary (unaudited) (continued)

investment bank and Globant, an enterprise software company with coders located throughout emerging markets, were among the top contributors to total and relative returns in 2023. Prologis benefited from the growing demand for quality warehouse space in Mexico, driven partly by re-shoring of supply chains from Asia. Globant bucked the trend of weaker enterprise software demand by nimbly emphasizing new verticals, like sports and entertainment, and leaning into vibrant geographies like Latin America and the Middle East. On the other hand, Chinese e-commerce company JD.com was the biggest detractor to total returns and was among the biggest detractors to relative returns. The company struggled against the backdrop of weak consumption as well as rising competitive intensity in the industry. First Quantum Minerals, a Canadian-based miner with global operations, also detracted, following a forced shutdown of its copper mine in Panama after countrywide protests. We exited that position toward the end of the year. Asia focused insurers AIA Group and Prudential also declined in 2023.

Notable Portfolio Changes

The portfolio added a number of new positions, including Emaar Properties, a real estate developer in Dubai, and Prio, a Brazilian oil and gas producer. Emaar will benefit, we believe, as Dubai’s reforms attract capital and stimulate economic growth. Prio is building a strong oil production business, in our view, by buying and rehabilitating fields which larger companies no longer want. On the flip side, we sold positions in companies including First Quantum, CapitaLand, a real estate investment trust in Singapore, and Bangkok Dusit Medical Services (BDMS), a hospital operator.

Outlook

We continue to find many attractive emerging markets companies to consider for the portfolio. Even in uncertain times they are solving problems for their societies, or creating value for their customers. Inflation in emerging markets is also on the way down, and interest rate cuts around the world this year could help overall liquidity conditions. Near-shoring and ‘China+1’ trends also continue to benefit countries in Southeast Asia, Central Europe and Latin America. In the Middle East, the landscape has been changing as Saudi Arabia and the United Arab Emirates diversify away from oil. In Asia, we believe economies are finding their feet post COVID and we expect some cyclical growth to return. We also see opportunities coming from domestic structural drivers like infrastructure spend in certain markets, notably India, and these could help counter any slowdown in global trade and economic activity.


12		MATTHEWS ASIA FUNDS

Matthews Emerging Markets Equity Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 92.3%


	Shares		Value

INDIA: 16.9%

HDFC Bank, Ltd. ADR		11,062		$742,371

ICICI Bank, Ltd. ADR		21,795		519,593

Infosys, Ltd. ADR		28,026		515,118

UltraTech Cement, Ltd.		3,073		387,663

Indian Hotels Co., Ltd.		63,174		332,613

PI Industries, Ltd.		6,829		288,430

Restaurant Brands Asia, Ltd.^b		209,610		281,375

Varun Beverages, Ltd.		15,667		232,739

Kotak Mahindra Bank, Ltd.		9,803		224,612

Total India				3,524,514



CHINA/HONG KONG: 15.8%

Tencent Holdings, Ltd.		22,300		841,934

AIA Group, Ltd.		48,000		417,738

H World Group, Ltd. ADR		10,609		354,765

JD.com, Inc. Class A		24,102		348,107

Midea Group Co., Ltd. A Shares		43,300		333,633

Yum China Holdings, Inc.		6,789		288,057

BYD Co., Ltd. A Shares		10,200		283,456

Innovent Biologics, Inc.^b,c,d		30,500		167,032

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		3,700		151,006

PDD Holdings, Inc. ADR^b		702		102,710

Midea Group Co., Ltd. A Shares		1,300		9,970

Total China/Hong Kong				3,298,408



BRAZIL: 10.9%

Banco BTG Pactual SA		72,400		559,980

Armac Locacao Logistica E Servicos SA		93,200		327,007

Vale SA ADR		20,337		322,545

Vinci Partners Investments, Ltd. Class A		28,479		311,845

WEG SA		31,900		242,336

PRIO SA		22,500		212,842

Hapvida Participacoes e Investimentos SA^b,c,d		213,800		195,713

NU Holdings, Ltd. Class A^b		13,756		114,587

Total Brazil				2,286,855



MEXICO: 9.0%

Prologis Property Mexico SA de CV REIT		173,798		826,464

GCC SAB de CV		34,800		410,034

Grupo Financiero Banorte SAB de CV Class O		35,400		355,981

Becle SAB de CV		144,700		283,503

Total Mexico				1,875,982



TAIWAN: 6.7%

Taiwan Semiconductor Manufacturing Co., Ltd.		73,000		1,399,523

Total Taiwan				1,399,523



UNITED STATES: 5.5%

Globant SA^b		2,012		478,816

Applied Materials, Inc.		2,715		440,020

Freeport-McMoRan, Inc.		5,471		232,900

Total United States				1,151,736


	Shares		Value

VIETNAM: 5.0%

FPT Corp.		140,154		$554,696

Military Commercial Joint Stock Bank		388,657		298,459

HDBank		242,006		202,347

Total Vietnam				1,055,502



FRANCE: 3.7%

TotalEnergies SE ADR		7,508		505,889

LVMH Moet Hennessy Louis Vuitton SE		329		267,325

Total France				773,214



PHILIPPINES: 2.7%

Ayala Corp.		25,290		310,954

Wilcon Depot, Inc.		661,500		249,668

Total Philippines				560,622



AUSTRALIA: 2.4%

Woodside Energy Group, Ltd.		23,786		502,280

Total Australia				502,280



INDONESIA: 2.2%

PT Bank Rakyat Indonesia Persero Tbk		1,243,200		462,057

Total Indonesia				462,057



UNITED KINGDOM: 2.1%

Prudential PLC		38,583		435,320

Total United Kingdom				435,320



UNITED ARAB EMIRATES: 2.1%

Emaar Properties PJSC		103,343		222,861

Fertiglobe PLC		254,840		206,079

Total United Arab Emirates				428,940



POLAND: 2.0%

Dino Polska SA^b,c,d		3,583		419,517

Total Poland				419,517



KAZAKHSTAN: 1.5%

Kaspi.KZ JSC GDR^d		3,411		313,812

Total Kazakhstan				313,812



SOUTH KOREA: 1.4%

LG Chem, Ltd.		786		302,314

Total South Korea				302,314



SWITZERLAND: 1.4%

Cie Financiere Richemont SA Class A		2,140		295,586

Total Switzerland				295,586



SAUDI ARABIA: 1.0%

Bupa Arabia for Cooperative Insurance Co.		3,540		201,261

Total Saudi Arabia				201,261


				matthewsasia.com \| 800.789.ASIA			13

Matthews Emerging Markets Equity Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value

RUSSIA: 0.0%

Sberbank of Russia PJSC^e		128,308		$1,438

LUKOIL PJSC ADR^b,e		18,010		360

TCS Group Holding PLC GDR^b,d,e		3,865		77

Total Russia				1,875



TOTAL COMMON EQUITIES				19,289,318

(Cost $20,438,657)


PREFERRED EQUITIES: 6.1%

SOUTH KOREA: 6.1%

Samsung Electronics Co., Ltd., Pfd.		26,364		1,270,389

Total South Korea				1,270,389



TOTAL PREFERRED EQUITIES				1,270,389

(Cost $1,631,359)


TOTAL INVESTMENTS: 98.4%				20,559,707
(Cost $22,070,016)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.6%				342,396



NET ASSETS: 100.0%				$20,902,103

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. The security may be resold in transactions exempt from registration normally to qualified institutional buyers. The security has been determined to be liquid in accordance with procedures adopted by the Funds’ Board of Trustees. At December 31, 2023, the aggregate value is $782,262, which is 3.74% of net assets.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

e	Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. The aggregate value of Level 3 securities is $1,875 and 0.01% of net assets.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

JSC	Joint Stock Co.

Pfd.

Preferred

PJSC	Public Joint Stock Co.

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


14		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGER

Vivek Tanneeru
Lead Manager

Inbok Song
Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MASGX	MISFX
CUSIP	577130727	577130719
Inception	4/30/15	4/30/15
NAV	$12.54	$12.55
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.23%	1.10%
Portfolio Statistics
Total # of Positions		56
Net Assets		$209.5 million
Weighted Average Market Cap		$18.0 billion
Portfolio Turnover²		49.2%
Benchmark
MSCI Emerging Markets Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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 of any market capitalization located in emerging market countries that satisfy one or more of the Fund’s environmental, social and governance (“ESG”) standards. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe.

Matthews Emerging Markets Sustainable Future Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Emerging Markets Sustainable Future Fund returned 7.83% (Investor Class) and 8.04% (Institutional Class), while its benchmark, the MSCI Emerging Markets Index, returned 10.27% over the same period. For the fourth quarter, the Fund returned 2.35% (Investor Class) and 2.40% (Institutional Class), while the benchmark returned 7.93%.

Market Environment

2023 was a year of opportunities and challenges marked by two distinct narratives: the Federal Reserve’s ‘higher for longer’ interest rate strategy and China’s labored and ongoing struggle to recover from the pandemic. Elevated interest rates and a strong U.S. dollar posed headwinds while China’s travails impacted the economies of other markets like Thailand. But there were also strong performances by markets like India which benefited from national infrastructure programs and strong domestic investor inflows. Smaller companies in emerging markets also thrived in many cases in 2023. And toward the end of the year there was a general consensus that inflation had peaked in the global economy and that the Fed would pivot toward cutting rates in 2024. This provided some tailwinds across markets.

Hungary was the best-performing emerging market during 2023, followed by Greece, Poland and Egypt, while larger markets like India, Brazil and Mexico delivered robust returns. China was the worst-performer followed by Thailand and Kuwait. From a sector perspective, information technology (IT) was the top performer, supported by market exuberance over advancements in generative artificial intelligence (AI), while real estate and consumer discretionary were the worst performers, impacted in part by China’s challenges in these sectors.

From a currency perspective, Latin American currencies like the Colombian peso, Mexican peso and Brazilian real appreciated against the U.S. dollar alongside Eastern European currencies like the Polish zloty and Hungarian forint. The Argentinian peso, Turkish lira and South African rand were the worst performers.

Performance Contributors and Detractors

From a country perspective, stock selection in South Korea was the top contributor to total and relative returns. Stock selection in Brazil and an overweight and stock selection in India also contributed. On the flip side, an overweight allocation and stock selection in China/Hong Kong were the biggest detractors to total and relative returns in the period. As the year progressed, markets grew more pessimistic about the prospects of China’s economic recovery, for a turnaround in its real estate sector and for an improvement in consumer sentiment. A lack of exposure to Mexico and Greece and an allocation to Estonia also detracted from relative returns.

At the sector level, an overweight and stock selection in financials, stock selection in real estate, and an underweight and stock selection in consumer discretionary contributed to returns. In contrast, stock selection in consumer staples and IT and a lack of exposure to energy were the biggest detractors to relative performance.

From an individual holdings perspective, Ecopro BM, a South Korean cathode maker, Shriram Finance, an Indian financial services provider, and YDUQS, a Brazilian on-campus and distance-learning education company, were the top

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			15



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 years		5 years		Since Inception		Inception Date
Investor Class (MASGX)³		2.35%		7.83%		1.05%		10.66%		7.23%		4/30/15
Institutional Class (MISFX)³		2.40%		8.04%		1.21%		10.84%		7.44%		4/30/15
MSCI Emerging Markets Index⁴		7.93%		10.27%		-4.71%		4.07%		2.59%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Plotted Monthly. The performance data and graph do not reflect the deduction of taxes that a shareholder would pay on dividends, capital gain distributions or redemption of Fund shares. Values are in US$.

Before July 29, 2022, the Fund was managed with a slightly different investment strategy and may have achieved different performance results under its current investment strategy from the performance shown for periods before that date.

It is not possible to invest directly in an index. Source: Index data from Morgan Stanley Capital International; total return calculations performed by BNY Mellon Investment Servicing (US) Inc. Please see page 71 for index definition.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Shriram Finance, Ltd.	Financials	India		6.9%
Bandhan Bank, Ltd.	Financials	India		6.5%
Full Truck Alliance Co., Ltd.	Industrials	China/Hong Kong		5.7%
JD Health International, Inc.	Consumer Staples	China/Hong Kong		5.7%
Meituan Class B	Consumer Discretionary	China/Hong Kong		4.5%
Samsung SDI Co., Ltd., Pfd.	Information Technology	South Korea		4.0%
B3 SA - Brasil Bolsa Balcao	Financials	Brazil		3.6%
Micron Technology, Inc.	Information Technology	United States		3.6%
Legend Biotech Corp.	Health Care	China/Hong Kong		3.5%
YDUQS Participacoes SA	Consumer Discretionary	Brazil		3.4%
% OF ASSETS IN TOP 10				47.4%

Holdings may combine more than one security from same issuer and related depositary receipts.


16		MATTHEWS ASIA FUNDS

Matthews Emerging Markets Sustainable Future Fund

Portfolio Manager Commentary (unaudited) (continued)

contributors to relative returns. Ecopro BM’s share price rallied on the expectations of a strong pickup in orders from U.S. battery manufacturing capex spend. Shriram continued to deliver strong results and, given its very attractive valuations, the stock performed well. YDUQS recovered well from pandemic-related weakness and as Brazilian interest rates started dropping the market took a more positive view on the company’s reduced debt-servicing burden. Very depressed valuations earlier in the year also helped the stock perform well.

On the other hand, our Chinese positions like Meituan, a leading food delivery company and super-app operator, JD Health International, an online pharmacy and medical services player, and Ginlong Technologies, a manufacturer of solar inverters, were the biggest detractors to relative returns in the year. As markets soured on recovery prospects in consumer sentiment and consumer spending in China, names like Meituan and JD Health were weak. In addition, the market worried about competition within the in-store segment of Meituan from the ecommerce offering of Douyin, ByteDance’s short video platform. We acknowledge the changes in the competitive environment but believe that Meituan will retain a strong market share over the mid-to-long term given its strong value proposition. Our research suggests that Douyin is being used as a medium to bring new customers to the segment and will aid the segment’s overall growth. Ginlong Technologies was weak on account of elevated inventory levels in Europe, a key market for Chinese exporters, as well as expectations of slower growth in Ginlong’s segment in China after a very strong 2023. We expect channel inventory to normalize this year and a meaningful drop in solar module prices in 2023 should spur additional demand.

Notable Portfolio Changes

We initiated a number of new positions in the year, including in Eugene Technology, a South Korean semiconductor fabrication-equipment maker that specializes in deposition gear. In addition to its core expertise in low pressure chemical vapor deposition equipment, Eugene is making strong inroads into atomic layer deposition equipment thereby increasing its addressable market. While the company’s products have largely been used in manufacturing memory products, it is also making progress in the semiconductor foundry manufacturing process which presents an attractive growth opportunity in the future. Among our exits, we sold China Conch Venture Holdings, a company involved in the energy and construction sectors, as we found better use of capital elsewhere.

Outlook

Today, emerging markets contain many companies with solid business models and quality management. In addition, U.S. interest rates are looking downward which should create some macro tailwinds for the coming year. As well as the macro landscape and global trade, our focus in 2024 will be on key emerging markets that are generating robust growth, like India, and those that are challenged, like China, and how they can affect the dynamics of other emerging markets.

Longer term, we expect the emerging markets gross domestic product (GDP) growth-differential with developed markets to improve from a 23-year low reached in 2022. This, alongside relatively attractive valuations, should potentially lend support to better equity performance against developed markets compared with the last decade.

Finally, we view sustainable investing as a synonym for long-term investing. Our approach focuses on investing in companies that are well-positioned to embrace global, multidecadal trends, including addressing critical challenges like climate change and inclusive development. These companies also tend to be good at identifying and proactively addressing long-terms risk to their businesses. Emerging markets, we believe, are a key destination for sustainable investment themes that offer attractive opportunities for alpha generation.



COUNTRY ALLOCATION (%)^6,7
China/Hong Kong			38.4
India			20.3
Taiwan			10.8
South Korea			9.3
Brazil			7.8
United States			3.6
Poland			3.4
Saudi Arabia			2.3
Vietnam			1.5
Romania			1.4
Jordan			1.1
Chile			0.7
Bangladesh			0.6
Estonia			0.5
Liabilities in Excess of Cash and Other Assets			-1.6



SECTOR ALLOCATION (%)⁷
Information Technology			25.2
Financials			21.8
Industrials			16.5
Consumer Discretionary			11.7
Health Care			8.3
Consumer Staples			7.3
Communication Services			5.1
Real Estate			3.6
Utilities			1.2
Materials			0.9
Liabilities in Excess of Cash and Other Assets			-1.6



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			19.6
Large Cap ($10B–$25B)			15.8
Mid Cap ($3B–10B)			42.1
Small Cap (under $3B)			24.2
Liabilities in Excess of Cash and Other Assets			-1.6

6	Not all countries are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


			��	matthewsasia.com \| 800.789.ASIA			17

Matthews Emerging Markets Sustainable Future Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 97.6%


	Shares		Value

CHINA/HONG KONG: 38.4%

Full Truck Alliance Co., Ltd. ADR^b		1,709,825		$11,985,873

JD Health International, Inc.^b,c,d		2,381,900		11,956,538

Meituan Class B^b,c,d		894,900		9,395,357

Legend Biotech Corp. ADR^b		121,387		7,303,856

Airtac International Group		159,000		5,224,444

Lam Research Corp.		6,383		4,999,549

Zhihu, Inc. ADR^b		5,066,065		4,743,863

Contemporary Amperex Technology Co., Ltd. A Shares		189,100		4,332,754

Medlive Technology Co., Ltd.^c,d		3,566,500		3,873,044

Silergy Corp.		201,000		3,262,414

Flat Glass Group Co., Ltd. H Shares		1,803,000		3,043,303

Ginlong Technologies Co., Ltd. A Shares		250,000		2,461,855

Innovent Biologics, Inc.^b,c,d		314,500		1,722,347

Centre Testing International Group Co., Ltd. A Shares		763,100		1,528,404

Hangzhou Tigermed Consulting Co., Ltd. A Shares		154,476		1,190,620

OPT Machine Vision Tech Co., Ltd. A Shares		69,292		1,094,287

Zhejiang HangKe Technology, Inc., Co. A Shares		329,790		1,091,709

Wuxi Biologics Cayman, Inc.^b,c,d		265,500		1,004,188

Hong Kong Exchanges & Clearing, Ltd.		6,200		212,662

Morimatsu International Holdings Co., Ltd.^b,d		101,000		71,166

WuXi XDC Cayman, Inc.^b		2,723		11,159

Total China/Hong Kong				80,509,392



INDIA: 20.3%

Shriram Finance, Ltd.		582,264		14,363,137

Bandhan Bank, Ltd.^c,d		4,712,402		13,656,248

Indus Towers, Ltd.^b		2,218,207		5,301,664

Phoenix Mills, Ltd.		162,227		4,373,118

Mahindra & Mahindra, Ltd.		168,560		3,500,753

UNO Minda, Ltd.		158,078		1,305,224

Marico, Ltd.		15,601		102,799

Total India				42,602,943



TAIWAN: 10.8%

M31 Technology Corp.		144,501		4,974,501

Andes Technology Corp.		270,000		4,214,481

Elite Material Co., Ltd.		335,000		4,160,026

Poya International Co., Ltd.		179,731		3,229,451

AP Memory Technology Corp.		152,000		2,316,643

Formosa Sumco Technology Corp.		335,000		1,836,231

Sporton International, Inc.		233,270		1,830,355

Total Taiwan				22,561,688



BRAZIL: 7.8%

B3 SA - Brasil Bolsa Balcao		2,503,500		7,490,398

YDUQS Participacoes SA		1,551,000		7,152,112

NU Holdings, Ltd. Class A^b		197,234		1,642,959

Total Brazil				16,285,469


	Shares		Value

SOUTH KOREA: 5.3%

Eugene Technology Co., Ltd.		113,940		$3,586,464

Solus Advanced Materials Co., Ltd.		112,938		2,316,832

Ecopro BM Co., Ltd.		9,361		2,076,096

Advanced Nano Products Co., Ltd.		20,219		1,874,537

Samsung SDI Co., Ltd.		3,012		1,096,642

LG Energy Solution, Ltd.^b		419		138,277

Total South Korea				11,088,848



UNITED STATES: 3.6%

Micron Technology, Inc.		87,403		7,458,972

Total United States				7,458,972



POLAND: 3.3%

InPost SA^b		277,627		3,843,880

Jeronimo Martins SGPS SA		124,831		3,177,015

Total Poland				7,020,895



SAUDI ARABIA: 2.3%

Saudi Tadawul Group Holding Co.		98,595		4,825,639

Total Saudi Arabia				4,825,639



VIETNAM: 1.5%

Nam Long Investment Corp.		2,128,939		3,208,861

Total Vietnam				3,208,861



ROMANIA: 1.4%

Banca Transilvania SA		536,864		2,890,504

Total Romania				2,890,504



JORDAN: 1.1%

Hikma Pharmaceuticals PLC		103,971		2,369,196

Total Jordan				2,369,196



CHILE: 0.7%

Aguas Andinas SA Class A		4,569,644		1,476,170

Total Chile				1,476,170



BANGLADESH: 0.6%

BRAC Bank PLC		2,248,844		686,435

GrameenPhone, Ltd.		227,236		541,640

Total Bangladesh				1,228,075



ESTONIA: 0.5%

Enefit Green AS		270,590		1,062,240

Total Estonia				1,062,240



TOTAL COMMON EQUITIES				204,588,892

(Cost $191,206,901)


18		MATTHEWS ASIA FUNDS

Matthews Emerging Markets Sustainable Future Fund

December 31, 2023

Schedule of Investments^a (continued)

PREFERRED EQUITIES: 4.0%


	Shares		Value

SOUTH KOREA: 4.0%

Samsung SDI Co., Ltd., Pfd.		44,134		$8,392,916

Total South Korea				8,392,916



TOTAL PREFERRED EQUITIES				8,392,916

(Cost $ 11,686,259)


TOTAL INVESTMENTS: 101.6%				212,981,808
(Cost $ 202,893,160)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (1.6%)				(3,456,721	)



NET ASSETS: 100.0%				$209,525,087

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

Pfd.

Preferred

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			19

LOGO


PORTFOLIO MANAGERS

Vivek Tanneeru
Lead Manager

Jeremy Sutch, CFA	Alex Zarechnak
Co-Manager	Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MSMLX	MISMX
CUSIP	577125206	577125867
Inception	9/15/08	4/30/13
NAV	$25.52	$25.49
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.49%	1.38%
After Fee Waiver and Reimbursement²	1.34%	1.15%
Portfolio Statistics
Total # of Positions		78
Net Assets		$615.4 million
Weighted Average Market Cap		$4.0 billion
Portfolio Turnover³		26.9%
Benchmark
MSCI Emerging Markets Small Cap Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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 Small Companies located in emerging market countries. Emerging market countries generally include every country in the world except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. The Fund defines Small Companies as companies with market capitalization no higher than the greater of $5 billion or the market capitalization of the largest company included in the Fund’s primary benchmark, the MSCI Emerging Markets Small Cap Index.

Matthews Emerging Markets Small Companies Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Emerging Markets Small Companies Fund returned 19.88% (Investor Class) and 20.12% (Institutional Class), while its benchmark, the MSCI Emerging Markets Small Cap Index, returned 24.49% over the same period. For the fourth quarter, the Fund returned 5.40% (Investor Class) and 5.47% (Institutional Class), while the benchmark returned 9.05%.

Market Environment

Hungary was the best-performing emerging market in the benchmark index during 2023, followed by Poland, Egypt and Greece, while larger markets like South Korea, Brazil and India and Mexico delivered robust returns. China/Hong Kong was the worst-performer followed by Thailand and Kuwait. From a sector perspective, information technology (IT) was the top performer, supported by market exuberance over advancements in commercial artificial intelligence (AI), while consumer discretionary and real estate were the worst performers, impacted in part by China’s challenges in these sectors.

Performance Contributors and Detractors

From a country perspective, stock selection in South Korea was the top contributor to total and relative returns. Stock selection in Brazil and an underweight in Thailand also contributed. On the flip side, an overweight to China/Hong Kong was by far the biggest detractor to total and relative returns in the period. As the year progressed, markets grew more pessimistic about the prospects of China’s economic recovery, for a turnaround in its real estate sector and for an improvement in consumer sentiment. In our view, the MSCI Emerging Markets Small Cap Index has a much smaller allocation to China than is warranted as it doesn’t have mainland A-shares representation, and this accounts for the bulk of the small-cap investment universe in China. An underweight and stock selection in India also impacted relative performance.

(continued)

1	Actual 2023 expense ratios.

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 1.15% 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 (e.g., custody fees) 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 1.15% 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 1.15%. If the operating expenses fall below the expense limitation 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, 2025 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

3	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


20		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MSMLX)⁴		5.40%		19.88%		6.79%		15.48%		8.13%		11.16%			09/15/08
Institutional Class (MISMX)⁴		5.47%		20.12%		7.00%		15.71%		8.36%		7.82%			04/30/13
MSCI Emerging Markets Small Cap Index⁵		9.05%		24.49%		6.99%		10.41%		5.74%		7.23%	⁶

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Before April 30, 2021, the Fund was managed with a different investment strategy and may have achieved different performance results for periods before that date with its current investment strategy.

Calculated from 9/15/08.



TOP TEN HOLDINGS⁷
Name	Sector	Country	% Net Assets
Shriram Finance, Ltd.	Financials	India		6.1%
Bandhan Bank, Ltd.	Financials	India		5.9%
Full Truck Alliance Co., Ltd.	Industrials	China/Hong Kong		3.6%
Legend Biotech Corp.	Health Care	China/Hong Kong		3.1%
YDUQS Participacoes SA	Consumer Discretionary	Brazil		3.0%
Hugel, Inc.	Health Care	South Korea		3.0%
Vamos Locacao de Caminhoes Maquinas e Equipamentos SA	Industrials	Brazil		3.0%
Phoenix Mills, Ltd.	Real Estate	India		2.8%
Silergy Corp.	Information Technology	China/Hong Kong		2.7%
Airtac International Group	Industrials	China/Hong Kong		2.7%
% OF ASSETS IN TOP 10				35.9%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			21

Matthews Emerging Markets Small Companies Fund

Portfolio Manager Commentary (unaudited) (continued)

At the sector level, stock selection in consumer discretionary, an underweight and stock selection in consumer staples and an overweight and stock selection in financials contributed to returns. In contrast, stock selection in industrials, IT and communication services were the biggest detractors to relative returns.

From a holdings perspective, Ecopro BM, a South Korean cathode maker, Shriram Finance, an Indian financial services provider, and YDUQS, a Brazilian on-campus and distance-learning education company, were among the top contributors to relative returns. Ecopro BM’s share price rallied on the expectations of a strong pickup in orders from U.S. battery manufacturing capex spend. Shriram continued to deliver strong results and, given its very attractive valuations, the stock performed well. YDUQS recovered well from pandemic-related weakness and as Brazilian interest rates started dropping, the market took a more positive view on the company’s reduced debt-servicing burden. Very depressed valuations earlier in the year also helped the stock perform well.

On the other hand, China consumption-oriented names such as Hainan Meilan International Airport Co., Beijing Capital International Airport Co. and Xtep International, a sporting goods company, were among the biggest detractors to relative returns in the year. The Chinese airport operators were weak on the back of reduced expectations of a rebound in consumption broadly, and in air travel services, in particular, as 2023 progressed. We remain positive on the longer-term outlook for international travel in the case of Beijing Capital International Airport and for domestic tourist arrivals in the case of Hainan Meilan, despite near-term headwinds as people tilt their travel budgets internationally.

Notable Portfolio Changes

In 2023, we participated in the initial public offering (IPO) of Wuxi XDC. The company is an affiliate of Wuxi Biologics, a leading Chinese contract, development and manufacturing entity. XDC specializes in bioconjugates, including anti-body drug conjugates, a promising area of growth within the biotech industry globally. Among our exits, we sold Lemon Tree, an Indian mid-market hotel chain operator, to take profits, and sold our position in Bank Tabungan Negara in Indonesia to deploy capital elsewhere.

Outlook

We believe small companies in emerging markets offer long-term growth opportunities given their innovation and domestic consumption orientation while also being less exposed to regulatory and geo-political risks. We continue to find quality businesses at attractive valuations in this asset class.



COUNTRY ALLOCATION (%)^8,9
China/Hong Kong			28.7
India			23.8
Taiwan			11.6
Brazil			11.2
South Korea			7.2
Vietnam			4.5
Chile			3.5
Philippines			2.3
Saudi Arabia			1.7
Poland			1.6
Indonesia			1.5
Thailand			0.9
Turkey			0.6
Bangladesh			0.5
United Arab Emirates			0.2
Mexico			0.1
Liabilities in Excess of Cash and Other Assets			-0.1



SECTOR ALLOCATION (%)⁹
Industrials			23.8
Information Technology			18.4
Financials			18.2
Consumer Discretionary			16.8
Health Care			10.9
Real Estate			5.9
Communication Services			2.1
Consumer Staples			1.7
Materials			1.5
Utilities			0.7
Liabilities in Excess of Cash and Other Assets			-0.1



MARKET CAP EXPOSURE (%)^9,10
Mega Cap (over $25B)			0.0
Large Cap ($10B–$25B)			5.3
Mid Cap ($3B–10B)			43.5
Small Cap (under $3B)			51.3
Liabilities in Excess of Cash and Other Assets			-0.1

8	Not all countries where the Fund may invest are included in the benchmark index.

9	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

10	The Fund defines Small Companies as companies with market capitalization no higher than the greater of $5 billion or the market capitalization of the largest company included in the Fund’s primary benchmark, the MSCI Emerging Markets Small Cap Index.


22		MATTHEWS ASIA FUNDS

Matthews Emerging Markets Small Companies Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 98.4%


	Shares		Value

CHINA/HONG KONG: 28.8%

Full Truck Alliance Co., Ltd. ADR^b		3,126,745		$21,918,483

Legend Biotech Corp. ADR^b		313,990		18,892,778

Silergy Corp.		1,041,000		16,896,381

Airtac International Group		513,431		16,870,388

Zhihu, Inc. ADR^b		14,037,152		13,144,389

Medlive Technology Co., Ltd.^c,d		9,906,500		10,757,973

Tongcheng Travel Holdings, Ltd.^b,d		4,496,400		8,327,555

Flat Glass Group Co., Ltd. H Shares		4,651,000		7,850,472

Beijing Capital International Airport Co., Ltd. H Shares^b		22,956,000		6,735,144

Peijia Medical, Ltd.^b,c,d		6,897,000		6,530,152

SITC International Holdings Co., Ltd.		3,741,000		6,457,077

Xtep International Holdings, Ltd.		9,415,000		5,322,233

Hongfa Technology Co., Ltd. A Shares		1,257,400		4,875,869

Ginlong Technologies Co., Ltd. A Shares		491,906		4,844,006

Hainan Meilan International Airport Co., Ltd. H Shares^b		5,154,000		4,581,836

Innovent Biologics, Inc.^b,c,d		665,000		3,641,847

Centre Testing International Group Co., Ltd. A Shares		1,687,838		3,380,550

AK Medical Holdings, Ltd.^c,d		4,164,000		3,339,973

OPT Machine Vision Tech Co., Ltd. A Shares		192,758		3,044,111

Morimatsu International Holdings Co., Ltd.^b,d		3,455,000		2,434,432

Zhejiang HangKe Technology, Inc. Co. A Shares		730,855		2,408,002

Centre Testing International Group Co., Ltd. A Shares		849,674		1,693,813

CIFI Ever Sunshine Services Group, Ltd.^d		8,690,000		1,612,828

Ginlong Technologies Co., Ltd. A Shares		160,210		1,570,250

WuXi XDC Cayman, Inc.^b		7,000		28,687

Total China/Hong Kong				177,159,229



INDIA: 23.8%

Shriram Finance, Ltd.		1,523,189		37,573,629

Bandhan Bank, Ltd.^c,d		12,424,114		36,004,309

Phoenix Mills, Ltd.		639,888		17,249,324

Finolex Cables, Ltd.		796,105		10,220,040

Radico Khaitan, Ltd.		479,542		9,552,752

UNO Minda, Ltd.		849,342		7,012,875

Barbeque Nation Hospitality, Ltd.^b		869,881		6,980,627

Cartrade Tech, Ltd.^b		686,900		5,887,714

Hindware Home Innovation, Ltd.		955,695		5,841,540

Rainbow Children’s Medicare, Ltd.		373,662		5,354,290

HEG, Ltd.		148,778		3,410,442

Marico, Ltd.		180,593		1,189,970

Total India				146,277,512



TAIWAN: 11.6%

M31 Technology Corp.		422,702		14,551,674

Andes Technology Corp.		670,000		10,458,157

Elite Material Co., Ltd.		717,000		8,903,698

Poya International Co., Ltd.		443,506		7,969,026

Wiwynn Corp.		124,000		7,342,105

AP Memory Technology Corp.		413,000		6,294,562

Yageo Corp.		313,124		6,080,067

ASPEED Technology, Inc.		59,000		5,976,756


	Shares		Value

Formosa Sumco Technology Corp.		717,000		$3,930,081

Total Taiwan				71,506,126



BRAZIL: 9.5%

YDUQS Participacoes SA		3,999,800		18,444,239

Vamos Locacao de Caminhoes Maquinas e Equipamentos SA		8,841,400		18,312,948

Grupo SBF SA		5,756,300		13,913,300

Vivara Participacoes SA		1,094,700		7,711,516

Total Brazil				58,382,003



SOUTH KOREA: 7.2%

Hugel, Inc.^b		159,015		18,400,290

Eugene Technology Co., Ltd.		322,474		10,150,443

Ecopro BM Co., Ltd.		29,582		6,560,738

Advanced Nano Products Co., Ltd.		55,306		5,127,512

Solus Advanced Materials Co., Ltd.		212,553		4,360,354

Total South Korea				44,599,337



VIETNAM: 4.5%

Military Commercial Joint Stock Bank		12,076,780		9,274,044

FPT Corp.		1,942,023		7,686,058

Mobile World Investment Corp.		4,127,314		7,273,249

Nam Long Investment Corp.		2,341,132		3,528,691

Total Vietnam				27,762,042



CHILE: 3.5%

Parque Arauco SA		6,371,494		10,269,488

Lundin Mining Corp.		524,400		4,290,024

Aguas Andinas SA Class A		12,481,194		4,031,904

Banco de Credito e Inversiones SA		112,516		3,045,943

Total Chile				21,637,359



PHILIPPINES: 2.3%

GT Capital Holdings, Inc.		816,350		8,699,805

Cebu Air, Inc.^b		9,407,700		5,521,449

Total Philippines				14,221,254



SAUDI ARABIA: 1.7%

Saudi Tadawul Group Holding Co.		215,643		10,554,444

Total Saudi Arabia				10,554,444



POLAND: 1.6%

InPost SA^b		728,499		10,086,420

Total Poland				10,086,420



INDONESIA: 1.5%

PT Mitra Adiperkasa Tbk		46,599,000		5,417,671

PT Summarecon Agung Tbk		95,466,216		3,564,971

Total Indonesia				8,982,642



THAILAND: 0.9%

Siam Wellness Group Public Co., Ltd. F Shares^b		16,919,000		5,698,550

Total Thailand				5,698,550


				matthewsasia.com \| 800.789.ASIA			23

Matthews Emerging Markets Small Companies Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value

TURKEY: 0.6%

Ford Otomotiv Sanayi AS		139,426		$3,498,809

Total Turkey				3,498,809



BANGLADESH: 0.5%

BRAC Bank PLC		9,319,571		2,844,698

Total Bangladesh				2,844,698



UNITED ARAB EMIRATES: 0.3%

Network International Holdings PLC^b,c,d		308,065		1,530,647

Total United Arab Emirates				1,530,647



MEXICO: 0.1%

Banco del Bajio SA^c,d		187,400		626,837

Total Mexico				626,837



RUSSIA: 0.0%

Moscow Exchange MICEX-RTS PJSC^e		2,101,250		23,544

TCS Group Holding PLC GDR^b,d,e		62,962		1,259

HeadHunter Group PLC ADR^e		15,800		316

Total Russia				25,119



TOTAL COMMON EQUITIES				605,393,028

(Cost $550,896,494)


PREFERRED EQUITIES: 1.7%

BRAZIL: 1.7%
Banco Pan SA, Pfd.		5,859,800		10,419,851

Total Brazil				10,419,851



TOTAL PREFERRED EQUITIES				10,419,851

(Cost $8,927,482)


TOTAL INVESTMENTS: 100.1%				615,812,879
(Cost $559,823,976)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (0.1%)				(415,232	)



NET ASSETS: 100.0%				$615,397,647

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

e	Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. The aggregate value of Level 3 securities is $25,119 and 0.00% of net assets.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

Pfd.

Preferred

PJSC	Public Joint Stock Co.

See accompanying notes to financial statements.


24		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Michael J. Oh, CFA
Lead Manager

Peeyush Mittal, CFA	Shuntaro Takeuchi
Co-Manager	Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MPACX	MIAPX
CUSIP	577130867	577130776
Inception	10/31/03	10/29/10
NAV	$21.19	$21.46
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.13%	0.98%
Portfolio Statistics
Total # of Positions		54
Net Assets		$371.3 million
Weighted Average Market Cap		$128.3 billion
Portfolio Turnover²		77.3%
Benchmark
MSCI AC Asia Pacific Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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. Asia consists of all countries and markets in Asia, and includes developed, emerging and frontier countries and markets in the Asian region. The Fund may also invest in the convertible securities, of any duration or quality, of Asian companies.

Matthews Asia Growth Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Asia Growth Fund returned 3.53% (Investor Class) and 3.69% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 11.81% over the same period. For the fourth quarter, the Fund returned 8.32% (Investor Class) and 8.31% (Institutional Class), while the benchmark returned 8.00%.

Market Environment

2023 was challenging on many levels for Asia equity markets. At the macro level, rising interest rates and a strong U.S. dollar were headwinds for the region. Growth companies were out of favor while value companies outperformed. Geopolitical tensions between the U.S. and China also remained elevated, particularly in the first half, and we expect these tensions to continue. The most notable feature, however, was the prolonged weakness of the Chinese economy. The rapid post-COVID recovery that many investors expected didn’t materialize and the country instead struggled with a lack of confidence and problems in specific sectors like real estate. Mitigating China’s woes somewhat was India’s continued resilient growth, supported in part by its domestic infrastructure programs and increasing global trade. Information technology (IT) was the largest contributor to returns in the region, while communication services was among the laggards. Toward the end of the year, there was a general consensus that inflation had peaked in the global economy and that the U.S. Federal Reserve would pivot toward cutting rates in 2024 and the dollar would weaken. This provided some tailwinds across the region in the final quarter of 2023.

Performance Contributors and Detractors

Regionally, our stock selection in Indonesia, our underweight allocation to Thailand and zero exposure to Malaysia contributed the most to relative returns in 2023. On the other hand, our overweight and stock selection in China/Hong Kong was the biggest detractor to relative returns in the year. Our exposure was hurt by the much slower-than-expected recovery in China, international concerns over geopolitical risks, and regulatory uncertainties related to technology companies.

At the sector level, stock selection in financials and materials contributed the most to relative returns. In contrast, our overweight allocation to and stock selection within health care as well as consumer discretionary detracted the most from relative performance for the year.

On a company basis, Disco Corp. contributed the most to absolute and relative returns. Disco provides cutting and grinding tools to the semiconductor industry. The company benefited from the strength in the broader IT sector and growth in areas such as power semiconductors. We believe Disco is well positioned to benefit from growing demand from the artificial intelligence (AI) industry. On the other hand, JD.com, China’s leading e-commerce platform company, was one of the top detractors to absolute and relative returns. JD.com has been losing share to Pinduoduo (PDD) as more consumers seek better value for money. Additionally, the company has generated concerns overs its growth prospects and has been weighed down by China’s muted recovery.

Notable Portfolio Changes

We have reduced our exposure to China while increasing our exposure to companies based in Japan. China’s lack of meaningful stimulus is hurting sentiment and

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			25



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MPACX)		8.32%		3.53%		-16.08%		1.82%		2.72%		6.59%			10/31/03
Institutional Class (MIAPX)		8.31%		3.69%		-15.95%		1.98%		2.89%		4.02%			10/29/10
MSCI AC Asia Pacific Index³		8.00%		11.81%		-2.82%		5.70%		4.60%		6.26%	⁴

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 10/31/03.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		5.6%
Shin-Etsu Chemical Co., Ltd.	Materials	Japan		4.4%
Keyence Corp.	Information Technology	Japan		4.2%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		4.1%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		3.6%
Japan Elevator Service Holdings Co., Ltd.	Industrials	Japan		3.6%
Disco Corp.	Information Technology	Japan		3.5%
Bajaj Finance, Ltd.	Financials	India		3.4%
Axis Bank, Ltd.	Financials	India		3.4%
Hitachi, Ltd.	Industrials	Japan		3.1%
% OF ASSETS IN TOP 10				38.9%

Holdings may combine more than one security from same issuer and related depositary receipts.


26		MATTHEWS ASIA FUNDS



COUNTRY ALLOCATION (%)^6,7
Japan			36.8
India			18.2
China/Hong Kong			17.1
Taiwan			9.1
South Korea			4.7
Indonesia			4.1
United States			3.1
Australia			2.5
Philippines			1.5
Thailand			1.2
Netherlands			1.2
Cash and other Assets, Less Liabilities			0.5



SECTOR ALLOCATION (%)⁷
Information Technology			26.3
Consumer Discretionary			23.5
Financials			20.5
Industrials			11.1
Health Care			8.2
Materials			5.8
Communication Services			2.4
Consumer Staples			1.1
Energy			0.5
Cash and other Assets, Less Liabilities			0.5



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			68.8
Large Cap ($10B–$25B)			8.3
Mid Cap ($3B–10B)			13.5
Small Cap (under $3B)			8.9
Cash and Other Assets, Less Liabilities			0.5

6	Not all countries where the Fund may invest are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Asia Growth Fund

Portfolio Manager Commentary (unaudited) (continued)

the post-COVID recovery has been much slower than expected. Increased regulatory risk in China was another consideration for reducing our exposure to China. In the fourth quarter, we also closed our positions in Chinese health-care companies such as Wuxi Biologics and Hangzhou Tigermed Consulting. Japan’s economy is doing well with the influx of tourists as most countries lift their COVID restrictions. We have also narrowed the portfolio’s underweight position in South Korea and Taiwan as we believe the two countries will benefit from the expansion of AI. We also increased our exposure to India as we think the country is well positioned since it isn’t facing the kind of challenges that China is facing.

Outlook

Overall we’re optimistic for 2024. We pivoted during the last quarter of the year to adjust the country weightings in the portfolio to address on-going evolution in the region. China remains challenging. We believe the government is not making necessary reforms to improve its domestic economy and unless we see a firm change in policies and an improvement in the regulatory environment we will maintain a cautious view on the Chinese equity market.

In contrast, we are optimistic on India. It doesn’t have the same issues that have negatively impacted the Chinese market and, in many ways, India has the potential to replicate the success that China has had in the past 20 years. Valuations, however, remain elevated and we will be very selective in picking our investments. Japan overall continues to enjoy several tailwinds including a positive earnings cycle driven by moderate inflation, meaningful wage gains and policy driven reforms which are pushing companies to increase their corporate value via capital efficiencies and shareholder payouts.

More generally, the semiconductor industry is passing the bottom of the cycle and Asia maintains its leading edge when it comes to the foundry and the memory segments which are the backbone of the global industry. The consumer market in Asia also remains the largest and fastest growing market in the world and provides a great foundation for innovation and entrepreneurship to flourish.


				matthewsasia.com \| 800.789.ASIA			27

Matthews Asia Growth Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 99.5%


	Shares		Value

JAPAN: 36.8%

Shin-Etsu Chemical Co., Ltd.		391,700		$16,382,134

Keyence Corp.		35,900		15,772,897

Japan Elevator Service Holdings Co., Ltd.		797,000		13,181,915

Disco Corp.		52,800		13,039,848

Hitachi, Ltd.		161,500		11,616,652

Sumitomo Mitsui Financial Group, Inc.		210,000		10,218,567

Sony Group Corp.		79,900		7,561,170

Kyoritsu Maintenance Co., Ltd.		165,500		7,018,803

SHIFT, Inc.^b		24,600		6,230,778

ORIX Corp.		329,800		6,194,035

Toyota Motor Corp.		309,300		5,667,526

Daiichi Sankyo Co., Ltd.		202,000		5,530,099

KeePer Technical Laboratory Co., Ltd.		107,100		5,282,074

ZOZO, Inc.		215,200		4,856,878

Recruit Holdings Co., Ltd.		103,600		4,331,634

giftee, Inc.^b		282,800		3,629,930

Total Japan				136,514,940



INDIA: 18.2%

Bajaj Finance, Ltd.		145,505		12,803,181

Axis Bank, Ltd.		943,078		12,481,047

Mahindra & Mahindra, Ltd.		551,953		11,463,285

HDFC Bank, Ltd.		558,692		11,439,790

Zomato, Ltd.^b		3,041,760		4,514,820

Sona Blw Precision Forgings, Ltd.^c,d		563,090		4,358,005

Godrej Consumer Products, Ltd.		293,758		3,991,841

Maruti Suzuki India, Ltd.		30,045		3,717,484

Cummins India, Ltd.		115,894		2,733,720

Total India				67,503,173



CHINA/HONG KONG: 17.2%

PDD Holdings, Inc. ADR^b		62,798		9,187,975

AIA Group, Ltd.		862,800		7,508,847

Innovent Biologics, Inc.^b,c,d		1,067,500		5,846,123

Alibaba Group Holding, Ltd.		579,900		5,585,912

Legend Biotech Corp. ADR^b		91,369		5,497,673

Tencent Holdings, Ltd.		136,700		5,161,091

Contemporary Amperex Technology Co., Ltd. A Shares		169,568		3,885,227

BeiGene, Ltd. ADR^b		20,902		3,769,885

Shenzhen Inovance Technology Co., Ltd. A Shares		421,674		3,738,333

Meituan Class B^b,c,d		353,500		3,711,318

Trip.com Group, Ltd. ADR^b		82,043		2,954,368

MINISO Group Holding, Ltd. ADR		137,274		2,800,390

WuXi XDC Cayman, Inc.^b		539,676		2,211,645

Full Truck Alliance Co., Ltd. ADR^b		269,955		1,892,385

Total China/Hong Kong				63,751,172



TAIWAN: 9.1%

Taiwan Semiconductor Manufacturing Co., Ltd. ADR		102,841		10,695,464

Taiwan Semiconductor Manufacturing Co., Ltd.		522,000		10,007,550

Alchip Technologies, Ltd.		49,000		5,206,659

Unimicron Technology Corp.		674,000		3,850,897


	Shares		Value

Makalot Industrial Co., Ltd.		333,000		$3,840,555

Total Taiwan				33,601,125



SOUTH KOREA: 4.7%

Samsung Electronics Co., Ltd.		222,749		13,520,160

SK Hynix, Inc.		34,869		3,805,532

Total South Korea				17,325,692



INDONESIA: 4.1%

PT Bank Rakyat Indonesia Persero Tbk		41,400,600		15,387,273

Total Indonesia				15,387,273



UNITED STATES: 3.0%

NVIDIA Corp.		15,227		7,540,715

Applied Materials, Inc.		23,343		3,783,200

Total United States				11,323,915



AUSTRALIA: 2.5%

CSL, Ltd.		38,354		7,477,078

Woodside Energy Group, Ltd.		91,823		1,938,992

Total Australia				9,416,070



PHILIPPINES: 1.5%

Jollibee Foods Corp.		1,255,420		5,697,364

Total Philippines				5,697,364



THAILAND: 1.2%

Central Retail Corp. Public Co., Ltd.		3,747,800		4,458,492

Total Thailand				4,458,492



NETHERLANDS: 1.2%
ASML Holding NV		5,682		4,300,820

Total Netherlands				4,300,820



TOTAL INVESTMENTS: 99.5%				369,280,036

(Cost $317,906,277)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.5%				1,992,679



NET ASSETS: 100.0%				$371,272,715

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


28		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Sean Taylor	Inbok Song
Lead Manager	Lead Manager

Winnie Chwang	Andrew Mattock, CFA
Co-Manager	Co-Manager

Peeyush Mittal, CFA	Jeremy Sutch, CFA
Co-Manager	Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MAPTX	MIPTX
CUSIP	577130107	577130834
Inception	9/12/94	10/29/10
NAV	$18.62	$18.61
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.12%	0.99%
After Fee Waiver and Reimbursement²	1.12%	0.98%
Portfolio Statistics
Total # of Positions		51
Net Assets		$1.93 billion
Weighted Average Market Cap		$144.3 billion
Portfolio Turnover³		14.8%
Benchmark
MSCI AC Asia ex Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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.

Matthews Pacific Tiger Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Pacific Tiger Fund returned -4.87% (Investor Class) and -4.75% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 6.34% over the same period. For the fourth quarter, the Fund returned 1.85% (Investor Class) and 1.87% (Institutional Class), while the benchmark returned 6.48%.

Market Environment

The environment in 2023 was challenging especially for China. The market in China started with the hope of a strong recovery in the economy. This turned out to be short lived, leading to an adverse backdrop for the rest of the year. Earnings in the China universe adjusted down sequentially during 2023 and together with a challenging external environment, geopolitical tensions and slow policy reactions, this led to a valuation derating in China’s equity market. Elsewhere in the region, India was a strong performer, benefiting from domestic capital flows and sustained earnings delivery after reopening from pandemic lockdowns. Earnings delivery was widespread across several sectors such as financials, consumers and industrials. Though the South Korea and Taiwan markets started with concern over the demand environment and inventory digestion cycle, the technology heavy sectors in both countries performed well with the emergence of secular growth drivers such as data, artificial intelligence (AI) and batteries for electric vehicles (EVs). Therefore, those sectors in the two countries experienced a valuation re-rating.

Performance Contributors and Detractors

At the country level, stock selection in China/Hong Kong detracted the most from total and relative returns in 2023. China’s economic recovery has been weaker-than-expected and this resulted in earnings downgrades across sectors, especially consumer and industrials. Consequently, consumer discretionary stocks were derated followed by consumer staples, both of which affected the portfolio’s stock selection negatively. Stock selection in India and the Philippines also detracted from relative performance. At the sector level, stock selection in consumer discretionary was the largest detractor to relative returns while an overweight and stock selection in consumer staples as well as stock selection in industrials also detracted. On the other hand, stock selection in Taiwan and Indonesia contributed the most to relative returns for the year. At the sector level, information technology (IT) contributed the most to the Fund’s total return for the year.

Among individual holdings, JD.com, China’s leading e-commerce platform company, and pharmaceutical company Wuxi Biologics were notable detractors. Weak consumer sentiment as well as increasing competition in the e-commerce industry slowed down JD’s sales growth meaningfully. While the company achieved good cost controls leading to faster earnings growth, its slower revenue growth materially dragged valuation multiples down. Wuxi Biologics, which provides contract development and manufacturing services, experienced a slowdown of its earnings growth due to insufficient COVID-related manufacturing as well as slower development projects from the tight biotechnology funding environment.

Conversely, Accton Technology, a networking equipment provider in Taiwan, and Titan Company, India’s leading jeweler, were two notable contributors to the

(continued)

1	Actual 2023 expense ratios.

3	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			29



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MAPTX)		1.85%		-4.87%		-10.34%		0.56%		3.49%		7.01%			9/12/94
Institutional Class (MIPTX)		1.87%		-4.75%		-10.22%		0.69%		3.65%		3.67%			10/29/10
MSCI AC Asia ex Japan Index⁴		6.48%		6.34%		-6.43%		4.01%		4.17%		4.13%	⁵

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 8/31/94.



TOP TEN HOLDINGS⁶
Name	Sector	Country	% Net Assets
Samsung Electronics Co., Ltd.	Information Technology	South Korea		9.2%
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		9.1%
Tencent Holdings, Ltd.	Communication Services	China/Hong Kong		5.2%
ICICI Bank, Ltd.	Financials	India		3.6%
Central Pattana Public Co., Ltd.	Real Estate	Thailand		3.4%
Titan Co., Ltd.	Consumer Discretionary	India		3.2%
HDFC Bank, Ltd.	Financials	India		3.0%
Alibaba Group Holding, Ltd.	Consumer Discretionary	China/Hong Kong		2.9%
Tata Consultancy Services, Ltd.	Information Technology	India		2.9%
PT Bank Central Asia Tbk	Financials	Indonesia		2.8%
% OF ASSETS IN TOP 10				45.3%

Holdings may combine more than one security from same issuer and related depositary receipts.


30		MATTHEWS ASIA FUNDS

Matthews Pacific Tiger Fund

Portfolio Manager Commentary (unaudited) (continued)

Fund’s overall performance. As supply disruption normalized into 2023, Accton Technology started to deliver its orders on schedule. Additionally, demand for its service has been robust due to customer’s datacenter upgrades. Titan Company continued to deliver resilient earnings growth and brand value, a reflection of the robust consumption environment in India. While Titan’s valuation has been at the high end of the range compared to other consumer companies in India, its category expansion and consistent execution has provided strong earnings visibility.

Notable Portfolio Changes

We continue to seek to capture the growing investment opportunities in Asia while assessing risks, especially when they are reflected in valuations. We added new positions from India given the country’s growth prospects remain robust and more structural, leading to broader investment opportunities. Tata Consumer Products, a leading beverage-focused fast-moving consumer goods company, is a good example of the increasing demand for premium products in India. We also added Taiwanese company ASE Technology, a globally leading back-end packing supplier, as secular demand for AI and data processing-related semiconductors continue to require high-end manufacturing.

Outlook

Ambiguities remain in the outlook for the global economy including Asian countries. China continues to deal with challenges in its property market and weak consumer sentiment. South Korea and Taiwan are going through the uncertainties of global demand and the inventory digestion cycle. In India, a long-subdued CapEx cycle has restarted, and overall consumer demand has recovered though there are still urban and rural consumer divergences. At the global macro level, the U.S. Federal Reserve’s interest rate policy remains on an uncertain path and related changes in market expectations are causing volatility in equities.

However, Asia ex Japan valuations are favorably positioned at around 12 x FY24 earnings with EPS growth expected to be over 19% for the year. While earnings downgrade risks remain, we believe that, fundamentally, the Asia ex Japan region has many companies with earnings generation power. We continue to focus on keeping the portfolio invested in companies demonstrating durable earnings growth combined with reasonable valuations in this uncertain environment.



COUNTRY ALLOCATION (%)^7,8
China/Hong Kong			35.0
India			20.2
Taiwan			18.9
South Korea			14.3
Thailand			3.4
Vietnam			3.4
Indonesia			2.8
Philippines			2.1
Singapore			1.5
Liabilities in Excess of Cash and Other Assets			-1.7



SECTOR ALLOCATION (%)⁸
Information Technology			29.2
Financials			18.5
Consumer Discretionary			11.3
Communication Services			9.9
Consumer Staples			9.5
Real Estate			9.2
Industrials			6.1
Materials			3.5
Utilities			2.8
Health Care			1.8
Liabilities in Excess of Cash and Other Assets			-1.7



MARKET CAP EXPOSURE (%)⁸
Mega Cap (over $25B)			64.5
Large Cap ($10B–$25B)			17.6
Mid Cap ($3B–10B)			19.6
Small Cap (under $3B)
Liabilities in Excess of Cash and Other Assets			-1.7

7	Not all countries where the Fund may invest are included in the benchmark index.

8	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


				matthewsasia.com \| 800.789.ASIA			31

Matthews Pacific Tiger Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 101.7%


	Shares		Value

CHINA/HONG KONG: 35.1%
Tencent Holdings, Ltd.		2,667,200		$100,699,798

Alibaba Group Holding, Ltd.		5,902,400		56,855,120

Kweichow Moutai Co., Ltd. A Shares		201,173		48,740,083

CITIC Securities Co., Ltd. H Shares		21,783,100		44,505,823

KE Holdings, Inc. ADR		2,700,419		43,773,792

AIA Group, Ltd.		4,553,400		39,627,705

Shenzhen Inovance Technology Co., Ltd. A Shares		3,935,185		34,887,221

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		830,320		33,887,307

Hong Kong Exchanges & Clearing, Ltd.		884,800		30,348,869

Yum China Holdings, Inc.		710,222		30,134,719

China Resources Beer Holdings Co., Ltd.		6,727,775		29,521,111

China Resources Mixc Lifestyle Services, Ltd.^b,c		7,767,030		27,702,430

Will Semiconductor Co., Ltd. Shanghai A Shares		1,390,672		20,824,661

ENN Energy Holdings, Ltd.		2,521,600		18,620,623

Contemporary Amperex Technology Co., Ltd. A Shares		789,579		18,091,230

Shandong Sinocera Functional Material Co., Ltd. A Shares		5,187,828		16,832,713

Kuaishou Technology^b,c,d		2,306,700		15,695,305

Meituan Class B^b,c,d		1,466,960		15,401,288

Tencent Music Entertainment Group ADR^d		1,699,698		15,314,279

Kanzhun, Ltd. ADR		914,747		15,193,948

China Tourism Group Duty Free Corp., Ltd. A Shares		1,225,473		14,397,697

StarPower Semiconductor, Ltd. A Shares		213,489		5,445,707

WuXi XDC Cayman, Inc.^d		12,289		50,362

Total China/Hong Kong				676,551,791



INDIA: 20.2%

ICICI Bank, Ltd.		5,872,793		70,178,693

Titan Co., Ltd.		1,399,682		61,777,762

HDFC Bank, Ltd.		2,870,830		58,783,177

Tata Consultancy Services, Ltd.		1,240,154		56,481,448

Pidilite Industries, Ltd.		1,546,251		50,423,388

Tata Power Co., Ltd.		8,868,941		35,364,842

Ashok Leyland, Ltd.		13,904,624		30,314,517

Mahindra & Mahindra, Ltd.		749,511		15,566,286

Tata Consumer Products, Ltd.		800,575		10,450,473

Total India				389,340,586



TAIWAN: 18.9%

Taiwan Semiconductor Manufacturing Co., Ltd.		9,123,000		174,902,065

E Ink Holdings, Inc.		4,799,000		30,728,174

Chailease Holding Co., Ltd.		4,783,982		30,061,332

MediaTek, Inc.		874,000		28,859,395

Eclat Textile Co., Ltd.		1,353,000		24,726,116

Delta Electronics, Inc.		2,387,182		24,345,511

Uni-President Enterprises Corp.		9,367,000		22,725,585

Accton Technology Corp.		1,275,000		21,670,912

ASE Technology Holding Co., Ltd.		1,452,000		6,363,011

Total Taiwan				364,382,101


	Shares		Value

SOUTH KOREA: 14.3%

Samsung Electronics Co., Ltd.		2,913,546		$176,843,039

NAVER Corp.		254,711		44,070,192

Samsung Engineering Co., Ltd.^d		1,525,476		34,172,613

Orion Corp.		240,146		21,550,732

Total South Korea				276,636,576



VIETNAM: 3.4%

Vietnam Dairy Products JSC		17,993,828		50,092,730

FPT Corp.		4,074,142		16,124,471

Total Vietnam				66,217,201



THAILAND: 3.4%

Central Pattana Public Co., Ltd.		31,962,500		64,907,821

Total Thailand				64,907,821



INDONESIA: 2.8%

PT Bank Central Asia Tbk		87,962,700		53,718,788

Total Indonesia				53,718,788



PHILIPPINES: 2.1%

SM Prime Holdings, Inc.		67,960,971		40,377,714

Total Philippines				40,377,714



SINGAPORE: 1.5%

DBS Group Holdings, Ltd.		1,168,600		29,552,529

Total Singapore				29,552,529



TOTAL INVESTMENTS: 101.7%				1,961,685,107
(Cost $1,707,589,755)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (1.7%)				(32,651,425	)


NET ASSETS: 100.0%				$1,929,033,682

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Non-income producing security.

ADR	American Depositary Receipt

JSC	Joint Stock Co.

See accompanying notes to financial statements.


32		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Michael J. Oh, CFA
Lead Manager

Inbok Song
Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MATFX	MITEX
CUSIP	577130883	577125859
Inception	12/27/99	4/30/13
NAV	$11.11	$11.28
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.15%	1.02%
Portfolio Statistics
Total # of Positions		49
Net Assets		$313.0 million
Weighted Average Market Cap		$187.8 billion
Portfolio Turnover²		248.2%
Benchmark
MSCI AC Asia ex Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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 that Matthews believes are innovators in their products, services, processes, business models, management, use of technology, or approach to creating, expanding or servicing their markets. Asia ex Japan consists of all countries and markets in Asia excluding Japan, but including developed, emerging, and frontier countries and markets in the Asian region.

Matthews Asia Innovators Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Asia Innovators Fund returned –1.77% (Investor Class) and –1.62% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 6.34% over the same period. For the fourth quarter, the Fund returned 6.12% (Investor Class) and 6.14% (Institutional Class), while the benchmark returned 6.48%.

Market Environment

2023 was challenging on many levels for Asia equity markets. At the macro level, rising interest rates and a strong U.S. dollar were headwinds for the region. Growth companies were out of favor while value companies relatively outperformed. Geopolitical tensions between the U.S. and China also remained elevated, particularly in the first half, and we expect these tensions to continue. The most notable feature, however, was the prolonged weakness of the Chinese economy. The rapid post-COVID recovery that many investors expected didn’t materialize and the country instead struggled with a lack of confidence and problems in specific sectors like real estate. Mitigating China’s woes somewhat was India’s continued resilient growth, supported in part by its domestic infrastructure programs and increasing global trade. Information technology (IT) was the largest contributor to returns in the region, while communication services was among the laggards. Toward the end of the year, there was a general consensus that inflation had peaked in the global economy and that the U.S. Federal Reserve would pivot toward cutting rates in 2024 and the dollar would weaken. This provided some tailwinds across the region in the final quarter of 2023.

Performance Contributors and Detractors

Regionally, our overweight and stock selection in China/Hong Kong was the biggest detractor to relative and total returns in 2023. Our exposure was hurt by the much slower-than-expected recovery in China, international concerns over geopolitical risks, and regulatory uncertainties related to technology companies. Stock selection in India and South Korea also detracted from returns, as did an underweight in Taiwan, which rallied last year. On the other hand, an off-benchmark allocation to the U.S. contributed the most to relative returns. We invest in companies that are generating more than 50% of their revenue from Asia but are not necessarily based in Asia. An underweight to Thailand and lack of exposure to Malaysia also contributed.

At the sector level, stock selections in communication services and health care were the biggest detractors from relative returns. In contrast, stock selection in real estate was the top contributor; a lack of exposure to utilities and materials, and an overweight in IT also contributed.

On a company basis, Alchip was the biggest contributor to relative returns last year. The Taiwan-based provider of silicon designs and manufacturing services for the chip industry is well positioned, we believe, to benefit from on-going developments in the artificial intelligence (AI) industry. PDD Holdings, operator of the Pinduoduo ecommerce app, was another big contributor to total and relative returns. PDD has been gaining market share in China and its overseas unit, Temu, has been growing rapidly.

Ecommerce giant Alibaba was the biggest detractor to returns and Kuaishou Technology, a video-sharing platform, also detracted. Alibaba’s topline growth slowed

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			33



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MATFX)		6.12%		-1.77%		-13.74%		9.21%		7.20%		4.20%			12/27/99
Institutional Class (MITEX)		6.14%		-1.62%		-13.62%		9.35%		7.39%		9.17%			4/30/13
MSCI AC Asia ex Japan Index³		6.48%		6.34%		-6.43%		4.01%		4.17%		5.45%	⁴

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 12/31/99.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		9.0%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		7.5%
PDD Holdings, Inc.	Consumer Discretionary	China/Hong Kong		7.2%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		3.5%
NVIDIA Corp.	Information Technology	United States		3.5%
ICICI Bank, Ltd.	Financials	India		3.5%
Axis Bank, Ltd.	Financials	India		3.4%
SK Hynix, Inc.	Information Technology	South Korea		3.2%
Reliance Industries, Ltd.	Energy	India		3.2%
Zomato, Ltd.	Consumer Discretionary	India		3.0%
% OF ASSETS IN TOP 10				47.0%

Holdings may combine more than one security from same issuer and related depositary receipts.


34		MATTHEWS ASIA FUNDS



COUNTRY ALLOCATION (%)^6,7
China/Hong Kong			32.9
India			25.6
Taiwan			14.9
South Korea			14.0
United States			5.0
Indonesia			3.5
Netherlands			1.9
Brazil			1.1
Cash and other Assets, Less Liabilities			1.1



SECTOR ALLOCATION (%)⁷
Information Technology			33.0
Consumer Discretionary			25.7
Financials			18.5
Industrials			7.2
Communication Services			5.9
Energy			3.2
Health Care			3.1
Consumer Staples			1.2
Real Estate			1.0
Cash and other Assets, Less Liabilities			1.1



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			72.8
Large Cap ($10B–$25B)			14.3
Mid Cap ($3B–10B)			11.7
Small Cap (under $3B)			0.1
Cash and Other Assets, Less Liabilities			1.1

Not all countries are included in the benchmark index.

Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Asia Innovators Fund

Portfolio Manager Commentary (unaudited) (continued)

in 2023 and it lost market share to competitors. Kuaishou’s fundamentals are still sound in our view, but the stock has suffered amid ongoing uncertainties around China’s regulatory environment.

Notable Portfolio Changes

We reduced our China exposure in the portfolio in the last quarter as we feel the opportunity set has shrunk due to higher regulatory risks, a persisting weak domestic economy and soft consumer sentiment. Among our exits were Alibaba, digital services platform Baidu, video platform Bilibili and Kuaishou Technology. On the other hand, we added Godrej Consumer Products, an India-based consumer staples company, and Shenzhen-based BYD Company, the world’s largest maker of electric vehicles (EVs). In India, consumer staples is one area that will continue to see stable growth going forward, in our view, and Godrej Consumer Products is well positioned to benefit. BYD surpassed the EV market share of Tesla in the last quarter. We are focusing on Chinese companies with competitive international business models and BYD fits into this strategy well.

Outlook

Overall we’re optimistic for 2024. We pivoted during the last quarter of the year to adjust the country weightings in the portfolio to address the on-going evolution in the region. China remains challenging. We believe the government is not making necessary reforms to improve its domestic economy and unless we see a firm change in policies and an improvement in the regulatory environment we will maintain a cautious view on the Chinese equity market.

More generally, the semiconductor industry is passing the bottom of the cycle and Asia maintains its leading edge when it comes to the foundry and the memory segments, which are the backbone of the global industry. The consumer market in Asia also remains the largest and fastest growing market in the world and provides a great foundation for innovation and entrepreneurship to flourish.


				matthewsasia.com \| 800.789.ASIA			35

Matthews Asia Innovators Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 98.9%


	Shares		Value

CHINA/HONG KONG: 32.9%

PDD Holdings, Inc. ADR^b		155,004		$22,678,635

Alibaba Group Holding, Ltd.		917,000		8,833,042

AIA Group, Ltd.		792,000		6,892,683

Tencent Holdings, Ltd.		154,500		5,833,128

WuXi AppTec Co., Ltd. A Shares		471,400		4,814,941

Trip.com Group, Ltd. ADR^b		133,639		4,812,341

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		117,328		4,788,431

Meituan Class B^b,c,d		449,300		4,717,101

Full Truck Alliance Co., Ltd. ADR^b		664,890		4,660,879

Contemporary Amperex Technology Co., Ltd. A Shares		183,100		4,195,279

Shenzhen Inovance Technology Co., Ltd. A Shares		430,000		3,812,147

Kanzhun, Ltd. ADR		226,487		3,761,949

BYD Co., Ltd. H Shares		131,000		3,613,587

Zhejiang Shuanghuan Driveline Co., Ltd. A Shares		914,900		3,336,565

KE Holdings, Inc. ADR		201,439		3,265,326

MINISO Group Holding, Ltd. ADR		155,252		3,167,141

DiDi Global, Inc.^b		774,388		3,058,833

New Oriental Education & Technology Group, Inc. ADR^b		35,701		2,616,169

Tencent Music Entertainment Group ADR^b		270,825		2,440,133

NAURA Technology Group Co., Ltd. A Shares		46,900		1,616,290

Total China/Hong Kong				102,914,600



INDIA: 25.6%

ICICI Bank, Ltd.		909,122		10,863,825

Axis Bank, Ltd.		814,635		10,781,185

Reliance Industries, Ltd.		320,400		9,944,560

Zomato, Ltd.^b		6,226,264		9,241,512

HDFC Bank, Ltd.		428,477		8,773,504

Mahindra & Mahindra, Ltd.		315,719		6,557,038

Godrej Consumer Products, Ltd.		286,053		3,887,139

Indian Hotels Co., Ltd.		729,573		3,841,222

ABB India, Ltd.		65,965		3,704,626

Titan Co., Ltd.		72,670		3,207,436

HDFC Life Insurance Co., Ltd.^c,d		398,948		3,099,884

Bajaj Finance, Ltd.		35,149		3,092,808

Cummins India, Ltd.		128,023		3,019,820

Total India				80,014,559



TAIWAN: 14.9%

Taiwan Semiconductor Manufacturing Co., Ltd.		1,475,000		28,278,038

Alchip Technologies, Ltd.		63,000		6,694,275

Accton Technology Corp.		202,000		3,433,352

Wiwynn Corp.		53,000		3,138,158

Unimicron Technology Corp.		543,000		3,102,429

Lotes Co., Ltd.		46,000		1,599,579

M31 Technology Corp.		11,000		378,679

Total Taiwan				46,624,510


	Shares		Value

SOUTH KOREA: 14.0%

Samsung Electronics Co., Ltd.		388,845		$23,601,663

SK Hynix, Inc.		91,559		9,992,563

NAVER Corp.		37,375		6,466,636

Kia Corp.		47,307		3,658,407

Total South Korea				43,719,269



UNITED STATES: 5.0%

NVIDIA Corp.		22,216		11,001,808

Applied Materials, Inc.		28,859		4,677,178

Total United States				15,678,986



INDONESIA: 3.5%

PT Bank Rakyat Indonesia Persero Tbk		29,714,700		11,044,000

Total Indonesia				11,044,000



NETHERLANDS: 1.9%

ASML Holding NV		7,796		5,900,948

Total Netherlands				5,900,948



BRAZIL: 1.1%

NU Holdings, Ltd. Class A^b		416,562		3,469,961

Total Brazil				3,469,961



TOTAL INVESTMENTS: 98.9%				309,366,833
(Cost $277,207,603)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.1%				3,585,973


NET ASSETS: 100.0%				$312,952,806

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


36		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Andrew Mattock, CFA
Lead Manager

Winnie Chwang	Sherwood Zhang, CFA
Co-Manager	Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MCHFX	MICFX
CUSIP	577130701	577130818
Inception	2/19/98	10/29/10
NAV	$11.62	$11.60
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.15%	1.01%
Portfolio Statistics
Total # of Positions		51
Net Assets		$448.5 million
Weighted Average Market Cap		$100.0 billion
Portfolio Turnover²		49.6%
Benchmarks
MSCI China Index
MSCI China All Shares Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews China Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews China Fund returned –19.22% (Investor Class) and –19.11% (Institutional Class), while its benchmark, the MSCI China Index, returned –11.04% over the same period. For the fourth quarter, the Fund returned –5.16% (Investor Class) and –5.16% (Institutional Class), while the benchmark returned –4.21%.

Market Environment

2023 was a disappointing year for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post-COVID lockdowns but also due to the lack of any significant stimulus measures by the government. While the government started to gradually loosen nearly all property purchase-restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes have barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound.

The challenging real estate market and the soft consumption environment create a potential formula for deflation, in our view. From what we can see, many entrepreneurs, whose animal spirits were curbed during the COVID period, are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francsico in November didn’t curb the ongoing concerns of international investors.

In terms of markets, quarterly results of leading Chinese companies, especially large-cap technology firms, seem to be hinting toward upward surprises in terms of topline revenue and earnings. During the last quarter of the year, information technology (IT) and utilities were the only positive sectors while real estate was weakest followed by consumer staples and communication services. Chinese small and mid caps ended lower but outperformed weak large and mega caps during the quarter.

Performance Contributors and Detractors

From a sector perspective, our lack of exposure to materials and stock selection within IT and consumer staples contributed the most to relative performance in 2023. Among individual holdings, the top stock performer was Pinduoduo (PDD), one of China’s largest e-commerce platforms that started its businesses with a focus on lower-tier city, price sensitive consumers directly through its interactive shopping experience. PDD delivered strong results during the year in what has been a weaker e-commerce market in China. Gross merchandize value (GMV) growth and monetization for PDD has remained on track. PDD’s strong execution continues to make it a standout in its peer group.

Tencent Music Entertainment Group, the largest music streaming service entity in China, was another outperformer. We think the market is coming to terms with the steady decline of its social entertainment business being offset by what is a growing willingness of consumers to pay for music streaming services. Music services in China have an opportunity to realize higher profitability than global peers such as Spotify, in our view, because the top labels in China account for a smaller share of music streaming traffic and therefore don’t have as much bargaining power in China as they do in the West.

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			37



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years			Since Inception			Inception Date
Investor Class (MCHFX)		-5.16%		-19.22%		-18.78%		0.62%		1.83%			7.22%			2/19/98
Institutional Class (MICFX)		-5.16%		-19.11%		-18.65%		0.79%		1.99%			1.19%			10/29/10
MSCI China Index³		-4.21%		-11.04%		-18.31%		-2.65%		1.03%			2.65%	⁴
MSCI China All Shares Index³		-3.81%		-11.35%		-16.05%		0.21%		n.a.	⁵		n.a.	⁵

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 2/28/98.

Index launched on 6/26/14.



TOP TEN HOLDINGS⁶
Name	Sector	% Net Assets
Tencent Holdings, Ltd.	Communication Services		9.0%
Alibaba Group Holding, Ltd.	Consumer Discretionary		8.7%
PDD Holdings, Inc.	Consumer Discretionary		6.7%
JD.com, Inc.	Consumer Discretionary		4.7%
China Merchants Bank Co., Ltd.	Financials		4.3%
Meituan Class B	Consumer Discretionary		4.3%
KE Holdings, Inc.	Real Estate		3.9%
China International Capital Corp., Ltd.	Financials		3.7%
CITIC Securities Co., Ltd.	Financials		3.5%
Shenzhen Mindray Bio-Medical Electronics Co., Ltd.	Health Care		2.2%
% OF ASSETS IN TOP 10			51.0%

Holdings may combine more than one security from same issuer and related depositary receipts.


38		MATTHEWS ASIA FUNDS



COUNTRY ALLOCATION (%)⁷
China/Hong Kong			102.2
Liabilities in Excess of Cash and Other Assets			-2.3



SECTOR ALLOCATION (%)⁷
Consumer Discretionary			36.5
Financials			18.0
Communication Services			15.3
Consumer Staples			7.1
Industrials			6.7
Real Estate			6.0
Information Technology			5.2
Health Care			4.9
Energy			1.9
Utilities			0.7
Liabilities in Excess of Cash and Other Assets			-2.3



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			64.8
Large Cap ($10B–$25B)			24.6
Mid Cap ($3B–10B)			7.7
Small Cap (under $3B)			5.1
Liabilities in Excess of Cash and Other Assets			-2.3

⁷	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews China Fund

Portfolio Manager Commentary (unaudited) (continued)

On the other hand, stock selection in real estate, consumer discretionary and financials detracted from performance for the year. Turning to individual holdings, property developer CIFI Holdings was among the biggest detractors to relative performance. CIFI’s stock only resumed trading at the end of September after a long suspension and its negative share price performance had an accumulated impact over the time it was suspended. China’s largest food delivery service and internet platform company Meituan, a well-held name in global portfolios, also detracted as a risk-off appetite toward China led to a selloff. JD.com was the biggest detractor during the year. The e-commerce platform has generated concerns overs its growth prospects and has been weighed down by China’s muted recovery. While internet platform companies’ valuations have pulled back considerably, we believe they largely remain profitable and scale-oriented businesses. We continue to be overweight in consumer discretionary, led by an exposure in platform companies which we feel are very cheap and continue to deliver earnings improvement.

Notable Portfolio Changes

We streamlined the number of positions in the portfolio from 64 to 51 over the course of the year. Our overall exposure in mainland-listed companies has been reduced from around 38% in Dec. 2022 to 28% at the end of the year. Many smaller A-shares positions that were more expensive were exited from the portfolio as cheaper valuations, given the pull back, enabled us to build more into better quality holdings. In the more recent quarters, we have incrementally added to our positions in certain communication services names such as Tencent Music and social platform company Kuaishou Technology (driven by low valuations as well as increased willingness among consumers to spend and pay for online services). We’ve also added to consumer names such as Yum China and Tsingtao Brewery (driven by the pull back of these names leading to attractive valuations for what are still renowned brands in China).

Outlook

2023 has been generally a challenging year for China. Despite the lifting of COVID restrictions in the country, the government’s lack of stimulus generally led to weakening economic support. At the same time, property market woes continued, impacting sentiment and business confidence in the country. While more supportive measures have been rolled out later in the year to address property market concerns, a meaningful inflection remains to be seen.

Looking ahead, we are cautiously looking for a stabilization of the deterioration in property markets. While we do not expect a significant warming of geo-politics, the ongoing current status quo of a more constructive post-APEC posturing would be welcomed by the market. Valuations continued to trend down in 2023, and the broader China market hovers around similar levels as 2009 despite better quality businesses and earnings profile. We continue to believe that patience is needed in these market environments and, that it could ultimately pay off if the market turns. We intend to stick to our knitting and aim to deliver consistent growth-at-a reasonable price strategy for our clients.


				matthewsasia.com \| 800.789.ASIA			39

Matthews China Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 102.3%


	Shares		Value

CONSUMER DISCRETIONARY: 36.5%
Broadline Retail: 20.1%

Alibaba Group Holding, Ltd.		4,045,500		$38,968,452

PDD Holdings, Inc. ADR^b		205,327		30,041,393

JD.com, Inc. Class A		1,462,063		21,116,709

				90,126,554


Hotels, Restaurants & Leisure: 10.4%

Meituan Class B^b,c,d		1,815,580		19,061,372

Galaxy Entertainment Group, Ltd.		1,721,000		9,639,093

Yum China Holdings, Inc.		149,071		6,325,083

Trip.com Group, Ltd. ADR^b		172,415		6,208,664

Luckin Coffee, Inc. ADR^b		193,113		5,268,123

				46,502,335


Household Durables: 3.6%

Midea Group Co., Ltd. A Shares		1,056,252		8,100,376

Man Wah Holdings, Ltd.		11,577,200		7,940,164

				16,040,540


Diversified Consumer Services: 1.1%
China Education Group Holdings, Ltd.^d		8,327,000		5,225,425


Specialty Retail: 0.8%
China Tourism Group Duty Free Corp., Ltd. A Shares		293,690		3,450,471


Automobiles: 0.5%
Yadea Group Holdings, Ltd.^c,d		1,312,000		2,310,921

Total Consumer Discretionary				163,656,246



FINANCIALS: 18.0%
Capital Markets: 8.9%

China International Capital Corp., Ltd. H Shares^c,d		11,415,200		16,772,007

CITIC Securities Co., Ltd. H Shares		7,577,925		15,482,727

Hong Kong Exchanges & Clearing, Ltd.		161,800		5,549,782

East Money Information Co., Ltd. A Shares		1,187,220		2,341,321

				40,145,837


Banks: 6.1%

China Merchants Bank Co., Ltd. A Shares		4,925,823		19,237,626

China Construction Bank Corp. H Shares		13,384,000		7,961,481

				27,199,107


Insurance: 3.0%

Ping An Insurance Group Co. of China, Ltd. H Shares		1,942,000		8,792,015

PICC Property & Casualty Co., Ltd. H Shares		3,816,000		4,541,106

				13,333,121

Total Financials				80,678,065



COMMUNICATION SERVICES: 15.3%
Interactive Media & Services: 11.9%

Tencent Holdings, Ltd.		1,064,400		40,186,287

Kuaishou Technology^b,c,d		1,136,400		7,732,321

Baidu, Inc. Class A^b		357,000		5,314,272

				53,232,880


	Shares		Value
Entertainment: 1.8%
Tencent Music Entertainment Group ADR^b		904,331		$8,148,023


Media: 1.6%
Focus Media Information Technology Co., Ltd. A Shares		8,352,357		7,414,117

Total Communication Services				68,795,020



CONSUMER STAPLES: 7.1%
Beverages: 4.6%

Wuliangye Yibin Co., Ltd. A Shares		412,429		8,125,857

Tsingtao Brewery Co., Ltd. H Shares		930,000		6,248,963

Shanxi Xinghuacun Fen Wine Factory Co., Ltd. A Shares		191,722		6,211,182

				20,586,002


Consumer Staples Distribution & Retail: 1.3%
JD Health International, Inc.^b,c,d		1,162,100		5,833,449


Food Products: 1.2%
Guangdong Haid Group Co., Ltd. A Shares		825,300		5,201,522

Total Consumer Staples				31,620,973



INDUSTRIALS: 6.7%
Electrical Equipment: 3.3%

Sungrow Power Supply Co., Ltd. A Shares		608,874		7,482,348

Contemporary Amperex Technology Co., Ltd. A Shares		313,960		7,193,609

				14,675,957


Machinery: 2.0%

Shenzhen Inovance Technology Co., Ltd. A Shares		558,107		4,947,874

Estun Automation Co., Ltd. A Shares		1,659,544		4,327,897

				9,275,771


Transportation Infrastructure: 1.4%
Shanghai International Airport Co., Ltd. A Shares^b		1,350,891		6,214,441

Total Industrials				30,166,169



REAL ESTATE: 6.0%
Real Estate Management & Development: 6.0%

KE Holdings, Inc. ADR		1,070,093		17,346,208

Country Garden Services Holdings Co., Ltd.		5,577,000		4,829,423

CIFI Holdings Group Co., Ltd.^b		104,961,520		3,437,955

Times China Holdings, Ltd.^b		42,755,000		1,425,888

Total Real Estate				27,039,474



INFORMATION TECHNOLOGY: 5.2%
Electronic Equipment, Instruments & Components: 2.7%

Wingtech Technology Co., Ltd. A Shares^b		1,080,317		6,413,514

SUPCON Technology Co., Ltd. A Shares		867,810		5,520,656

				11,934,170


Software: 1.4%
Shanghai Baosight Software Co., Ltd. A Shares		952,034		6,518,729


40		MATTHEWS ASIA FUNDS

Matthews China Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value
Semiconductors & Semiconductor Equipment: 1.1%

Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. A Shares		389,858		$2,411,758

NAURA Technology Group Co., Ltd. A Shares		68,313		2,354,235

				4,765,993

Total Information Technology				23,218,892



HEALTH CARE: 4.9%
Health Care Equipment & Supplies: 2.2%
Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		247,114		10,085,302


Life Sciences Tools & Services: 1.5%

Wuxi Biologics Cayman, Inc.^b,c,d		1,715,000		6,486,565

WuXi XDC Cayman, Inc.^b		4,073		16,692

				6,503,257


Health Care Providers & Services: 1.2%
Sinopharm Group Co., Ltd. H Shares		1,995,200		5,229,014

Total Health Care				21,817,573



ENERGY: 1.9%
Oil, Gas & Consumable Fuels: 1.9%
PetroChina Co., Ltd. H Shares		12,650,000		8,358,996

Total Energy				8,358,996



UTILITIES: 0.7%
Gas Utilities: 0.7%
ENN Energy Holdings, Ltd.		439,600		3,246,203

Total Utilities				3,246,203



TOTAL INVESTMENTS: 102.3%				458,597,611
(Cost $665,641,829)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (2.3%)				(10,138,595	)


NET ASSETS: 100.0%				$448,459,016

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			41

LOGO


PORTFOLIO MANAGERS

Winnie Chwang	Andrew Mattock, CFA
Lead Manager	Lead Manager

FUND FACTS

	Investor	Institutional
Ticker	MCSMX	MICHX
CUSIP	577125404	577125842
Inception	5/31/11	11/30/17
NAV	$8.95	$8.94
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.55%	1.41%
After Fee Waiver and Reimbursement²	1.41%	1.20%
Portfolio Statistics
Total # of Positions		44
Net Assets		$89.2 million
Weighted Average Market Cap		$4.5 billion
Portfolio Turnover³		59.1%
Benchmark
MSCI China Small Cap Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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 Small Companies located in China. China includes its administrative and other districts, such as Hong Kong. The Fund defines Small Companies as companies with market capitalization no higher than the greater of $5 billion or the market capitalization of the largest company included in the Fund’s primary benchmark, the MSCI China Small Cap Index.

Matthews China Small Companies Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews China Small Companies Fund returned –17.51% (Investor Class) and –17.37% (Institutional Class), while its benchmark, the MSCI China Small Cap Index, returned –24.82% over the same period. For the fourth quarter, the Fund returned –6.96% (Investor Class) and –6.91% (Institutional Class), while the benchmark returned –2.93%.

Market Environment

2023 was a disappointing year for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post-COVID lockdowns, but also due to the lack of any significant stimulus measures by the government. While the government started to gradually loosen nearly all property purchase-restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes have barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound.

The challenging real estate market and the soft consumption environment create a potential formula for deflation, in our view. From what we can see, many entrepreneurs, whose animal spirits were curbed during the COVID period, are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francsico in November have not curbed the ongoing concerns of the market.

In terms of markets, quarterly results of leading Chinese companies, especially large cap technology firms seem to be hinting towards upward surprises in terms of top line revenue and earnings. During the last quarter of the year, information technology and utilities were the only positive sectors while real estate was weakest followed by consumer staples and communication services. Chinese small and mid caps ended lower but outperformed weak large and mega caps during the quarter.

Performance Contributors and Detractors

From a sector perspective, our allocation to health care and stock selection within industrials detracted the most from relative performance in the year. We have been underweight health care relative to the index given its larger exposure in biotech where we have been more selective this year. Industrials have underperformed given our exposure in renewables which is going through a slower growth period amid capacity expansions and increased worries that oversupply might lead to weaker pricing. Turning to individual holdings, Xtep International Holdings, a consumer discretionary company engaged in the development and manufacturing of sportswear, detracted the most from the portfolio’s absolute and relative performance. Xtep has been impacted by weaker-than-expected consumption environment which has led to slower-than-expected growth in the sportswear industry. BOE Varitronix, an auto parts manufacturer, was another detractor. The company has been experiencing some pricing pressures given a slowdown in the growth of both China’s traditional ICE (Internal combustion engine) and EV

(continued)

1	Actual 2023 expense ratios.

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 1.20% 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 (e.g., custody fees) 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 1.20% 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 1.20%. If the operating expenses fall below the expense limitation 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, 2025 and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

3	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


42		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception date
Investor Class (MCSMX)		-6.96%		-17.51%		-18.23%		6.21%		5.34%		4.25%			05/31/11
Institutional Class (MICHX)		-6.91%		-17.37%		-18.05%		6.43%		n.a.		3.00%			11/30/17
MSCI China Small Cap Index⁴		-2.93%		-24.82%		-19.06%		-6.38%		-3.51%		-3.21%	⁵

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 5/31/11



TOP TEN HOLDINGS⁶
Name	Sector	% Net Assets
Alchip Technologies, Ltd.	Information Technology		4.6%
Yangzijiang Shipbuilding Holdings, Ltd.	Industrials		4.3%
Samsonite International SA	Consumer Discretionary		4.3%
ACM Research, Inc.	Information Technology		4.2%
Jason Furniture Hangzhou Co., Ltd.	Consumer Discretionary		3.4%
China Overseas Property Holdings, Ltd.	Real Estate		3.3%
KE Holdings, Inc.	Real Estate		3.3%
Kanzhun, Ltd.	Communication Services		3.3%
Morimatsu International Holdings Co., Ltd.	Industrials		3.0%
ENN Natural Gas Co., Ltd.	Utilities		2.8%
% OF ASSETS IN TOP 10			36.5%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			43

Matthews China Small Companies Fund

Portfolio Manager Commentary (unaudited) (continued)

(electric vehicle) auto industry. We believe these two names sold down more relative to their weaker outlook, and that their current valuations have more than compensated for a lower growth outlook ahead.

On the other hand, stock selection within information technology and real estate sectors contributed the most to the Fund’s relative performance. Two Taiwan-listed information technology names including Alchip Technologies contributed the most to the Fund’s absolute and relative performance as beneficiaries from the secular trends of AI (artificial intelligence). Alchip designs application-specific integrated circuits (ASIC) and the company continues to see growing penetration and development from customized AI chip designs. Anhui Yingjia Distillery, a mass market white liquor manufacturer, was another top contributor. Anhui Yingjia has done well given the company’s positive efforts in distribution and branding restructuring in its hometown of Anhui province.

Notable Portfolio Changes

We streamlined the number of positions in the portfolio from 64 to 44 over the course of the year. Overall exposure in mainland-listed companies has been reduced from around 39% in Dec 2022 to 24% at the end of the year. Many smaller A-shares positions that were more expensive were exited from the portfolio as cheaper valuations given the pull back enabled us to build more into better quality holdings. In the more recent quarters, we have incrementally added to our positions in certain communication services names such as Cloud Music (driven by low valuations as well as increased willingness of consumers to spend and pay for online services). We’ve also added to consumer names such as Melco Resorts & Entertainment and Tongcheng Travel Holdings (driven by the pull back of these names leading to attractive valuations for what are still renowned brands in China) and to health care names such as HUTCHMED and Kangji Medical Holdings.

Outlook



COUNTRY ALLOCATION (%)⁷
China/Hong Kong			80.6
Taiwan			11.2
United States			8.5
Liabilities in Excess of Cash and Other Assets			-0.3



SECTOR ALLOCATION (%)⁷
Consumer Discretionary			21.9
Industrials			20.4
Information Technology			18.7
Health Care			11.3
Consumer Staples			9.1
Communication Services			6.7
Real Estate			6.6
Utilities			2.8
Financials			2.7
Liabilities in Excess of Cash and Other Assets			-0.3



MARKET CAP EXPOSURE (%)^7,8
Mega Cap (over $25B)			0.0
Large Cap ($10B–$25B)			8.0
Mid Cap ($3B–10B)			55.5
Small Cap (under $3B)			36.7
Liabilities in Excess of Cash and Other Assets			-0.3

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

8	The Fund defines Small Companies as companies with market capitalization no higher than the greater of $5 billion or the market capitalization of the largest company included in the Fund’s primary benchmark, the MSCI China Small Cap Index.


44		MATTHEWS ASIA FUNDS

Matthews China Small Companies Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 100.3%


	Shares		Value

CONSUMER DISCRETIONARY: 21.9%
Textiles, Apparel & Luxury Goods: 6.4%

Samsonite International SA^b,c,d		1,162,200		$3,834,356

Xtep International Holdings, Ltd.		3,249,000		1,836,637

				5,670,993


Household Durables: 5.5%

Jason Furniture Hangzhou Co., Ltd. A Shares		625,400		3,074,114

Hisense Home Appliances Group Co., Ltd. H Shares		834,000		1,801,940

				4,876,054


Hotels, Restaurants & Leisure: 4.8%

Tongcheng Travel Holdings, Ltd.^c,d		1,276,400		2,363,956

Melco Resorts & Entertainment, Ltd. ADR^c		221,847		1,967,783

				4,331,739


Automobile Components: 2.0%
Zhejiang Shuanghuan Driveline Co., Ltd. A Shares		483,203		1,770,513


Diversified Consumer Services: 1.6%
China Education Group Holdings, Ltd.^d		2,344,000		1,470,925


Automobiles: 1.6%
Yadea Group Holdings, Ltd.^b,d		792,000		1,395,007

Total Consumer Discretionary				19,515,231



INDUSTRIALS: 20.4%
Machinery: 9.5%

Yangzijiang Shipbuilding Holdings, Ltd.		3,434,500		3,874,790

Morimatsu International Holdings Co., Ltd.^c,d		3,779,000		2,662,727

Airtac International Group		58,191		1,912,048

				8,449,565


Professional Services: 2.4%
Centre Testing International Group Co., Ltd. A Shares		1,069,400		2,141,888


Construction & Engineering: 2.4%
Greentown Management Holdings Co., Ltd.^b,d		3,101,000		2,133,759


Electrical Equipment: 2.3%
Hongfa Technology Co., Ltd. A Shares		531,157		2,059,688


Ground Transportation: 2.2%
Full Truck Alliance Co., Ltd. ADR^c		287,021		2,012,017


Marine Transportation: 0.9%
SITC International Holdings Co., Ltd.		450,500		777,576


Transportation Infrastructure: 0.7%
Beijing Capital International Airport Co., Ltd. H Shares^c		2,158,000		633,144

Total Industrials				18,207,637


	Shares		Value

INFORMATION TECHNOLOGY: 18.7%
Semiconductors & Semiconductor Equipment: 10.1%

Alchip Technologies, Ltd.		39,000		$4,144,075

ACM Research, Inc. Class A^c		190,616		3,724,637

AP Memory Technology Corp.		78,000		1,188,803

				9,057,515


Electronic Equipment, Instruments & Components: 6.6%

Elite Material Co., Ltd.		175,000		2,173,148

Shenzhen Topband Co., Ltd. A Shares		1,542,800		2,112,212

BOE Varitronix, Ltd.		1,740,000		1,575,346

				5,860,706


Software: 2.0%
Longshine Technology Group Co., Ltd. A Shares		761,444		1,751,418

Total Information Technology				16,669,639



HEALTH CARE: 11.3%
Health Care Equipment & Supplies: 4.9%

AK Medical Holdings, Ltd.^b,d		2,850,000		2,286,004

Peijia Medical, Ltd.^b,c,d		1,681,000		1,591,589

Kangji Medical Holdings, Ltd.		537,500		481,324

				4,358,917


Health Care Technology: 2.3%
Medlive Technology Co., Ltd.^b,d		1,873,500		2,034,529


Biotechnology: 1.9%
Legend Biotech Corp. ADR^c		29,089		1,750,285


Pharmaceuticals: 1.6%
HUTCHMED China, Ltd.^c		380,000		1,396,795


Life Sciences Tools & Services: 0.6%
WuXi XDC Cayman, Inc.^c		140,500		575,783

Total Health Care				10,116,309



CONSUMER STAPLES: 9.1%
Beverages: 3.6%

Anhui Yingjia Distillery Co., Ltd. A Shares		182,000		1,693,556

Anhui Kouzi Distillery Co., Ltd. A Shares		234,300		1,489,438

				3,182,994


Food Products: 3.1%

Anjoy Foods Group Co., Ltd. A Shares		103,447		1,518,414

Chacha Food Co., Ltd. A Shares		259,100		1,265,450

				2,783,864


Personal Care Products: 2.4%
Giant Biogene Holding Co., Ltd.^b,c,d		472,200		2,153,881

Total Consumer Staples				8,120,739


				matthewsasia.com \| 800.789.ASIA			45

Matthews China Small Companies Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value

COMMUNICATION SERVICES: 6.7%
Interactive Media & Services: 5.2%

Kanzhun, Ltd. ADR		175,850		$2,920,868

Zhihu, Inc. ADR^c		1,811,658		1,696,437

				4,617,305


Entertainment: 1.5%
Cloud Music, Inc.^b,c,d		114,400		1,315,870

Total Communication Services				5,933,175



REAL ESTATE: 6.6%
Real Estate Management & Development: 6.6%

China Overseas Property Holdings, Ltd.		3,975,000		2,983,082

KE Holdings, Inc. A Shares		536,300		2,930,129

Total Real Estate				5,913,211



UTILITIES: 2.8%
Gas Utilities: 2.8%
ENN Natural Gas Co., Ltd. A Shares		1,043,242		2,462,334

Total Utilities				2,462,334



FINANCIALS: 2.8%
Financial Services: 2.8%
Chailease Holding Co., Ltd.		390,106		2,451,327

Total Financials				2,451,327



TOTAL INVESTMENTS: 100.3%				89,389,602
(Cost $106,116,962)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (0.3%)				(233,468	)


NET ASSETS: 100.0%				$89,156,134

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


46		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Peeyush Mittal, CFA
Lead Manager

Swagato Ghosh
Co-Manager

FUND FACTS

	Investor	Institutional
Ticker	MINDX	MIDNX
CUSIP	577130859	577130768
Inception	10/31/05	10/29/10
NAV	$26.37	$26.93
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.14%	1.01%
Portfolio Statistics
Total # of Positions		70
Net Assets		$763.1 million
Weighted Average Market Cap		$44.1 billion
Portfolio Turnover²		51.0%
Benchmarks
S&P Bombay Stock Exchange 100 Index
MSCI India Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews India Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews India Fund returned 23.10% (Investor Class) and 23.32% (Institutional Class), while its benchmark, the S&P Bombay Stock Exchange 100 Index, returned 22.44% over the same period. For the fourth quarter, the Fund returned 8.68% (Investor Class) and 8.75% (Institutional Class), while the benchmark returned 11.38%.

Market Environment

High interest rates globally, on the back of monetary policy tightening, continued for most of 2023. Through the course of this year, we saw a substantial cooling off in the price of both hard and soft commodities yet inflation continued to remain higher than the comfort level of most central banks globally. In part this was related to the unfolding Russia-Ukraine and Israel-Gaza military conflicts. These events have led to tightness in energy markets, elevated logistics costs and challenged food supplies which in turn have kept inflation from falling faster.

India was a bright spot in global markets with strong returns helped by both fundamentals and investor inflows. Domestic economic activity remained strong as the government maintained its infrastructure-related spending momentum. Consumption, however, was soft throughout the year especially at the mid and bottom-end of the income strata. Weak monsoons also delayed recovery in rural demand. In spite of this, GDP growth was above 7% in last three quarters led mainly by government capital expenditure expansion.

Results of state elections held in the later part of the year increased the probability of political continuity of incumbent Prime Minister Modi in the 2024 general elections. And while foreign flows were supportive, incremental positive domestic flows were a bigger driver of the market in 2023.

The world is also witnessing an accelerated trend by businesses of all sizes to reset their supply chains and to reduce their dependence on imports from China. Given the political and economic stability of India, more and more businesses are looking to relocate parts of their supply network to India.

Performance Contributors and Detractors

For the year, stock selection in health care, financials and information technology (IT) were the biggest contributors to relative performance. On the other hand, an underweight in utilities was the biggest detractor to relative performance. Stock selection in consumer discretionary and consumer staples were also big detractors for the year.

At the holdings level, Neuland Laboratories, Shriram Finance and Cholamandalam Investment and Finance Co. were among the top contributors to performance for the year. Neuland is an API (active pharmaceutical manufacturing) company which executed its business strategy throughout the year and posted robust numbers. Shriram and Chola are non-bank financial institutions (NBFCs) which executed well on book growth and diversification, while maintaining good credit quality during the year.

At the other end of the spectrum, Cognizant Technology Solutions, Dabur India and Restaurant Brands Asia were among the weaker performers. IT services like Cognizant were generally hurt by softening demand, especially from the U.S. Consumption stocks like Dabur and Restaurant Brands were impacted by a lack of revival in consumer demand in their specific categories.

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			47



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MINDX)		8.68%		23.10%		9.41%		8.62%		11.65%		10.28%			10/31/05
Institutional Class (MIDNX)		8.75%		23.32%		9.56%		8.77%		11.83%		6.78%			10/29/10
S&P Bombay Stock Exchange 100 Index³		11.38%		22.44%		13.20%		12.39%		11.65%		10.78%	⁵
MSCI India Index⁴		11.98%		21.29%		12.43%		12.12%		10.08%		9.76%	⁵

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.

Performance results include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

It is not possible to invest directly in an index. Source: Index data from S&P BSE 100 Index and Bloomberg; total return calculations performed by BNY Mellon Investment Servicing (US) Inc. Please see page 71 for index definition.

Calculated from 10/31/05.



TOP TEN HOLDINGS⁶
Name	Sector	% Net Assets
HDFC Bank, Ltd.	Financials		6.0%
Shriram Finance, Ltd.	Financials		5.5%
Reliance Industries, Ltd.	Energy		5.3%
ICICI Bank, Ltd.	Financials		4.9%
Infosys, Ltd.	Information Technology		3.9%
Neuland Laboratories, Ltd.	Health Care		3.7%
IndusInd Bank, Ltd.	Financials		3.2%
Axis Bank, Ltd.	Financials		3.1%
Tata Consultancy Services, Ltd.	Information Technology		3.0%
Bharat Heavy Electricals, Ltd.	Industrials		2.2%
% OF ASSETS IN TOP 10			40.8%

Holdings may combine more than one security from same issuer and related depositary receipts.


48		MATTHEWS ASIA FUNDS



COUNTRY ALLOCATION (%)⁷
India			103.3
Liabilities in Excess of Cash and Other Assets			-3.3



SECTOR ALLOCATION (%)⁷
Financials			34.2
Information Technology			14.1
Consumer Discretionary			12.7
Industrials			11.8
Health Care			9.7
Consumer Staples			9.0
Energy			5.3
Materials			4.5
Utilities			1.0
Real Estate			0.8
Communication Services			0.2
Liabilities in Excess of Cash and Other Assets			-3.3



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			42.5
Large Cap ($10B–$25B)			16.7
Mid Cap ($3B–10B)			26.7
Small Cap (under $3B)			17.4
Liabilities in Excess of Cash and Other Assets			-3.3

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews India Fund

Portfolio Manager Commentary (unaudited) (continued)

Notable Portfolio Changes

This year, we sought to improve our holdings in sectors like consumer discretionary and staples and invested in names where growth visibility is higher. To that extent we initiated a position in Sona BLW Precision Forgings. The company’s differentiated capabilities in auto components, especially for electric vehicles (EV), gives it a sustainable competitive advantage, we believe, and hence has a long runway for growth. We exited our position in Bosch, the Indian arm of German automotive supplier Robert Bosch, as we felt the company’s growth trajectory was stagnating and the technological edge globally was not translating into business momentum in India. Similarly, we exited Dabur India which we believe has become a growth laggard within the staples space and there is no visibility on why that might change in the future.

Elsewhere, we initiated a position in Mahindra & Mahindra Financial Services to leverage the trend of NBFCs growing strongly in a strong credit growth cycle, with improving asset quality. We also exited our position in Crompton Greaves, driven by findings from our primary research process which suggested a breakdown in sales and marketing strategy and internal turmoil due to employee attrition at all levels.

Outlook

We remain optimistic about the near-term outlook for India. Inflation and interest rates have peaked out and future actions by the Indian central bank on interest rates or on liquidity should boost growth, we believe in the coming year. The government should continue its infrastructure related spend, in our view, albeit with a hiatus of few months around the elections. We believe consumption growth should also come back sooner rather than later as the prior year’s base becomes more favorable and real income growth returns. We prefer domestic sectors like real estate, utilities and financial services and other sectors like manufacturing where there are clear tailwinds from China +1 strategies among multinational companies.

We believe the government’s focus on establishing India as a manufacturing hub, to replace imports and to tap export opportunities, will continue and may even gather steam as global volatility increase. Sectors like auto and chemicals are well poised to benefit from this.

Residential real estate is in the midst of an extended up-cycle which will benefit housing developers and ancillary companies. Stricter regulations and consolidation on the supply side over the last decade has led to a much cleaner property market in India with many more investment opportunities now available.

India is also embarking on a massive power capacity augmentation over the next decade, most of which will be renewable. For this year we see growth in domestic demand for energy and the need for energy security will be strong narratives for utility and renewables companies. Global macro volatility will impact India but to a lesser extent than many other economies. All in all, unless there are any major external or internal shocks, we believe India should have another good year in terms of economic growth and stock market performance.


				matthewsasia.com \| 800.789.ASIA			49

Matthews India Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 103.3%


	Shares		Value

FINANCIALS: 34.2%
Banks: 21.8%
HDFC Bank, Ltd.		2,234,599		$45,755,697

ICICI Bank, Ltd.		3,150,983		37,653,612

IndusInd Bank, Ltd.		1,273,549		24,446,042

Axis Bank, Ltd.		1,805,785		23,898,435

Federal Bank, Ltd.		8,772,923		16,448,793

Kotak Mahindra Bank, Ltd.		589,720		13,511,991

Bandhan Bank, Ltd.^b,c		1,671,073		4,842,665

				166,557,235


Consumer Finance: 10.4%

Shriram Finance, Ltd.		1,692,005		41,737,938

Cholamandalam Investment and Finance Co., Ltd.		991,091		14,990,678

Bajaj Finance, Ltd.		153,487		13,505,528

Mahindra & Mahindra Financial Services, Ltd.		2,803,846		9,315,378

				79,549,522


Insurance: 1.2%
PB Fintech, Ltd.^d		968,136		9,236,194


Financial Services: 0.8%
LIC Housing Finance, Ltd.		903,059		5,812,586

Total Financials				261,155,537



INFORMATION TECHNOLOGY: 14.1%
IT Services: 12.4%

Infosys, Ltd.		1,598,241		29,584,214

Tata Consultancy Services, Ltd.		501,216		22,827,331

LTIMindtree, Ltd.^b,c		179,378		13,554,576

Persistent Systems, Ltd.		128,666		11,412,683

HCL Technologies, Ltd.		495,830		8,725,994

Coforge, Ltd.		111,337		8,385,883

				94,490,681


Electronic Equipment, Instruments & Components: 1.1%

Syrma SGS Technology, Ltd.		528,687		4,260,112

Kaynes Technology India, Ltd.^d		134,302		4,211,283

				8,471,395


Software: 0.4%
Newgen Software Technologies, Ltd.		166,455		3,122,276


Communications Equipment: 0.2%
Tejas Networks, Ltd.^b,c,d		146,797		1,533,591

Total Information Technology				107,617,943



CONSUMER DISCRETIONARY: 12.7%
Automobiles: 5.7%

Bajaj Auto, Ltd.		185,341		15,134,880

TVS Motor Co., Ltd.		586,995		14,283,311

Maruti Suzuki India, Ltd.		82,926		10,260,480

Tata Motors, Ltd.		426,456		3,995,301

				43,673,972


	Shares		Value
Textiles, Apparel & Luxury Goods: 2.5%

Titan Co., Ltd.		384,115		$16,953,683

Vedant Fashions, Ltd.		125,529		1,912,643

				18,866,326


Automobile Components: 1.7%

Sona Blw Precision Forgings, Ltd.^b,c		1,076,178		8,329,023

Divgi Torqtransfer Systems, Ltd.		377,996		4,455,028

				12,784,051


Specialty Retail: 1.4%

FSN E-Commerce Ventures, Ltd.^d		2,704,219		5,649,286

Shankara Building Products, Ltd.		633,900		5,435,401

				11,084,687


Hotels, Restaurants & Leisure: 1.4%

Restaurant Brands Asia, Ltd.^d		5,740,194		7,705,498

Lemon Tree Hotels, Ltd.^b,c,d		1,840,899		2,649,674

				10,355,172

Total Consumer Discretionary				96,764,208



INDUSTRIALS: 11.8%
Machinery: 3.8%

Cummins India, Ltd.		555,215		13,096,470

Thermax, Ltd.		319,012		11,804,696

Ashok Leyland, Ltd.		1,784,118		3,889,690

				28,790,856


Electrical Equipment: 2.9%

Bharat Heavy Electricals, Ltd.		7,304,281		16,974,859

Schneider Electric Infrastructure, Ltd.^d		541,338		2,660,045

ABB India, Ltd.		44,858		2,519,247

				22,154,151


Construction & Engineering: 2.1%

Sterling and Wilson Renewable Energy, Ltd.^c,d		1,751,469		9,087,854

Voltas, Ltd.		581,875		6,837,345

				15,925,199


Transportation Infrastructure: 1.4%
Gujarat Pipavav Port, Ltd.		5,852,399		10,756,588


Professional Services: 1.1%
Latent View Analytics, Ltd.^d		1,602,994		8,753,386


Building Products: 0.5%
Astral, Ltd.		168,043		3,850,000

Total Industrials				90,230,180



HEALTH CARE: 9.7%
Pharmaceuticals: 5.2%

Neuland Laboratories, Ltd.		449,244		28,558,022

Sun Pharmaceutical Industries, Ltd.		574,905		8,697,084

Laurus Labs, Ltd.^b,c		529,007		2,734,087

				39,989,193


Health Care Equipment & Supplies: 2.0%
Poly Medicure, Ltd.		840,567		15,049,926


50		MATTHEWS ASIA FUNDS

Matthews India Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value
Life Sciences Tools & Services: 1.8%

Syngene International, Ltd.^b,c		952,851		$8,027,719

Divi’s Laboratories, Ltd.		118,076		5,536,057

				13,563,776


Health Care Providers & Services: 0.7%
Metropolis Healthcare, Ltd.^b,c		265,457		5,351,211

Total Health Care				73,954,106



CONSUMER STAPLES: 9.0%
Food Products: 4.5%

Nestle India, Ltd.		44,789		14,299,798

Britannia Industries, Ltd.		222,092		14,243,686

Tata Consumer Products, Ltd.		457,443		5,971,328

				34,514,812


Personal Care Products: 4.5%

Hindustan Unilever, Ltd.		401,420		12,844,373

Godrej Consumer Products, Ltd.		770,417		10,469,101

Honasa Consumer, Ltd.^d^,^†		1,608,737		8,521,804

Bajaj Consumer Care, Ltd.		758,095		1,999,973

				33,835,251

Total Consumer Staples				68,350,063



ENERGY: 5.3%
Oil, Gas & Consumable Fuels: 5.3%
Reliance Industries, Ltd.		1,303,427		40,455,704

Total Energy				40,455,704



MATERIALS: 4.5%
Chemicals: 2.2%

PI Industries, Ltd.		209,510		8,848,895

Asian Paints, Ltd.		189,336		7,737,512

				16,586,407


Construction Materials: 1.3%

UltraTech Cement, Ltd.		46,388		5,851,903

Ramco Cements, Ltd.		336,785		4,127,269

				9,979,172


Metals & Mining: 1.0%
APL Apollo Tubes, Ltd.		411,226		7,589,766

Total Materials				34,155,345



UTILITIES: 1.0%
Independent Power and Renewable Electricity Producers: 1.0%
NTPC, Ltd.		2,021,568		7,552,660

Total Utilities				7,552,660



REAL ESTATE: 0.8%
Real Estate Management & Development: 0.8%
DLF, Ltd.		697,280		6,080,854

Total Real Estate				6,080,854


	Shares		Value

COMMUNICATION SERVICES: 0.2%
Diversified Telecommunication Services: 0.2%
HFCL, Ltd.		1,830,367		$1,850,031

Total Communication Services				1,850,031



TOTAL COMMON EQUITIES				788,166,631

(Cost $602,476,869)

NON-CONVERTIBLE CORPORATE BONDS: 0.0%

	Face Amount^*

CONSUMER STAPLES: 0.0%
Food Products: 0.0%
Britannia Industries, Ltd., Series N3 5.500%, 06/03/24		INR 1,996,476		23,704

Total Consumer Staples				23,704



TOTAL NON-CONVERTIBLE CORPORATE BONDS				23,704

(Cost $27,434)


TOTAL INVESTMENTS: 103.3%				788,190,335
(Cost $602,504,303)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (3.3%)				(25,064,959	)


NET ASSETS: 100.0%				$763,125,376

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Non-income producing security.

^†	As of December 31, 2023, 308,660 shares of Honasa Consumer, Ltd. were restricted from sale as part of an anchor investment agreement. That restriction expired on February 4, 2024.

*	All Values in USD unless otherwise specified.

INR	Indian Rupee

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			51

LOGO


PORTFOLIO MANAGERS

Shuntaro Takeuchi	Donghoon Han
Lead Manager	Lead Manager

FUND FACTS

	Investor	Institutional
Ticker	MJFOX	MIJFX
CUSIP	577130800	577130792
Inception	12/31/98	10/29/10
NAV	$17.58	$17.63
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.09%	1.02%
Portfolio Statistics
Total # of Positions		43
Net Assets		655.5 million
Weighted Average Market Cap		$49.2 billion
Portfolio Turnover²		100.6%
Benchmark
MSCI Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews Japan Fund

Portfolio Manager Commentary (unaudited)

For the year ending December 31, 2023, the Matthews Japan Fund returned 17.99% (Investor Class) and 18.08% (Institutional Class), while its benchmark, the MSCI Japan Index, returned 20.77% over the same period. For the fourth quarter, the Fund returned 8.25% (Investor Class) and 8.29% (Institutional Class), while the benchmark returned 8.22%.

Market Environment

Japan equity markets posted healthy total returns in 2023, along with other developed markets, outpacing emerging markets. Japanese stocks’ outperformance was mainly driven by resilient earnings growth amid a tepid global macro economy. Valuation levels also moved up from the low end to the midpoint of the past 10-year historical range, helped by government policy and activist pressure which pushed undervalued companies to increase their payouts and buybacks.

The direction of interest rates and risk premiums in 2023 was a seesaw between hopes for the U.S. Federal Reserve’s pace of rate hike slowing down. The discussion of rates being ‘higher for longer,’ spurred a risk-off move across global markets for the third quarter, and U.S. 10-year bond yields reached 5% in October for the first time in 2008. Sentiment improved toward the end of the year as investors responded to evidence of softening in global growth and an easing in inflationary pressures. For the full year, the MSCI Japan Value Index outpaced the MSCI Japan Growth Index by 661 basis points (6.61%), reflecting the general rise in interest rates.

The Japanese yen generally traded in a range bound for the first six months of the year but in the third quarter, as U.S. 10-year bond yields rose, the currency weakened back to its 27-year low of 150 yen to the U.S. dollar.

Performance Contributors and Detractors

The portfolio’s overweight to small caps relative to the benchmark resulted in the majority of the detraction while positive stock selection in all market cap spectrums offset the allocation effect. From a sector perspective, stock selection in materials and consumer staples were the two largest contributors to relative performance while stock selection in financials and industrials were the biggest detractors.

At the holdings level, Shin-Etsu Chemical and Renesas Electronics were the top two contributors to both the Fund’s total and relative returns. The share price of semiconductor company Renesas Electronics faced some profit taking in the third quarter, but we continue to view positively the company’s ongoing progress in inventory adjustments as it shows the company’s solid execution during downturns. We continue to see Renesas constructively as its valuation level remains compelling.

Polyvinyl chloride and semiconductor wafer manufacturer Shin-Etsu Chemical’s main businesses faced a downturn through the housing and semiconductor cycle, but the company once again displayed its capability to maneuver slowdowns, maintaining its high-capacity utilization rate and adhering to long-term agreements with key customers.

The largest detractor to the portfolio’s relative returns was Tokyo Electron, a semiconductor production equipment company. Our position size was well below the benchmark; however, at the portfolio level, we were able to benefit from overweighting semiconductor-related sectors. Debt guarantor eGuarantee was the second-largest detractor to investment results. Although the company continues to execute and generate strong earnings growth, COVID-related relief funds that saved many institutions from bankruptcy led to a slower-than-expected rise in bankruptcy numbers in Japan. We have already exited from this position.

Notable Portfolio Changes

During the December quarter, we made three major changes to the portfolio. First, with foreign investor flows turning positive for the first time in five years, we

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


52		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MJFOX)		8.25%		17.99%		-5.84%		6.45%		5.55%		5.54%			12/31/98
Institutional Class (MIJFX)		8.29%		18.08%		-5.78%		6.49%		5.63%		7.47%			10/29/10
MSCI Japan Index³		8.22%		20.77%		1.04%		7.31%		5.34%		3.89%	⁴

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 12/31/98.



TOP TEN HOLDINGS⁵
Name	Sector	% Net Assets
Shin-Etsu Chemical Co., Ltd.	Materials		5.6%
Keyence Corp.	Information Technology		4.8%
Tokio Marine Holdings, Inc.	Financials		4.1%
Sony Group Corp.	Consumer Discretionary		3.9%
Hitachi, Ltd.	Industrials		3.7%
Renesas Electronics Corp.	Information Technology		3.4%
Recruit Holdings Co., Ltd.	Industrials		3.0%
FUJIFILM Holdings Corp.	Information Technology		2.9%
Suzuki Motor Corp.	Consumer Discretionary		2.9%
Ajinomoto Co., Inc.	Consumer Staples		2.8%
% OF ASSETS IN TOP 10			37.1%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			53

Matthews Japan Fund

Portfolio Manager Commentary (unaudited) (continued)

shifted our portfolio’s average market cap upwards. Second, we reduced multiple positions that worked as a “value play” within the portfolio, especially names where the majority of the returns were from pure re-ratings. Third, as the global purchase manufacturing index (PMI) stayed below 50 for the full 12 months of 2023, we started to look for names whose fundamentals are set to bottom out as we look toward 2024 and beyond. We took advantage of the market correction in October to initiate some cyclical growth names.

We initiated a position in real estate developer Mitsui Fudosan. We believe the company will continue to produce steady mid-single digit growth from vacancy rates peaking out in central Tokyo. We also look forward to its new management’s stance towards achieving optimal return on equity through asset sales.

We have also re-initiated a position in medical device manufacturer Terumo. After meeting with the management team, we have built a conviction that multiple headwinds such as rising raw materials and logistics and manufacturing cost inflation have started to peak out. Terumo has also taken numerous steps, from shifting its manufacturing locations to raising prices. We initiated our position when the company’s valuation level was in the lower end of its 10-year range.

To fund these positions, we exited several holdings including Amvis, Asahi Intecc, Bandai Namco, Baycurrent Consulting, Denso, Dip and eGuarantee.

Outlook

After a strong finish to the close of 2023, the MSCI Japan Index is trading at 14.7x forward 12 months price-to-earnings ratio and 1.42x price-to-book ratio with a 2.24% dividend yield. Valuations have risen compared to 2022 year-end but still look sensible in an international context. Along with the long-term trend of corporate Japan achieving better through-the-cycle margins, recent activist investor activity is working as a clear catalyst for the corporate sector to further enhance shareholder returns via dividends and share buybacks.

Over the long term, we continue to believe the earnings capability of Japanese companies has improved meaningfully over the past economic cycle. As of year-end 2023, the Japanese equity market outperformed both the MSCI EAFE Index and the MSCI Emerging Markets Index in U.S. dollar terms. In other words, ‘not owning Japan’ is no longer a formula for outperformance for global investors. With the yen at a near quarter-century-low to the dollar, Japanese companies are in good health and domestically, a full year of reopening has resulted in record spending despite tourist numbers still below pre-COVID levels. We continue to believe there is a major perception and positioning gap of the Japanese equity market as an asset class in the global market context.

Overall, Japan continues to enjoy several tailwinds including a positive earnings cycle driven by moderate inflation, meaningful wage gains and policy driven reforms which are pushing companies to increase their corporate value via capital efficiencies and shareholder payouts. In addition, the recovery in inbound tourism plus the fact that Japan lacks the geopolitical headwinds of China is creating positive foreign inflows. 2023 saw an inflow of 3.2 trillion yen from foreign investors. While this is not small, it is only a fraction of the of the 11.8 trillion yen foreign investor outflow in the previous five-year period (2018-2022).

Our strategy continues to focus on investing in companies that can grow earnings through a relentless effort to achieve positive margin slope (long-term improvement in corporate margin levels). We are strong believers that these companies will be able to generate incremental returns over the long term. In sub-industries, we continue to be constructive in areas such as semiconductors, automation, software, healthcare service and technology, as well as global intellectual property (IP) owners.



COUNTRY ALLOCATION (%)⁶
Japan			97.4
Cash and Other Assets, Less Liabilities			2.6



SECTOR ALLOCATION (%)⁶
Information Technology			22.0
Industrials			20.9
Consumer Discretionary			20.1
Financials			10.6
Materials			6.3
Health Care			5.7
Consumer Staples			5.0
Communication Services			4.3
Real Estate			2.5
Cash and other Assets, Less Liabilities			2.6



MARKET CAP EXPOSURE (%)⁶
Mega Cap (over $25B)			50.3
Large Cap ($10B–$25B)			28.2
Mid Cap ($3B–10B)			15.8
Small Cap (under $3B)			3.1
Cash and Other Assets, Less Liabilities			2.6

6	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


54		MATTHEWS ASIA FUNDS

Matthews Japan Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 97.4%


	Shares		Value

INFORMATION TECHNOLOGY: 22.0%
Semiconductors & Semiconductor Equipment: 8.0%
Renesas Electronics Corp.^b		1,240,300		$22,177,762

Disco Corp.		68,000		16,793,743

Tokyo Electron, Ltd.		76,900		13,668,196

				52,639,701


IT Services: 5.5%
OBIC Co., Ltd.		89,400		15,381,723

NEC Corp.		258,800		15,291,499

Nomura Research Institute, Ltd.		180,400		5,239,309

				35,912,531


Electronic Equipment, Instruments & Components: 4.9%
Keyence Corp.		72,300		31,765,473


Technology Hardware, Storage & Peripherals: 2.9%
FUJIFILM Holdings Corp.		317,300		19,015,720


Software: 0.7%
Appier Group, Inc.^b		370,400		4,836,885

Total Information Technology				144,170,310



INDUSTRIALS: 20.9%
Industrial Conglomerates: 5.9%
Hitachi, Ltd.		338,700		24,362,601

Hikari Tsushin, Inc.		88,300		14,593,247

				38,955,848


Trading Companies & Distributors: 5.7%
ITOCHU Corp.		368,300		15,004,487

Mitsubishi Corp.		889,200		14,164,303

Toyota Tsusho Corp.		144,700		8,491,313

				37,660,103


Professional Services: 3.0%
Recruit Holdings Co., Ltd.		463,000		19,358,556


Electrical Equipment: 2.8%
Mitsubishi Electric Corp.		1,284,700		18,170,906


Construction & Engineering: 2.0%
Kajima Corp.		779,100		12,990,865


Commercial Services & Supplies: 1.5%
TOPPAN Holdings, Inc.		347,000		9,663,822

Total Industrials				136,800,100



CONSUMER DISCRETIONARY: 20.1%
Automobiles: 4.8%
Suzuki Motor Corp.		438,900		18,704,406

Toyota Motor Corp.		711,200		13,031,830

				31,736,236


Broadline Retail: 4.4%
Pan Pacific International Holdings Corp.		655,100		15,594,307

Isetan Mitsukoshi Holdings, Ltd.		1,225,700		13,308,860

				28,903,167


	Shares		Value
Specialty Retail: 4.3%
Fast Retailing Co., Ltd.		57,700		$14,267,992

ZOZO, Inc.		610,400		13,776,201

				28,044,193


Household Durables: 3.9%
Sony Group Corp.		270,300		25,579,277


Hotels, Restaurants & Leisure: 1.4%
Kyoritsu Maintenance Co., Ltd.		213,900		9,071,432


Textiles, Apparel & Luxury Goods: 1.3%
Asics Corp.		261,400		8,159,945

Total Consumer Discretionary				131,494,250



FINANCIALS: 10.6%
Insurance: 4.0%
Tokio Marine Holdings, Inc.		1,066,500		26,556,910


Banks: 2.5%
Mitsubishi UFJ Financial Group, Inc.		1,916,400		16,446,806


Financial Services: 2.4%
ORIX Corp.		844,100		15,853,198


Consumer Finance: 1.7%
Credit Saison Co., Ltd.		593,400		10,903,775

Total Financials				69,760,689



MATERIALS: 6.3%
Chemicals: 6.3%
Shin-Etsu Chemical Co., Ltd.		874,500		36,574,358
Mitsui Chemicals, Inc.		166,100		4,911,910

Total Materials				41,486,268



HEALTH CARE: 5.7%
Pharmaceuticals: 3.4%
Daiichi Sankyo Co., Ltd.		339,700		9,299,874

Astellas Pharma, Inc.		545,000		6,481,833

Sawai Group Holdings Co., Ltd.		169,400		6,249,476

				22,031,183


Health Care Equipment & Supplies: 2.3%
Terumo Corp.		471,600		15,421,796

Total Health Care				37,452,979



CONSUMER STAPLES: 5.0%
Food Products: 5.0%
Ajinomoto Co., Inc.		482,600		18,577,122
Nissin Foods Holdings Co., Ltd.		406,200		14,184,436

Total Consumer Staples				32,761,558



COMMUNICATION SERVICES: 4.3%
Wireless Telecommunication Services: 2.0%
KDDI Corp.		402,900		12,779,386


Entertainment: 1.5%
Capcom Co., Ltd.		305,300		9,852,252


Diversified Telecommunication Services: 0.8%
Internet Initiative Japan, Inc.		265,700		5,421,033

Total Communication Services				28,052,671


				matthewsasia.com \| 800.789.ASIA			55

Matthews Japan Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value

REAL ESTATE: 2.5%
Real Estate Management & Development: 2.5%
Mitsui Fudosan Co., Ltd.		668,900		$16,354,407

Total Real Estate				16,354,407



TOTAL INVESTMENTS: 97.4%				638,333,232
(Cost $546,054,623)


CASH AND OTHER ASSETS, LESS LIABILITIES: 2.6%				17,164,777


NET ASSETS: 100.0%				$655,498,009

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Non-income producing security.

See accompanying notes to financial statements.


56		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Robert J. Horrocks, PhD				Kenneth Lowe, CFA
Lead Manager				Lead Manager

Siddarth Bhargava				Elli Lee
Co-Manager				Co-Manager



FUND FACTS

	Investor	Institutional
Ticker	MACSX	MICSX
CUSIP	577130206	577130842
Inception	9/12/94	10/29/10
NAV	$12.57	$12.54
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.15%	1.02%
Portfolio Statistics
Total # of Positions		45
Net Assets		$324.5 million
Weighted Average Market Cap		$120.1 billion
Portfolio Turnover²		12.0%
Benchmark
MSCI AC Asia ex Japan Index

OBJECTIVE

Long-term capital appreciation. The Fund also seeks to provide some current income.

STRATEGY

Under normal circumstances, the 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 common stock, preferred stock and other equity securities, and convertible securities as well as fixed-income securities, of any duration or quality, including high yield securities, of companies located in Asia, which consists of all countries and markets in Asia, including developed, emerging and frontier countries and markets in the Asian region.

Matthews Asian Growth and Income Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Asian Growth and Income Fund returned 3.33% (Investor Class) and 3.39% (Institutional Class), while its benchmark, the MSCI All Country Asia ex Japan Index, returned 6.34% over the same period. For the fourth quarter, the Fund returned 6.10% (Investor Class) and 6.10% (Institutional Class), while the benchmark returned 6.48%.

Market Environment

Asian markets rallied during the final quarter of the year, helping drive full-year performance into positive territory although lagging behind the returns of other major geographies. The year started brightly with the hope of a strong recovery in the Chinese economy after reopening from prior COVID restrictions. This was, however, short lived with markets in China peaking in January and then ending the year down double digits. Issues such as the challenged property market, soft consumer sentiment, regulatory changes, dampened animal spirits and geopolitical tensions all weighed on China as the market ended the year at around 9x earnings. Elsewhere in the region, India was again a strong performer rising over 20% as it benefited in part from capital flows as earnings delivery was robust while the political and monetary outlooks also appear supportive. The technology heavy markets of South Korea and Taiwan also made meaningful gains in 2023.

Performance Contributors and Detractors

At the country level, the portfolio’s underweights in India and Taiwan as well as stock selections in those markets were the biggest detractors to relative returns in 2023, in part because these markets outperformed the broader region. Stock selection within Thailand and an underweight to South Korea also hindered relative performance. Conversely, the portfolio’s off-benchmark positions in the U.S. and Australia were significant contributors to relative returns as these markets delivered reasonable returns while the portfolio’s stocks in these geographies gained meaningfully. Despite the negative of an overweight in China/Hong Kong, stock selection there helped relative performance, as did stock selection within Indonesia.

At the sector level, stock selection in the areas of consumer discretionary and financials detracted from relative performance. On the other hand, stock selection within real estate and industrials contributed.

At the holdings level, one of the largest detractors to relative performance for the year was Chinese auto dealership company Zhongsheng Group. The stock’s drop may have been driven by concerns around new car margins as well as overall new car sale volumes. JD.com, a major internet retailer in China, also fell significantly, likely given the backdrop of a soft consumer as well as rising competitive intensity in the industry. Digital Telecommunications Infrastructure Fund in Thailand, an entity that owns telecom infrastructure, detracted from returns as concerns exist around rising interest rates and the possibility of reduced leases. Leading regional life insurer AIA Group also detracted. Although the company continued to deliver what we believe was robust value of new business growth, the stock was weak. This is potentially due to concerns over the growth and margin profile of its expansion in China combined with overall negative sentiment for the market.

On the other hand, the largest contributor to relative performance was semiconductor and infrastructure software company Broadcom. The stock rose significantly during the year as earnings increased by double digits with management stating this was “driven by investments in accelerators and network connectivity

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


				matthewsasia.com \| 800.789.ASIA			57



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MACSX)		6.10%		3.33%		-5.53%		2.78%		1.81%		7.61%			9/12/94
Institutional Class (MICSX)		6.10%		3.39%		-5.42%		2.92%		1.95%		3.05%			10/29/10
MSCI AC Asia ex Japan Index³		6.48%		6.34%		-6.43%		4.01%		4.17%		4.13%	⁴



INCOME DISTRIBUTION HISTORY
	2023						2022
	June		December		Total		June		December		Total
Investor (MACSX)	$	0.17	$	0.18	$	0.34	$	0.08	$	0.13	$	0.21
Inst’l (MICSX)	$	0.17	$	0.19	$	0.36	$	0.09	$	0.14	$	0.23

Note: This table does not include capital gains distributions. Totals may differ by $0.02 due to rounding. For income distribution history, visit matthewsasia.com.

30-DAY YIELD:

2.82% (Investor Class); 2.79% (Institutional Class)

The 30-Day Yield represents net investment income earned by the Fund over the 30-day period ended 12/31/23, expressed as an annual percentage rate based on the Fund’s share price at the end of the 30-day period. The 30-Day Yield should be regarded as an estimate of the Fund’s rate of investment income, and it may not equal the Fund’s actual income distribution rate.

Source: BNY Mellon Investment Servicing (US) Inc.

DIVIDEND YIELD: 3.47%

The dividend yield (trailing) for the portfolio is the weighted average sum of the dividends paid by each equity security held by the Fund over the 12 months ended 12/31/23 divided by the current price of each equity as of 12/31/23. The annualized dividend yield for the Fund is for the equity-only portion of the portfolio. Please note that this is based on gross equity portfolio holdings and does not reflect the actual yield an investor in the Fund would receive. Past yields are no guarantee of future yields.

Source: FactSet Research Systems, Bloomberg, MICM

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 8/31/94.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		8.4%
AIA Group, Ltd.	Financials	China/Hong Kong		4.7%
HDFC Bank, Ltd.	Financials	India		4.5%
Tencent Holdings, Ltd.	Communication Services	China/Hong Kong		4.2%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		3.6%
Pharmaron Beijing Co., Ltd., Cnv., 0.000%, 06/18/2026	Health Care	China/Hong Kong		2.6%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		2.5%
Tata Consultancy Services, Ltd.	Information Technology	India		2.5%
Macquarie Korea Infrastructure Fund	Financials	South Korea		2.5%
HKT Trust & HKT, Ltd.	Communication Services	China/Hong Kong		2.4%
% OF ASSETS IN TOP 10				37.9%

Holdings may combine more than one security from same issuer and related depositary receipts.


58		MATTHEWS ASIA FUNDS

Matthews Asian Growth and Income Fund

Portfolio Manager Commentary (unaudited) (continued)

for AI by hyperscalers.” The company also completed the major acquisition of VMware. Chinese games company Netease gained over the full year despite concerns at year end around potential new regulations that may impact monetization. This was, to an extent, likely due to strong operational delivery coming in part from a solid game portfolio that includes newer titles as well as robust cost control. Australian gaming content and machine company Aristocrat Leisure rallied during the year. Solid earnings growth alongside the potential of its entry into real money gaming may have helped the stock perform. Elsewhere in technology, industry behemoths TSMC and Samsung gained and were significant contributors to total returns.

Notable Portfolio Changes

We added new positions in a convertible bond of Xero Investments Ltd., a New Zealand-listed cloud-based accounting software company, in two convertible bonds of Taiwanese connector business Bizlink, and in an exchangeable bond of Straits Trading Co. that could convert into ESR Group. These were added as we believe that they are offerings in solid companies with robust credit quality that also offer attractive terms including reasonable yields.

During the year, we exited our equity holdings in CK Hutchison, Venture Corp., and Sanofi India. Beyond this, a holding in a convertible bond of ESR Group was put back to the company while a convertible bond in China Conch Venture also matured.

Outlook

Monetary policy expectations for the U.S. in 2024 have changed meaningfully in recent months, with hopes that interest rates have peaked and that cuts will return. This helped to propel markets upward as 2023 drew to a close and the trajectory of these alterations, in conjunction with how contained inflation actually is and whether the U.S. can attain a soft landing, will all play a role in determining market movements over the next year. These will also, in part, determine stock prices in Asia in the near term as it may allow some easing while the U.S. dollar could also be impacted. Beyond this, we continue to remain concerned about the challenges that China faces within its own economy as well as broader geopolitical tensions that appear to be structural in nature. While these are reasons for caution there are also reasons to be constructive; weak sentiment, policy flexibility, appealing valuations and an earnings base that companies have potential to grow from, being a few. In India, although valuations are expensive, structural earnings growth appears intact while Taiwan and Korea are also expected to grow reasonably in 2024.

Given what may be a peak in the cost of capital, robust valuations of 12x FY24 earnings and EPS growth expected to be over 19% for the region in 2024, the outlook for Asia appears solid although scope for volatility remains. We continue to think that a focus on investing in what we believe to be quality companies at reasonable prices that also generally provide some form of current income is well placed to deliver for clients over the long term.



COUNTRY ALLOCATION (%)^6,7
China/Hong Kong			40.0
Taiwan			14.5
India			12.0
South Korea			9.6
Singapore			7.8
France			3.5
Indonesia			2.5
Philippines			1.9
New Zealand			1.7
Thailand			1.6
United States			1.5
Australia			1.3
Cash and other Assets, Less Liabilities			2.2



SECTOR ALLOCATION (%)⁷
Financials			21.9
Information Technology			21.5
Communication Services			11.8
Consumer Discretionary			11.5
Industrials			10.9
Consumer Staples			5.8
Real Estate			5.3
Health Care			3.9
Utilities			3.3
Materials			1.8
Cash and other Assets, Less Liabilities			2.2



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			50.1
Large Cap ($10B–$25B)			16.8
Mid Cap ($3B–10B)			19.1
Small Cap (under $3B)			11.8
Cash and Other Assets, Less Liabilities			2.2



ASSET TYPE BREAKDOWN (%)^7,8
Common Equities and ADRs			89.6
Convertible Corporate Bonds			8.1
Cash and Other Assets, Less Liabilities			2.2

6	Not all countries where the Fund may invest are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

8	Bonds are not included in the MSCI All Country Asia ex Japan Index.


				matthewsasia.com \| 800.789.ASIA			59

Matthews Asian Growth and Income Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 89.7%


	Shares		Value

CHINA/HONG KONG: 37.4%
AIA Group, Ltd.		1,768,000		$15,386,696

Tencent Holdings, Ltd.		362,300		13,678,590

HKT Trust & HKT, Ltd.		6,606,000		7,887,090

Inner Mongolia Yili Industrial Group Co., Ltd. A Shares		1,925,875		7,232,726

Midea Group Co., Ltd. A Shares		915,430		7,020,415

NetEase, Inc. ADR		63,496		5,915,287

Link REIT		1,049,540		5,893,225

NARI Technology Co., Ltd. A Shares		1,878,190		5,881,504

Wuliangye Yibin Co., Ltd. A Shares		296,674		5,845,201

BOC Hong Kong Holdings, Ltd.		2,085,000		5,663,958

JD.com, Inc. Class A		386,652		5,584,450

Guangdong Investment, Ltd.		7,464,000		5,432,778

Techtronic Industries Co., Ltd.		450,500		5,367,749

ENN Natural Gas Co., Ltd. A Shares		2,258,377		5,330,383

Yum China Holdings, Inc.		124,408		5,278,631

Jiangsu Expressway Co., Ltd. H Shares		5,862,000		5,274,600

Zhongsheng Group Holdings, Ltd.		1,841,000		4,409,621

Qingdao Haier Biomedical Co., Ltd. A Shares		746,692		4,245,511

Total China/Hong Kong				121,328,415



TAIWAN: 12.6%
Taiwan Semiconductor Manufacturing Co., Ltd.		1,423,187		27,284,703

Chailease Holding Co., Ltd.		1,073,703		6,746,878

Advantech Co., Ltd.		557,078		6,741,425

Total Taiwan				40,773,006



INDIA: 12.0%
HDFC Bank, Ltd.		717,197		14,685,341

Tata Consultancy Services, Ltd.		177,362		8,077,757

Computer Age Management Services, Ltd.		173,357		5,519,204

Embassy Office Parks REIT		1,368,465		5,338,928

Crompton Greaves Consumer Electricals, Ltd.		1,423,290		5,315,009

Total India				38,936,239



SOUTH KOREA: 9.6%
Samsung Electronics Co., Ltd.		192,940		11,710,848

Macquarie Korea Infrastructure Fund		829,370		8,009,734

LEENO Industrial, Inc.		36,912		5,776,917

SK Telecom Co., Ltd.		145,910		5,668,586

Total South Korea				31,166,085



SINGAPORE: 5.9%
Singapore Technologies Engineering, Ltd.		2,316,625		6,821,775

United Overseas Bank, Ltd.		292,500		6,313,088

CapitaLand Ascendas REIT		2,652,284		6,080,556

Total Singapore				19,215,419



FRANCE: 3.5%
Pernod Ricard SA		31,736		5,608,444

LVMH Moet Hennessy Louis Vuitton SE		6,902		5,608,131

Total France				11,216,575



INDONESIA: 2.5%

PT Bank Rakyat Indonesia Persero Tbk		21,913,472		8,144,534

Total Indonesia				8,144,534


	Shares		Value

PHILIPPINES: 1.9%

Bank of the Philippine Islands		3,297,776		$6,178,281

Total Philippines				6,178,281



THAILAND: 1.5%

Digital Telecommunications Infrastructure Fund F Shares		22,405,700		5,044,322

Total Thailand				5,044,322



UNITED STATES: 1.5%

Broadcom, Inc.		4,272		4,768,620

Total United States				4,768,620



AUSTRALIA: 1.3%

Aristocrat Leisure, Ltd.		147,098		4,086,902

Total Australia				4,086,902



TOTAL COMMON EQUITIES				290,858,398

(Cost $294,424,289)


CONVERTIBLE CORPORATE BONDS: 8.1%

	Face Amount^*

CHINA/HONG KONG: 2.6%

Pharmaron Beijing Co., Ltd., Cnv. 0.000%, 06/18/26^b		8,900,000		8,544,003

Total China/Hong Kong				8,544,003



TAIWAN: 2.0%
Bizlink Holding, Inc., Cnv. 0.000%, 01/12/27^b		4,200,000		4,196,338

Bizlink Holding, Inc., Cnv. 0.000%, 01/30/28^b		2,000,000		2,157,475

Total Taiwan				6,353,813



SINGAPORE: 1.8%

Straits Trading Co., Ltd., Cnv. 3.250%, 02/13/28^b		SGD 9,000,000		5,947,784

Total Singapore				5,947,784



NEW ZEALAND: 1.7%

Xero Investments, Ltd., Cnv. 0.000%, 12/02/25^b		6,184,000		5,522,312

Total New Zealand				5,522,312



TOTAL CONVERTIBLE CORPORATE BONDS				26,367,912

(Cost $21,445,648)


TOTAL INVESTMENTS: 97.8%				317,226,310
(Cost $315,869,937)


CASH AND OTHER ASSETS, LESS LIABILITIES: 2.2%				7,237,374


NET ASSETS: 100.0%				$324,463,684


60		MATTHEWS ASIA FUNDS

Matthews Asian Growth and Income Fund

December 31, 2023

Schedule of Investments^a (continued)

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

*	All Values in USD unless otherwise specified.

ADR	American Depositary Receipt

Cnv.	Convertible

REIT	Real Estate Investment Trust

SGD	Singapore Dollar

USD	U.S. Dollar

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			61

LOGO


PORTFOLIO MANAGERS

Robert Horrocks, PhD				Kenneth Lowe, CFA
Lead Manager				Lead Manager

Siddarth Bhargava				Winnie Chwang
Co-Manager				Co-Manager

Elli Lee
Co-Manager



FUND FACTS

	Investor	Institutional
Ticker	MAPIX	MIPIX
CUSIP	577125107	577130750
Inception	10/31/06	10/29/10
NAV	$13.70	$13.68
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.10%	0.99%
Portfolio Statistics
Total # of Positions		55
Net Assets		$1.1 billion
Weighted Average Market Cap		$77.5 billion
Portfolio Turnover²		75.9%
Benchmark
MSCI AC Asia Pacific Index

OBJECTIVE

Total return with an emphasis on providing current income.

STRATEGY

Under normal circumstances, the 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. Asia consists of all countries and markets in Asia, and includes developed, emerging and frontier countries and markets in the Asian region. The Fund may also invest in convertible debt and equity securities of companies located in Asia.

Matthews Asia Dividend Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews Asia Dividend Fund returned 4.69% (Investor Class) and 4.77% (Institutional Class), while its benchmark, the MSCI All Country Asia Pacific Index, returned 11.81% over the same period. For the fourth quarter, the Fund returned 7.08% (Investor Class) and 7.04% (Institutional Class), while the benchmark returned 8.00%.

Market Environment

Asia Pacific markets rallied during the final quarter of the year, helping drive full-year performance to a respectable double-digit level although this did lag behind the returns of other major geographies. The year started brightly with the hope of a strong recovery in the Chinese economy—after reopening from prior COVID restrictions—alongside robust performance from other markets. This was, however, short lived for China, with markets there peaking in January and ending the year in negative territory. Issues such as the challenged property market, soft consumer sentiment, regulatory changes, dampened animal spirits and geopolitical tensions all weighed on China as the market ended the year at around 9 x earnings. Much of the rest of the region proved more fruitful for investors during 2023. India was again a strong performer rising over 20% as it benefited in part from capital flows as earnings delivery was robust while the political and monetary outlooks also appear supportive. Japan similarly gained as reasonable earnings growth was accompanied by a continuation of improvements in areas such as corporate governance and shareholder returns. The technology heavy markets of South Korea and Taiwan also made meaningful gains in 2023.

Performance Contributors and Detractors

At the country level, the portfolio’s overweight and stock selection in Hong Kong/China was the largest detractor to total and relative returns in 2023 in part because this market suffered relative to the broader region. Stock selection in Japan also hurt relative performance as did underweights and stock selection in Taiwan and India. Conversely, the portfolio’s off-benchmark position in Vietnam aided relative performance while stock selection in Australia and Indonesia was also positive.

At the sector level, stock selection in consumer discretionary was the biggest detractor to total and relative returns. Stock selection and a slight underweight in industrials also detracted. On the other hand, the portfolio’s stock selection within information technology (IT) was the biggest contributor to total and relative returns despite the negative of a slight underweight position. Allocation and stock selection in utilities and energy also contributed to relative performance.

At the stock level, some of the largest detractors to relative performance for the year came from companies within China. Duty free retailer China Tourism Group Duty Free Corp. was the worst performer and the biggest detractor to returns, potentially due to disappointing earnings as well as the possibility of rising competition in certain markets. Online retailer JD.com also fell significantly, likely given the backdrop of a soft consumer as well as rising competitive intensity in the industry. Logistics and distribution company Milkyway Chemical Supply Chain Service similarly dropped alongside weaker-than expected-earnings while consumer-oriented companies Wuliangye Yibin and Yum China were also detractors amid domestic macro headwinds. For Yum China, there also appear to be worries around competitive pressures.

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


62		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Years		5 Years		10 Years		Since Inception			Inception Date
Investor Class (MAPIX)		7.08%		4.69%		-10.52%		0.89%		2.85%		6.09%			10/31/06
Institutional Class (MIPIX)		7.04%		4.77%		-10.44%		0.99%		2.96%		4.03%			10/29/10
MSCI AC Asia Pacific Index³		8.00%		11.81%		-2.82%		5.70%		4.60%		4.18%	⁴



INCOME DISTRIBUTION HISTORY
	2023										2022
	Q1		Q2		Q3		Q4		Total		Q1		Q2		Q3		Q4		Total
Investor (MAPIX)	$	0.05	$	0.00	$	0.07	$	0.04	$	0.15	$	0.05	$	0.04	$	0.02	$	0.01	$	0.11
Inst’l (MIPIX)	$	0.05	$	0.00	$	0.08	$	0.04	$	0.17	$	0.06	$	0.04	$	0.02	$	0.01	$	0.13

Note: This table does not include capital gains distributions. Totals may differ by $0.02 due to rounding and a return of capital. For distribution history please visit matthewsasia.com.

30-DAY YIELD:

2.45% (Investor Class); 2.10% (Institutional Class)

Source: BNY Mellon Investment Servicing (US) Inc.

DIVIDEND YIELD: 2.97%

Source: FactSet Research Systems, Bloomberg, MICM.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 10/31/06.



TOP TEN HOLDINGS⁵
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		4.7%
ITOCHU Corp.	Industrials	Japan		2.8%
HDFC Bank, Ltd.	Financials	India		2.7%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		2.5%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		2.5%
ORIX Corp.	Financials	Japan		2.4%
AIA Group, Ltd.	Financials	China/Hong Kong		2.3%
Tokio Marine Holdings, Inc.	Financials	Japan		2.3%
Tencent Holdings, Ltd.	Communication Services	China/Hong Kong		2.2%
Shin-Etsu Chemical Co., Ltd.	Materials	Japan		2.2%
% OF ASSETS IN TOP 10				26.6%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			63



COUNTRY ALLOCATION (%)^6,7
Japan			31.9
China/Hong Kong			26.6
Australia			10.4
Taiwan			8.9
India			8.3
South Korea			6.5
Singapore			3.5
Indonesia			2.5
Thailand			1.6
Vietnam			1.5
Bangladesh			0.5
Liabilities in Excess of Cash and Other Assets			-2.2


SECTOR ALLOCATION (%)⁷
Financials			20.2
Information Technology			17.6
Consumer Discretionary			14.0
Communication Services			11.4
Consumer Staples			10.7
Industrials			10.4
Real Estate			5.0
Materials			3.8
Health Care			3.6
Utilities			3.5
Energy			2.0
Liabilities in Excess of Cash and Other Assets			-2.2


MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			51.6
Large Cap ($10B–$25B)			20.9
Mid Cap ($3B–10B)			19.2
Small Cap (under $3B)			10.6
Liabilities in Excess of Cash and Other Assets			-2.2

6	Not all countries where the Fund may invest are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Asia Dividend Fund

Portfolio Manager Commentary (unaudited) (continued)

The best performer and largest contributor to returns came from Japan, with semiconductor equipment manufacturer Disco Corp. posting a significant gain. A leader in precision processing equipment for cutting, grinding and polishing, the stock moved up in part due to its exposure to solid growth areas such as generative artificial intelligence (AI) and power semiconductors. Fellow Japanese company Shin-Etsu Chemical was a significant contributor to returns and gained on hopes of improving outlooks for certain end markets such as semiconductors. Australian small appliance company Breville Group also aided returns as its medium-term growth outlook still appears to be robust in areas such as its core coffee offering. Mega cap Samsung Electronics was a significant contributor to absolute returns while Indian transmission business Power Grid also gained.

Notable Portfolio Changes

The portfolio underwent significant alterations during the course of the year in a bid to change certain country and sector allocations as well as to help to improve the portfolio’s balance of growth and yield while also attempting to ensure that the portfolio was one with a bias toward what we believe to be quality companies. This led to a reduction in the weightings of Vietnam and China, with increases in areas such as Japan, Hong Kong, and Taiwan. At a sector level, weightings in areas such as consumer discretionary, health care, and industrials declined while financials, IT and consumer staples, among others, all rose.

These adjustments led to a substantially higher turnover for the portfolio during 2023 than should be expected going forward as we aim to be long-term investors in businesses that we allocate our shareholders’ capital toward.

Fourth quarter activity was notably lower. We exited positions in leading medical device and endoscope maker Olympus Corp. in Japan as well as in China Tourism Group Duty Free given declining conviction in both holdings.

Outlook

Monetary policy expectations for the U.S. in 2024 have changed meaningfully in recent months with hopes that interest rates have peaked and that cuts will return. This helped to propel markets upward as 2023 drew to a close and the trajectory of these alterations, in conjunction with how contained inflation actually is and whether the U.S. can attain a soft landing, will all play a role in determining market movements over the next year. These will also, in part, determine stock prices in Asia in the near term as it may allow some easing while the U.S. dollar could also be impacted. Beyond this, we continue to remain concerned about the challenges that China faces within its own economy as well as broader geopolitical tensions that appear to be structural in nature. While these are reasons for caution there are also reasons to be constructive; weak sentiment, policy flexibility, appealing valuations and an earnings base that companies have potential to grow from, being a few. In India, although valuations are expensive, structural earnings growth appears intact while Taiwan and Korea are also expected to grow reasonably in 2024. For Japan, the positive forces of corporate governance improvements and increasing shareholder returns appear to still be in place although it is important to monitor the potential for the end of negative interest rates alongside currency movements and the possible implications that this may have for select sectors.

Given what may be a peak in the cost of capital, robust valuations of 12.2x FY24 earnings and EPS growth expected to be over 14% for the region in 2024, the outlook for Asia Pacific appears solid although scope for volatility remains. We continue to think that a focus on investing in what we believe to be quality companies at reasonable prices that also generally provide some form of current income is well placed to deliver for clients over the long term.


64		MATTHEWS ASIA FUNDS

Matthews Asia Dividend Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 102.2%


	Shares		Value

JAPAN: 31.9%
ITOCHU Corp.		711,600		$28,990,478

ORIX Corp.		1,329,300		24,965,829

Tokio Marine Holdings, Inc.		973,200		24,233,648

Shin-Etsu Chemical Co., Ltd.		556,100		23,257,862

Suzuki Motor Corp.		540,800		23,047,033

Nissin Foods Holdings Co., Ltd.		597,900		20,878,567

Ajinomoto Co., Inc.		485,400		18,684,905

Capcom Co., Ltd.		576,500		18,604,072

KDDI Corp.		570,000		18,079,548

Keyence Corp.		40,000		17,574,259

GLP J-Reit		17,414		17,334,575

Bandai Namco Holdings, Inc.		848,000		16,958,510

Kakaku.com, Inc.		1,347,400		16,647,750

Hikari Tsushin, Inc.		99,900		16,510,367

Toray Industries, Inc.		3,185,500		16,500,959

Disco Corp.		66,400		16,398,596

Nomura Research Institute, Ltd.		561,500		16,307,493

Total Japan				334,974,451



CHINA/HONG KONG: 26.6%

AIA Group, Ltd.		2,828,000		24,611,752

Tencent Holdings, Ltd.		625,300		23,608,122

Inner Mongolia Yili Industrial Group Co., Ltd. A Shares		6,048,443		22,715,248

Midea Group Co., Ltd. A Shares		2,781,641		21,432,964

NARI Technology Co., Ltd. A Shares		6,311,168		19,763,261

Link REIT		3,409,320		19,143,518

NetEase, Inc.		1,058,000		19,088,006

Wuliangye Yibin Co., Ltd. A Shares		937,400		18,469,066

Techtronic Industries Co., Ltd.		1,452,500		17,306,670

Minth Group, Ltd.		8,457,000		17,105,390

JD.com, Inc. Class A		1,174,383		16,961,721

Yum China Holdings, Inc.		398,932		16,926,685

Guangdong Investment, Ltd.		22,972,000		16,720,495

Yuexiu Transport Infrastructure, Ltd.		29,292,000		15,938,453

Milkyway Chemical Supply Chain Service Co., Ltd. A Shares		1,387,974		10,366,655

Total China/Hong Kong				280,158,006



AUSTRALIA: 10.4%

Ampol, Ltd.		862,270		21,250,768

CSL, Ltd.		106,366		20,735,958

Breville Group, Ltd.		950,467		17,638,141

Lottery Corp., Ltd.		5,266,480		17,377,248

AUB Group, Ltd.		905,141		17,133,089

Treasury Wine Estates, Ltd.		2,073,536		15,256,041

Total Australia				109,391,245



TAIWAN: 8.9%

Taiwan Semiconductor Manufacturing Co., Ltd.		1,873,469		35,917,308

Chailease Holding Co., Ltd.		3,549,580		22,304,662

Delta Electronics, Inc.		2,097,000		21,386,110

Taiwan Semiconductor Manufacturing Co., Ltd. ADR		134,919		14,031,576

Total Taiwan				93,639,656


	Shares		Value

INDIA: 8.3%

HDFC Bank, Ltd.		1,390,692		$28,475,839

Tata Consultancy Services, Ltd.		484,547		22,068,159

Power Grid Corp. of India, Ltd.		6,968,366		19,848,320

Hindustan Unilever, Ltd.		526,005		16,830,762

Total India				87,223,080



SOUTH KOREA: 6.5%

Samsung Electronics Co., Ltd.		435,809		26,452,229

Macquarie Korea Infrastructure Fund		2,394,158		23,121,851

SK Telecom Co., Ltd.		487,502		18,939,394

Total South Korea				68,513,474



SINGAPORE: 3.5%

United Overseas Bank, Ltd.		972,000		20,978,878

Capitaland India Trust		18,678,300		16,134,315

Total Singapore				37,113,193



INDONESIA: 2.5%

PT Bank Rakyat Indonesia Persero Tbk		71,750,984		26,667,536

Total Indonesia				26,667,536



THAILAND: 1.6%

Bangkok Dusit Medical Services Public Co., Ltd. F Shares		21,102,100		16,997,974

Total Thailand				16,997,974



VIETNAM: 1.5%

FPT Corp.		3,880,821		15,359,353

Total Vietnam				15,359,353



BANGLADESH: 0.5%
GrameenPhone, Ltd.		2,178,982		5,193,820

Total Bangladesh				5,193,820



TOTAL INVESTMENTS: 102.2%				1,075,231,788
(Cost $1,081,806,043)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (2.2%)				(23,558,181	)


NET ASSETS: 100.0%				$1,051,673,607

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

ADR	American Depositary Receipt

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			65

LOGO


PORTFOLIO MANAGERS

Sherwood Zhang, CFA				Winnie Chwang
Lead Manager				Lead manager

Elli Lee				Andrew Mattock, CFA
Co-Manager				Co-Manager



FUND FACTS

	Investor	Institutional
Ticker	MCDFX	MICDX
CUSIP	577125305	577130735
Inception	11/30/09	10/29/10
NAV	$10.71	$10.70
Initial Investment	$2,500	$100,000
Gross Expense Ratio¹	1.17%	1.04%
Portfolio Statistics
Total # of Positions		35
Net Assets		$118.7 million
Weighted Average Market Cap		$74.2 billion
Portfolio Turnover²		27.3%
Benchmark
MSCI China Index

OBJECTIVE

Total return with an emphasis on providing current income.

STRATEGY

Under normal circumstances, the 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 China. China includes its administrative and other districts, such as Hong Kong. The Fund may also invest in convertible debt and equity securities of companies located in China.

Matthews China Dividend Fund

Portfolio Manager Commentary (unaudited)

Performance

For the year ending December 31, 2023, the Matthews China Dividend Fund returned –20.67% (Investor Class) and –20.58% (Institutional Class), while its benchmark, the MSCI China Index, returned –11.04% over the same period. For the fourth quarter, the Fund returned –8.38% (Investor Class) and –8.36% (Institutional Class), while the benchmark returned –4.21%.

Market Environment

2023 was a disappointing year for Chinese equities and the Chinese economy overall. It’s disappointing, in our view, not just in the sense of the underwhelming recovery of Chinese consumer spending post-COVID lockdowns but also due to the lack of any significant stimulus measures by the government. Although the government did start to gradually loosen property purchase-restrictions across most cities in China, the expectations of potential home buyers regarding future house prices and their own income levels have changed. As a result, these policy changes barely helped to arrest the slump in the real estate market. As the year progressed, investors gradually gave up on the idea that the Chinese central government would step in to engineer a stronger consumption rebound.

The challenging real estate market and the soft consumption environment have combined to create a potential formula for deflation, in our view. From what we can see, many entrepreneurs—whose animal spirits were curbed during the COVID period—are now hesitating to start any new investments in this environment. From a geopolitical standpoint, the highly anticipated Biden-Xi summit in San Francsico in November didn’t really impact the ongoing concerns of the market. And staying at the macro level, Chinese equities were a key exception in a November global equities rally that followed signals by U.S. Federal Reserve Chairman Jay Powell that the U.S. interest rate-upcycle was near an end.

Performance Contributors and Detractors

An overweight to small- and mid-cap stocks detracted from relative returns in 2023 as these holdings were hurt by the weakness of China’s economic recovery. Stock selection in mega caps also detracted.

At the sector level, stock selection in consumer discretionary, financials and real estate were the biggest detractors to total and relative returns in the period. On the flip side, stock selection in communication services was the top contributor. The portfolio’s cash position also helped cushion some downside during the year.

At the holdings level, Xtep International, a sportswear company, was the worst performer and second-biggest detractor to relative returns. While the company’s business has been strong in recent years, the market has started to worry about the inventory condition of the whole industry and whether domestic brands will lose market share to global brands. Alibaba Group was among the biggest detractors to total return, largely as a result of the company abruptly walking back a plan to separate and spin off its cloud business. China Education Group, a provider of vocational education services, was another detractor after the company reported increased impairment losses, narrowing margins and weaker profitability in its full-year results.

On the other hand, CITIC Telecom International Holdings, the parent company of Macau’s leading fixed line and mobile telecom operator, was the top contributor to total and relative returns during the year, as the company maintained a stable

(continued)

1	Actual 2023 expense ratios.

2	The lesser of fiscal year 2023 long-term purchase costs or sales proceeds divided by the average monthly market value of long-term securities.


66		MATTHEWS ASIA FUNDS



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		3 Year		5 Year		10 Years		Since Inception			Inception Date
Investor Class (MCDFX)		-8.38%		-20.67%		-13.06%		-1.25%		3.12%		5.42%			11/30/09
Institutional Class (MICDX)		-8.36%		-20.58%		-12.93%		-1.12%		3.28%		4.52%			10/29/10
MSCI China Index³		-4.21%		-11.04%		-18.31%		-2.65%		1.03%		1.43%	⁴

Performance assumes reinvestment of all dividends and/or distributions before taxes. All performance quoted represents past performance and is no guarantee of future results. Investment return and principal value will fluctuate with market conditions so that when redeemed, shares may be worth more or less than their original cost. Current performance may be lower or higher than the return figures quoted. For the Fund’s most recent month-end performance, visit matthewsasia.com.



INCOME DISTRIBUTION HISTORY
	2023						2022
	June		December		Total		June		December		Total
Investor (MCDFX)	$	0.33	$	0.11	$	0.44	$	0.42	$	0.11	$	0.52
Inst’l (MICDX)	$	0.34	$	0.12	$	0.46	$	0.43	$	0.12	$	0.54

Note: This table does not include capital gains distributions. Totals may differ by $0.02 due to rounding. For income distribution history, visit matthewsasia.com.

30 DAY YIELD:

2.29% (Investor Class); 1.87% (Institutional Class)

Source: BNY Mellon Investment Servicing (US) Inc.

DIVIDEND YIELD: 3.67%

Source: FactSet Research Systems, Bloomberg, MICM.

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION—INVESTOR CLASS

LOGO

Calculated from 11/30/09.



TOP TEN HOLDINGS⁵
Name	Sector	% Net Assets
Tencent Holdings, Ltd.	Communication Services		9.1%
Alibaba Group Holding, Ltd.	Consumer Discretionary		8.1%
CITIC Telecom International Holdings, Ltd.	Communication Services		6.4%
Wuliangye Yibin Co., Ltd.	Consumer Staples		3.9%
Yangzijiang Shipbuilding Holdings, Ltd.	Industrials		3.6%
WuXi AppTec Co., Ltd.	Health Care		3.3%
Haier Smart Home Co., Ltd.	Consumer Discretionary		3.1%
CSC Financial Co., Ltd.	Financials		3.0%
China Suntien Green Energy Corp., Ltd.	Energy		3.0%
E Ink Holdings, Inc.	Information Technology		2.9%
% OF ASSETS IN TOP 10			46.4%

Holdings may combine more than one security from same issuer and related depositary receipts.


				matthewsasia.com \| 800.789.ASIA			67

Matthews China Dividend Fund

Portfolio Manager Commentary (unaudited) (continued)

business operation and a high dividend payout policy. Miniso Group, a discount retailer with worldwide presence, was the second-largest contributor to total returns although its share price experienced high volatility during the last quarter as its valuation became rich. Yangzijiang Shipbuilding Holdings was another top contributor, as the company continued to win orders for new ships and new environment standards are seeming to prolong the current global ship ordering cycle.

Notable Portfolio Changes

We initiated a position in Fuyao Glass Industry Group, a leading automotive glass manufacturer, in the last quarter of the year. We believe the company is well positioned as new electric vehicles (EVs) continue to include more glass content compared with traditional vehicles. In addition, we added a position in Kanzhun, a high profile recruiting platform. Although we have not seen a clear recovery of hiring across all segments in China, a feature of Kanzhun’s services—enabling hiring managers and job applicants to communicate online—makes it especially attractive to younger segments of the workforce.

In contrast, we sold our position in China Vanke, a real estate developer, given the significant difficulties that these firms face in trying to sell new residential properties and monetize other commercial real estate assets, such as shopping malls or warehouses, in such an uncertain environment. We also exited OPT Machine Vision Technology, a supplier of factory equipment, as the company disappointed in securing new orders in its new EV batteries business as well as its traditional consumer electronics customers experiencing weaker growth.

Outlook

We remain cautious on Chinese equities. Both domestic and international investors have had their confidence severely tested over the last three years. Unlike many other equities markets, there is no “natural” inflow into China’s market through pensions or retirement savings plans. That’s left only a selected group of companies with strong cash flow and balance sheets being active in the market, buying back their own shares.

Among the traditional drivers of Chinese economic growth, aside from real estate, the export sector is still demonstrating some strength. However, as China grows its share of global industrial output, it raises the specter of more trade frictions alongside continuing U.S. tariffs. In terms of consumption, the third economic driver, Chinese consumers are likely to continue to behave very conservatively due to a lackluster employment market and a bleak outlook for income growth. Industries with high paying jobs have unfortunately become casualties of tightened regulation and some have been subject to pay-cut directives from the government.

Chinese policymakers, in our view, have not yet realized the real threat of deflation to the economy. Although we don’t fully subscribe to the theory of a “Japanification” of China, we believe the government needs to do a lot more to avoid this trap and the risk of a “lost decade.”



COUNTRY ALLOCATION (%)^6,7
China/Hong Kong			96.0
Taiwan			2.9
Cash and other Assets, Less Liabilities			1.0



SECTOR ALLOCATION (%)⁷
Consumer Discretionary			27.3
Communication Services			17.2
Financials			15.3
Consumer Staples			8.7
Real Estate			6.6
Health Care			5.6
Industrials			5.6
Information Technology			5.1
Materials			4.4
Energy			3.0
Cash and other Assets, Less Liabilities			1.0



MARKET CAP EXPOSURE (%)⁷
Mega Cap (over $25B)			43.8
Large Cap ($10B–$25B)			16.3
Mid Cap ($3B–10B)			19.3
Small Cap (under $3B)			19.5
Cash and Other Assets, Less Liabilities			1.0

6	Not all countries where the Fund may invest are included in the benchmark index.

7	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


68		MATTHEWS ASIA FUNDS

Matthews China Dividend Fund

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 99.0%


	Shares		Value

CONSUMER DISCRETIONARY: 27.4%

Broadline Retail: 10.2%

Alibaba Group Holding, Ltd.		993,200		$9,567,041

MINISO Group Holding, Ltd. ADR		120,799		2,464,300

				12,031,341


Hotels, Restaurants & Leisure: 6.2%

Tam Jai International Co., Ltd.		15,983,000		2,577,910

Yum China Holdings, Inc.		58,590		2,485,974

Shanghai Jinjiang International Hotels Co., Ltd. B Shares		1,826,000		2,299,365

				7,363,249


Household Durables: 3.1%
Haier Smart Home Co., Ltd. D Shares		3,015,358		3,721,603


Automobiles: 2.0%
Yadea Group Holdings, Ltd.^b,c		1,350,000		2,377,853


Diversified Consumer Services: 2.0%
China Education Group Holdings, Ltd.^c		3,784,000		2,374,566


Textiles, Apparel & Luxury Goods: 2.0%
Xtep International Holdings, Ltd.		4,084,000		2,308,656


Automobile Components: 1.9%
Fuyao Glass Industry Group Co., Ltd. H Shares^b,c		468,400		2,280,855

Total Consumer Discretionary				32,458,123



COMMUNICATION SERVICES: 17.3%
Interactive Media & Services: 10.8%

Tencent Holdings, Ltd.		286,500		10,816,771

Kanzhun, Ltd. ADR		120,401		1,999,861

				12,816,632


Diversified Telecommunication Services: 6.5%
CITIC Telecom International Holdings, Ltd.		18,188,000		7,644,073

Total Communication Services				20,460,705



FINANCIALS: 15.3%
Capital Markets: 5.7%

CSC Financial Co., Ltd. H Shares^b,c		4,070,500		3,597,854

Hong Kong Exchanges & Clearing, Ltd.		92,200		3,162,484

				6,760,338


Banks: 5.1%

China Merchants Bank Co., Ltd. A Shares		803,784		3,139,150

Postal Savings Bank of China Co., Ltd. H Shares^b,c		6,258,000		2,992,129

				6,131,279


Insurance: 4.5%

PICC Property & Casualty Co., Ltd. H Shares		2,434,000		2,896,502

Ping An Insurance Group Co. of China, Ltd. H Shares		531,500		2,406,260

				5,302,762

Total Financials				18,194,379


	Shares		Value

CONSUMER STAPLES: 8.7%
Beverages: 5.9%

Wuliangye Yibin Co., Ltd. A Shares		235,400		$4,637,954

Tsingtao Brewery Co., Ltd. H Shares		354,000		2,378,637

				7,016,591


Food Products: 2.8%
Inner Mongolia Yili Industrial Group Co., Ltd. A Shares		885,600		3,325,918

Total Consumer Staples				10,342,509



REAL ESTATE: 6.6%
Real Estate Management & Development: 6.6%

KE Holdings, Inc. ADR		181,419		2,940,802

Onewo, Inc. H Shares		782,730		2,496,702

Wharf Real Estate Investment Co., Ltd.		714,000		2,413,662

Total Real Estate				7,851,166



INDUSTRIALS: 5.6%
Machinery: 3.6%
Yangzijiang Shipbuilding Holdings, Ltd.		3,748,200		4,228,705


Air Freight & Logistics: 2.0%
ZTO Express Cayman, Inc. ADR		115,049		2,448,243

Total Industrials				6,676,948



HEALTH CARE: 5.6%
Life Sciences Tools & Services: 3.3%
WuXi AppTec Co., Ltd. A Shares		381,600		3,897,712


Health Care Equipment & Supplies: 2.3%
AK Medical Holdings, Ltd.^b,c		3,396,000		2,723,955

Total Health Care				6,621,667



INFORMATION TECHNOLOGY: 5.1%
Electronic Equipment, Instruments & Components: 2.9%
E Ink Holdings, Inc.		546,000		3,496,058


Software: 2.2%
Longshine Technology Group Co., Ltd. A Shares		1,108,300		2,549,231

Total Information Technology				6,045,289



MATERIALS: 4.4%
Construction Materials: 2.4%

China Jushi Co., Ltd. A Shares		1,632,407		2,251,999

Huaxin Cement Co., Ltd. H Shares		688,692		596,194

				2,848,193


Metals & Mining: 2.0%
Tiangong International Co., Ltd.		8,980,000		2,414,952

Total Materials				5,263,145


				matthewsasia.com \| 800.789.ASIA			69

Matthews China Dividend Fund

December 31, 2023

Schedule of Investments^a (continued)

COMMON EQUITIES (continued)


	Shares		Value

ENERGY: 3.0%
Oil, Gas & Consumable Fuels: 3.0%
China Suntien Green Energy Corp., Ltd. H Shares		9,801,000		$3,566,098

Total Energy				3,566,098



TOTAL INVESTMENTS: 99.0%				117,480,029
(Cost $149,647,372)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.0%				1,201,889



NET ASSETS: 100.0%				$118,681,918

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


70		MATTHEWS ASIA FUNDS

Index Definitions

The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI Emerging Markets Small Cap Index is a free float-adjusted market capitalization-weighted small cap index of the stock markets of Argentina, Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Poland, Qatar, Russia, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI All Country Asia ex Japan Small Cap Index is a free float–adjusted market capitalization-weighted small cap index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.

The MSCI All Country Asia Pacific Index is a free float–adjusted market capitalization–weighted index of the stock markets of Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.

The MSCI All Country Asia ex Japan Index is a free float–adjusted market capitalization–weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Pakistan, Philippines, Singapore, South Korea, Taiwan and Thailand.

The MSCI China Index is a free float–adjusted market capitalization-weighted index of Chinese equities that includes H

shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen ex-exchanges, and Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).

The MSCI China All Shares Index captures large and mid-cap representation across China A shares, B shares, H shares, Red Chips (issued by entities owned by national or local governments in China), P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs). The index aims to reflect the opportunity set of China share classes listed in Hong Kong, Shanghai, Shenzhen and outside of China.

The MSCI China Small Cap Index is a free float–adjusted market capitalization-weighted small cap index of the Chinese equity securities markets, including H shares listed on the Hong Kong exchange, B shares listed on the Shanghai and Shenzhen exchanges, and Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).

The S&P Bombay Stock Exchange (BSE) 100 Index is a free float–adjusted market capitalization-weighted index of the 100 stocks listed on the Bombay Stock Exchange.

The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.

The MSCI Japan Index is a free float–adjusted market capitalization-weighted index of Japanese equities listed in Japan.


				matthewsasia.com \| 800.789.ASIA			71

Disclosures

Fund Holdings: The Fund holdings shown in this report are as of December 31, 2023. Holdings are subject to change at any time, so holdings shown in this report may not reflect current Fund holdings. The Funds file complete schedules of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year on Form N-PORT. The Funds’ Form N-PORTs are available on the SEC’s website at www.sec.gov. Complete schedules of investments are also available without charge, upon request, from the Funds by calling us at 800.789.ASIA (2742).

Proxy Voting Record: The Funds’ Statement of Additional Information containing a description of the policies and procedures that the Funds have used to vote proxies relating to portfolio securities, along with each Fund’s proxy voting record relating

to portfolio securities held during the most recent 12-month period ended June 30, is available upon request, at no charge, at the Funds’ website at matthewsasia.com or by calling 800.789.ASIA (2742), or on the SEC’s website at www.sec.gov.

Shareholder Reports and Prospectuses: To reduce the Funds’ expenses, we try to identify related shareholders in a household and send only one copy of the Funds’ prospectus and financial reports to that address. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. At any time you may view the Funds’ current prospectus, summary prospectus and financial reports on our website. If you prefer to receive individual copies of the Funds’ prospectus or financial reports, please call us at 800.789.ASIA (2742).


72		MATTHEWS ASIA FUNDS

Disclosure of Fund Expenses (unaudited)

We believe it is important for you to understand the impact of fees regarding your investment. All mutual funds have operating expenses. As a shareholder of a mutual fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund. A fund’s operating expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

This table illustrates your fund’s costs in two ways:

Actual Fund Return: This section helps you to estimate the actual operating expenses, after any applicable fee waivers, that you paid over the period. The “Ending Account Value” shown is derived from the fund’s actual return for the past six month period, the “Expense Ratio” column shows the period’s annualized expense ratio, and the “Operating Expenses Paid During Period” column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund at the beginning of the period. You may use the information here, together with your account value, to estimate the expenses that you paid over the period. To do so, simply divide your account value

by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund in the first line under the heading entitled “Operating Expenses Paid During Period.”

Hypothetical 5% Return: This section is intended to help you compare your fund’s costs with those of other mutual funds. It assumes that the fund had an annual return of 5% before operating expenses, but that the expense ratio is unchanged. In this case, because the return used is not the fund’s actual return, the results do not apply to your investment. This example is useful in making comparisons to other mutual funds because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on an assumed 5% annual return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Please note that the operating expenses shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees.

Matthews Asia Funds does not charge any sales loads, exchange fees, or 12b-1 fees, but these may be present in other funds to which you compare this data. Therefore, the hypothetical portions of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.


				matthewsasia.com \| 800.789.ASIA			73

December 31, 2023

Disclosure of Fund Expenses (unaudited) (continued)


	INVESTOR								INSTITUTIONAL
	Beginning Account Value 7/1/23		Ending Account Value 12/31/23		Expense Ratio		Operating Expenses Paid During Period 7/1/23– 12/31/23¹		Beginning Account Value 7/1/23		Ending Account Value 12/31/23		Expense Ratio		Operating Expenses Paid During Period 7/1/23– 12/31/23¹
GLOBAL EMERGING MARKETS STRATEGIES
Matthews Emerging Markets Equity Fund
Actual Fund Return		$1,000.00		$1,022.80		1.08%		$5.51		$1,000.00		$1,023.80		0.90%		$4.59
Hypothetical 5% Returns		$1,000.00		$1,019.76		1.08%		$5.50		$1,000.00		$1,020.67		0.90%		$4.58
Matthews Emerging Markets Sustainable Future Fund
Actual Fund Return		$1,000.00		$996.20		1.26%		$6.34		$1,000.00		$996.80		1.15%		$5.79
Hypothetical 5% Returns		$1,000.00		$1,018.85		1.26%		$6.41		$1,000.00		$1,019.41		1.15%		$5.85
Matthews Emerging Markets Small Companies Fund
Actual Fund Return		$1,000.00		$1,051.60		1.36%		$7.03		$1,000.00		$1,052.70		1.15%		$5.95
Hypothetical 5% Returns		$1,000.00		$1,018.35		1.36%		$6.92		$1,000.00		$1,019.41		1.15%		$5.85

ASIA GROWTH STRATEGIES
Matthews Asia Growth Fund
Actual Fund Return		$1,000.00		$1,045.90		1.09%		$5.62		$1,000.00		$1,046.80		0.96%		$4.95
Hypothetical 5% Returns		$1,000.00		$1,019.71		1.09%		$5.55		$1,000.00		$1,020.37		0.96%		$4.89
Matthews Pacific Tiger Fund
Actual Fund Return		$1,000.00		$963.30		1.09%		$5.39		$1,000.00		$964.00		0.98%		$4.85
Hypothetical 5% Returns		$1,000.00		$1,019.71		1.09%		$5.55		$1,000.00		$1,020.27		0.98%		$4.99
Matthews Asia Innovators Fund
Actual Fund Return		$1,000.00		$1,005.50		1.10%		$5.56		$1,000.00		$1,005.70		1.00%		$5.06
Hypothetical 5% Returns		$1,000.00		$1,019.66		1.10%		$5.60		$1,000.00		$1,020.16		1.00%		$5.09
Matthews China Fund
Actual Fund Return		$1,000.00		$925.20		1.13%		$5.48		$1,000.00		$925.90		1.01%		$4.90
Hypothetical 5% Returns		$1,000.00		$1,019.51		1.13%		$5.75		$1,000.00		$1,020.11		1.01%		$5.14
Matthews China Small Companies Fund
Actual Fund Return		$1,000.00		$923.80		1.36%		$6.59		$1,000.00		$925.30		1.20%		$5.82
Hypothetical 5% Returns		$1,000.00		$1,018.35		1.36%		$6.92		$1,000.00		$1,019.16		1.20%		$6.11
Matthews India Fund
Actual Fund Return		$1,000.00		$1,103.60		1.13%		$5.99		$1,000.00		$1,104.30		1.01%		$5.36
Hypothetical 5% Returns		$1,000.00		$1,019.51		1.13%		$5.75		$1,000.00		$1,020.11		1.01%		$5.14
Matthews Japan Fund
Actual Fund Return		$1,000.00		$1,040.20		1.10%		$5.66		$1,000.00		$1,040.70		1.02%		$5.25
Hypothetical 5% Returns		$1,000.00		$1,019.66		1.10%		$5.60		$1,000.00		$1,020.06		1.02%		$5.19

ASIA GROWTH AND INCOME STRATEGIES
Matthews Asian Growth and Income Fund
Actual Fund Return		$1,000.00		$989.30		1.12%		$5.62		$1,000.00		$990.10		0.99%		$4.97
Hypothetical 5% Returns		$1,000.00		$1,019.56		1.12%		$5.70		$1,000.00		$1,020.21		0.99%		$5.04
Matthews Asia Dividend Fund
Actual Fund Return		$1,000.00		$1,017.10		0.98%		$4.98		$1,000.00		$1,017.60		0.92%		$4.68
Hypothetical 5% Returns		$1,000.00		$1,020.27		0.98%		$4.99		$1,000.00		$1,020.57		0.92%		$4.69
Matthews China Dividend Fund
Actual Fund Return		$1,000.00		$869.80		1.16%		$5.47		$1,000.00		$870.00		1.08%		$5.09
Hypothetical 5% Returns		$1,000.00		$1,019.36		1.16%		$5.90		$1,000.00		$1,019.76		1.08%		$5.50

1	Operating expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, then divided by 365.


74		MATTHEWS ASIA FUNDS


Statements of Assets and Liabilities		December 31, 2023


		Matthews Emerging Markets Equity Fund		Matthews Emerging Markets Sustainable Future Fund		Matthews Emerging Markets Small Companies Fund

ASSETS:	��

Investments at value (A) (Note 2-A):

Unaffiliated issuers			$20,559,707		$212,981,808		$615,812,879

Cash			378,249		—		5,237,050

Segregated foreign currency at value			599		10,244		3,520

Foreign currency at value (B)			18,218		429,009		646

Dividends and interest receivable			38,932		90,276		802,337

Receivable for securities sold			—		4,089,810		419,304

Receivable for capital shares sold			25,387		1,364,400		2,562,498

Other receivable			2,029		9,132		58,239

Due from Advisor (Note 4)			1,751		—		—

Prepaid expenses			14,153		25,210		23,873
TOTAL ASSETS			21,039,025		218,999,889		624,920,346

LIABILITIES:

Cash overdraft			—		4,774,424		—

Payable for securities purchased			—		278,764		1,780,486

Payable for capital shares redeemed			112,935		2,593,668		1,331,931

Deferred foreign capital gains tax liability (Note 2-E)			13,535		1,631,717		5,847,255

Due to Advisor (Note 4)			—		127,032		262,605

Administration and accounting fees payable (Note 4)			283		2,939		7,902

Administration and shareholder servicing fees payable (Note 4)			3,443		34,980		97,955

Custodian fees payable			1,249		—		1,063

Foreign capital gains tax payable (Note 2-E)			—		—		2,710

Intermediary service fees payable (Note 4)			2,118		18,117		105,829

Professional fees payable			624		10,541		30,795

Transfer agent fees payable			896		1,269		6,614

Accrued other expenses payable			1,839		1,351		47,554
TOTAL LIABILITIES			136,922		9,474,802		9,522,699

NET ASSETS			$20,902,103		$209,525,087		$615,397,647

NET ASSETS:

Investor Class			$9,617,862		$38,176,193		$287,673,814

Institutional Class			11,284,241		171,348,894		327,723,833
TOTAL			$20,902,103		$209,525,087		$615,397,647

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			75


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Emerging Markets Equity Fund			Matthews Emerging Markets Sustainable Future Fund			Matthews Emerging Markets Small Companies Fund
SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)

Investor Class		810,927			3,044,759			11,270,552

Institutional Class		953,320			13,654,847			12,854,880
TOTAL		1,764,247			16,699,606			24,125,432

NET ASSET VALUE:
Investor Class, offering price and redemption price		$11.86			$12.54			$25.52
Institutional Class, offering price and redemption price		$11.84			$12.55			$25.49

NET ASSETS CONSISTS OF:

Capital paid-in		$28,947,358			$218,841,375			$656,583,509

Total distributable earnings/(accumulated loss)		(8,045,255	)		(9,316,288	)		(41,185,862	)
NET ASSETS		$20,902,103			$209,525,087			$615,397,647

(A) Investments at cost:

Unaffiliated Issuers		$22,070,016			$202,893,160			$559,823,976

(B) Foreign Currency at Cost		$18,099			$429,132			$645

See accompanying notes to financial statements.


76		MATTHEWS ASIA FUNDS


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Asia Growth Fund		Matthews Pacific Tiger Fund		Matthews Asia Innovators Fund

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$369,280,036		$1,961,685,107		$309,366,833

Cash		10,470,197		—		307,507

Segregated foreign currency at value		—		20,313		1,566

Foreign currency at value (B)		6,419		20,284,124		125

Dividends and interest receivable		215,085		2,490,466		356,194

Receivable for securities sold		2,787,431		118,542,864		24,327,546

Receivable for capital shares sold		268,771		1,269,112		187,791

Other receivable		7,606		1,106,497		—

Prepaid expenses		20,319		19,256		17,753
TOTAL ASSETS		383,055,864		2,105,417,739		334,565,315

LIABILITIES:

Cash overdraft		—		71,314,717		—

Payable for securities purchased		9,415,086		70,487,522		17,704,964

Payable for capital shares redeemed		1,195,466		11,080,789		2,024,846

Deferred foreign capital gains tax liability (Note 2-E)		575,533		20,458,539		1,404,841

Due to Advisor (Note 4)		222,492		1,190,903		186,885

Administration and accounting fees payable (Note 4)		5,096		30,726		4,329

Administration and shareholder servicing fees payable (Note 4)		60,551		339,223		50,703

Custodian fees payable		13,883		132,478		8,267

Intermediary service fees payable (Note 4)		51,343		329,709		57,107

Professional fees payable		41,971		129,707		26,895

Transfer agent fees payable		7,011		21,631		5,867

Accrued other expenses payable		194,717		868,113		137,805
TOTAL LIABILITIES		11,783,149		176,384,057		21,612,509

NET ASSETS		$371,272,715		$1,929,033,682		$312,952,806

NET ASSETS:

Investor Class		$162,263,244		$707,716,989		$177,070,310

Institutional Class		209,009,471		1,221,316,693		135,882,496
TOTAL		$371,272,715		$1,929,033,682		$312,952,806

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			77


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Asia Growth Fund			Matthews Pacific Tiger Fund		Matthews Asia Innovators Fund
SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)

Investor Class		7,656,107			38,011,703		15,937,394

Institutional Class		9,740,353			65,638,237		12,044,937
TOTAL		17,396,460			103,649,940		27,982,331

NET ASSET VALUE:
Investor Class, offering price and redemption price		$21.19			$18.62		$11.11
Institutional Class, offering price and redemption price		$21.46			$18.61		$11.28

NET ASSETS CONSISTS OF:

Capital paid-in		$541,347,382			$1,920,629,174		$700,142,169

Total distributable earnings/(accumulated loss)		(170,074,667	)		8,404,508		(387,189,363	)
NET ASSETS		$371,272,715			$1,929,033,682		$312,952,806

(A) Investments at cost:

Unaffiliated Issuers		$317,906,277			$1,707,589,755		$277,207,603

(B) Foreign Currency at Cost		$6,424			$20,284,124		$125

See accompanying notes to financial statements.


78		MATTHEWS ASIA FUNDS


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews China Fund		Matthews China Small Companies Fund		Matthews India Fund

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$458,597,611		$89,389,602		$788,190,335

Cash		—		413,467		—

Segregated foreign currency at value		18,782		3,112		—

Foreign currency at value (B)		71		321		8,517,475

Dividends and interest receivable		755,621		—		617

Receivable for securities sold		—		—		4,726,769

Receivable for capital shares sold		338,411		219,420		1,840,627

Other receivable		—		1,388		13,338

Prepaid expenses		24,687		12,693		33,089
TOTAL ASSETS		459,735,183		90,040,003		803,322,250

LIABILITIES:

Cash overdraft		7,595,722		—		4,386,105

Payable for securities purchased		—		—		5,960,546

Payable for capital shares redeemed		2,835,987		703,473		981,475

Deferred foreign capital gains tax liability (Note 2-E)		—		—		27,923,737

Due to Advisor (Note 4)		279,437		65,018		454,138

Administration and accounting fees payable (Note 4)		6,723		1,264		9,644

Administration and shareholder servicing fees payable (Note 4)		76,282		14,346		120,716

Custodian fees payable		1,584		7,257		18,303

Intermediary service fees payable (Note 4)		82,171		20,973		101,832

Professional fees payable		37,845		26,357		53,370

Transfer agent fees payable		16,106		2,559		15,084

Accrued other expenses payable		344,310		42,622		171,924
TOTAL LIABILITIES		11,276,167		883,869		40,196,874

NET ASSETS		$448,459,016		$89,156,134		$763,125,376

NET ASSETS:

Investor Class		$300,132,305		$66,173,572		$614,102,697

Institutional Class		148,326,711		22,982,562		149,022,679
TOTAL		$448,459,016		$89,156,134		$763,125,376

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			79


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews China Fund			Matthews China Small Companies Fund			Matthews India Fund
SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)

Investor Class		25,826,050			7,393,905			23,290,305

Institutional Class		12,786,958			2,571,592			5,532,940
TOTAL		38,613,008			9,965,497			28,823,245

NET ASSET VALUE:
Investor Class, offering price and redemption price		$11.62			$8.95			$26.37
Institutional Class, offering price and redemption price		$11.60			$8.94			$26.93

NET ASSETS CONSISTS OF:

Capital paid-in		$956,365,855			$248,807,881			$609,049,771

Total distributable earnings/(accumulated loss)		(507,906,839	)		(159,651,747	)		154,075,605
NET ASSETS		$448,459,016			$89,156,134			$763,125,376

(A) Investments at cost:

Unaffiliated Issuers		$665,641,829			$106,116,962			$602,504,303

(B) Foreign Currency at Cost		$71			$319			$8,517,475

See accompanying notes to financial statements.


80		MATTHEWS ASIA FUNDS


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Japan Fund		Matthews Asian Growth and Income Fund

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$638,333,232		$317,226,310

Cash		21,347,623		—

Segregated foreign currency at value		—		12

Foreign currency at value (B)		4,292		821,728

Dividends and interest receivable		161,030		620,165

Receivable for securities sold		10,470		9,186,822

Receivable for capital shares sold		768,567		118,276

Other receivable		—		20,535

Prepaid expenses		23,259		15,232
TOTAL ASSETS		660,648,473		328,009,080

LIABILITIES:

Cash overdraft		—		148,365

Payable for securities purchased		1,797,014		2,720

Payable for capital shares redeemed		2,475,798		2,209,898

Deferred foreign capital gains tax liability (Note 2-E)		—		467,990

Due to Advisor (Note 4)		382,023		258,740

Administration and accounting fees payable (Note 4)		8,477		4,748

Administration and shareholder servicing fees payable (Note 4)		104,797		54,677

Custodian fees payable		8,529		1,065

Intermediary service fees payable (Note 4)		39,924		69,004

Professional fees payable		34,086		47,063

Transfer agent fees payable		26,766		9,286

Accrued other expenses payable		273,050		271,840
TOTAL LIABILITIES		5,150,464		3,545,396

NET ASSETS		$655,498,009		$324,463,684

NET ASSETS:

Investor Class		$239,578,261		$244,697,712

Institutional Class		415,919,748		79,765,972
TOTAL		$655,498,009		$324,463,684

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			81


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Japan Fund			Matthews Asian Growth and Income Fund
SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)

Investor Class		13,627,363			19,464,472

Institutional Class		23,585,238			6,360,280
TOTAL		37,212,601			25,824,752

NET ASSET VALUE:
Investor Class, offering price and redemption price		$17.58			$12.57
Institutional Class, offering price and redemption price		$17.63			$12.54

NET ASSETS CONSISTS OF:

Capital paid-in		$744,513,019			$359,617,427

Total distributable earnings/(accumulated loss)		(89,015,010	)		(35,153,743	)
NET ASSETS		$655,498,009			$324,463,684

(A) Investments at cost:

Unaffiliated Issuers		$546,054,623			$315,869,937

(B) Foreign Currency at Cost		$4,295			$820,571

See accompanying notes to financial statements.


82		MATTHEWS ASIA FUNDS


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Asia Dividend Fund		Matthews China Dividend Fund

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$1,075,231,788		$117,480,029

Cash		—		268,494

Segregated foreign currency at value		5,064		4,392

Foreign currency at value (B)		1,120,727		18

Dividends and interest receivable		1,298,561		126,525

Receivable for securities sold		8,532,770		2,405,677

Receivable for capital shares sold		411,362		117,770

Other receivable		1,895,944		—

Prepaid expenses		21,888		—
TOTAL ASSETS		1,088,518,104		120,402,905

LIABILITIES:

Cash overdraft		29,702,912		—

Payable for securities purchased		475		1,853

Payable for capital shares redeemed		2,983,552		1,473,351

Deferred foreign capital gains tax liability (Note 2-E)		2,418,871		—

Due to Advisor (Note 4)		637,986		72,754

Administration and accounting fees payable (Note 4)		15,414		1,752

Administration and shareholder servicing fees payable (Note 4)		177,476		19,927

Custodian fees payable		5,801		8,860

Intermediary service fees payable (Note 4)		127,932		26,273

Professional fees payable		83,324		27,330

Transfer agent fees payable		11,723		2,843

Accrued other expenses payable		679,031		86,044
TOTAL LIABILITIES		36,844,497		1,720,987

NET ASSETS		$1,051,673,607		$118,681,918

NET ASSETS:

Investor Class		$401,340,937		$76,516,977

Institutional Class		650,332,670		42,164,941
TOTAL		$1,051,673,607		$118,681,918

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			83


Statements of Assets and Liabilities (continued)		December 31, 2023


	Matthews Asia Dividend Fund			Matthews China Dividend Fund
SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)

Investor Class		29,304,870			7,142,690

Institutional Class		47,534,812			3,940,669
TOTAL		76,839,682			11,083,359

NET ASSET VALUE:
Investor Class, offering price and redemption price		$13.70			$10.71
Institutional Class, offering price and redemption price		$13.68			$10.70

NET ASSETS CONSISTS OF:

Capital paid-in		$1,413,834,695			$205,333,015

Total distributable earnings/(accumulated loss)		(362,161,088	)		(86,651,097	)
NET ASSETS		$1,051,673,607			$118,681,918

(A) Investments at cost:

Unaffiliated Issuers		$1,081,806,043			$149,647,372

(B) Foreign Currency at Cost		$1,120,550			$18

See accompanying notes to financial statements.


84		MATTHEWS ASIA FUNDS


Statements of Operations		Year Ended December 31, 2023


	Matthews Emerging Markets Equity Fund			Matthews Emerging Markets Sustainable Future Fund			Matthews Emerging Markets Small Companies Fund

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$612,418			$2,770,820			$7,654,401

Foreign withholding tax		(52,306	)		(338,274	)		(1,030,923	)
TOTAL INVESTMENT INCOME		560,112			2,432,546			6,623,478

EXPENSES:

Investment advisory fees (Note 4)		165,051			1,554,456			5,015,523

Administration and accounting fees (Note 4)		1,930			18,164			40,124

Administration and shareholder servicing fees (Note 4)		42,566			402,204			893,272

Accounting out-of-pocket fees		37,347			41,057			45,168

Custodian fees		4,666			86,168			157,139

Printing fees		15,494			31,886			40,960

Intermediary service fees (Note 4)		26,168			212,940			646,457

Professional fees		42,945			55,118			65,960

Registration fees		19,469			54,012			64,332

Transfer agent fees		5,642			8,992			36,249

Trustees fees		4,073			31,399			66,760

Other expenses		17,756			44,625			64,019
TOTAL EXPENSES		383,107			2,541,021			7,135,963

Advisory fees waived and expenses waived or reimbursed (Note 4)		(143,956	)		—			(960,093	)
NET EXPENSES		239,151			2,541,021			6,175,870

NET INVESTMENT INCOME (LOSS)		320,961			(108,475	)		447,608

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(1,312,845	)		3,369,322			33,421,329

Net realized foreign capital gains tax		—			(657,293	)		(794,939	)

Net realized gain (loss) on foreign currency related transactions		(4,766	)		(88,257	)		(245,060	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		3,347,537			11,360,406			56,175,509

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		(18,390	)		(501,121	)		(3,307,422	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		562			(1,144	)		3,847
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		2,012,098			13,481,913			85,253,264

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$2,333,059			$13,373,438			$85,700,872

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			85


Statements of Operations (continued)		Year Ended December 31, 2023


	Matthews Asia Growth Fund			Matthews Pacific Tiger Fund			Matthews Asia Innovators Fund

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$7,667,956			$62,361,848			$4,678,774

Foreign withholding tax		(827,521	)		(6,809,112	)		(581,034	)
TOTAL INVESTMENT INCOME		6,840,435			55,552,736			4,097,740

EXPENSES:

Investment advisory fees (Note 4)		3,650,147			23,257,575			3,016,480

Administration and accounting fees (Note 4)		42,719			272,178			35,294

Administration and shareholder servicing fees (Note 4)		938,233			5,980,014			776,190

Accounting out-of-pocket fees		38,017			41,816			33,658

Custodian fees		11,537			100,467			76,318

Printing fees		62,005			306,670			48,667

Intermediary service fees (Note 4)		559,844			3,521,364			634,774

Professional fees		66,841			293,203			64,323

Registration fees		53,398			94,235			57,030

Transfer agent fees		38,726			123,721			31,270

Trustees fees		64,660			488,331			40,364

Other expenses		35,818			406,116			13,410
TOTAL EXPENSES		5,561,945			34,885,690			4,827,778

Advisory fees waived and expenses waived or reimbursed (Note 4)		—			(54,495	)		—

Administration fees waived (Note 5)		—			(54,495	)		—
NET EXPENSES		5,561,945			34,776,700			4,827,778

NET INVESTMENT INCOME (LOSS)		1,278,490			20,776,036			(730,038	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(61,557,675	)		(141,484,349	)		(46,888,991	)

Net realized foreign capital gains tax		(1,381,210	)		(11,222,950	)		(1,529,880	)

Net realized gain (loss) on foreign currency related transactions		(171,558	)		(784,201	)		(618,104	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		73,506,854			(68,663,202	)		33,771,457

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		219,136			2,280,753			(273,091	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		43,502			151,081			(15,552	)
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		10,659,049			(219,722,868	)		(15,554,161	)

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$11,937,539			($198,946,832	)		($16,284,199	)

See accompanying notes to financial statements.


86		MATTHEWS ASIA FUNDS


Statements of Operations (continued)		Year Ended December 31, 2023


	Matthews China Fund			Matthews China Small Companies Fund			Matthews India Fund

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$13,204,779			$2,054,592			$8,985,120

Interest		—			—			1,317

Foreign withholding tax		(966,762	)		(61,607	)		(1,905,708	)
TOTAL INVESTMENT INCOME		12,238,017			1,992,985			7,080,729

EXPENSES:

Investment advisory fees (Note 4)		4,626,467			1,312,855			4,408,096

Administration and accounting fees (Note 4)		54,133			10,503			51,478

Administration and shareholder servicing fees (Note 4)		1,190,414			230,701			1,143,239

Accounting out-of-pocket fees		41,369			41,342			40,927

Custodian fees		51,503			13,029			21,139

Printing fees		73,140			27,501			52,625

Intermediary service fees (Note 4)		959,063			231,203			1,103,491

Professional fees		66,224			42,524			106,330

Registration fees		58,555			31,153			31,538

Transfer agent fees		93,350			14,437			85,885

Trustees fees		91,788			18,110			90,995

Other expenses		77,823			7,305			74,379
TOTAL EXPENSES		7,383,829			1,980,663			7,210,122

Advisory fees waived and expenses waived or reimbursed (Note 4)		—			(200,612	)		—
NET EXPENSES		7,383,829			1,780,051			7,210,122

NET INVESTMENT INCOME (LOSS)		4,854,188			212,934			(129,393	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(120,623,659	)		(41,864,838	)		49,503,377

Net realized foreign capital gains tax		—			—			(8,382,704	)

Net realized gain (loss) on foreign currency related transactions		(1,794	)		(117,569	)		(334,310	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		(33,001,975	)		16,928,636			107,784,593

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		—			—			(11,036,039	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		8			(9,377	)		(1,008	)
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		(153,627,420	)		(25,063,148	)		137,533,909

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		($148,773,232	)		($24,850,214	)		$137,404,516

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			87


Statements of Operations (continued)		Year Ended December 31, 2023


	Matthews Japan Fund			Matthews Asian Growth and Income Fund

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$12,294,956			$16,301,491

Interest		—			172,440

Foreign withholding tax		(1,173,587	)		(1,288,958	)
TOTAL INVESTMENT INCOME		11,121,369			15,184,973

EXPENSES:

Investment advisory fees (Note 4)		4,462,435			3,540,355

Administration and accounting fees (Note 4)		52,151			41,432

Administration and shareholder servicing fees (Note 4)		1,153,909			910,316

Accounting out-of-pocket fees		41,644			39,958

Custodian fees		23,686			38,013

Printing fees		73,139			68,024

Intermediary service fees (Note 4)		524,763			738,164

Professional fees		67,588			81,794

Registration fees		77,849			7,088

Transfer agent fees		161,403			53,193

Trustees fees		90,279			77,963

Other expenses		73,152			77,070
TOTAL EXPENSES		6,801,998			5,673,370

NET INVESTMENT INCOME (LOSS)		4,319,371			9,511,603

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY RELATED TRANSACTIONS:

Net realized gain (loss) on investments—Unaffiliated Issuers		(7,453,507	)		22,203,674

Net realized foreign capital gains tax		—			(584	)

Net realized gain (loss) on foreign currency related transactions		(497,159	)		(70,483	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		107,982,557			(18,794,116	)

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		—			151,746

Net change in unrealized appreciation/depreciation on foreign currency related translations		273,482			313,865
Net realized and unrealized gain (loss) on investments and foreign currency related transactions		100,305,373			3,804,102

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$104,624,744			$13,315,705

See accompanying notes to financial statements.


88		MATTHEWS ASIA FUNDS


Statements of Operations (continued)		Year Ended December 31, 2023


	Matthews Asia Dividend Fund			Matthews China Dividend Fund

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$42,452,982			$6,382,571

Foreign withholding tax		(3,651,506	)		(350,344	)
TOTAL INVESTMENT INCOME		38,801,476			6,032,227

EXPENSES:

Investment advisory fees (Note 4)		10,447,486			1,298,160

Administration and accounting fees (Note 4)		122,240			15,195

Administration and shareholder servicing fees (Note 4)		2,688,362			333,530

Accounting out-of-pocket fees		43,611			33,472

Custodian fees		82,527			9,033

Printing fees		198,854			40,473

Intermediary service fees (Note 4)		1,488,633			308,583

Professional fees		220,465			44,933

Registration fees		57,947			—

Transfer agent fees		70,176			16,595

Trustees fees		219,939			27,704

Other expenses		40,367			7,063
TOTAL EXPENSES		15,680,607			2,134,741

NET INVESTMENT INCOME (LOSS)		23,120,869			3,897,486

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		61,769,512			(18,837,307	)

Net realized foreign capital gains tax		(9,149,740	)		—

Net realized gain (loss) on foreign currency related transactions		(3,056,208	)		(498	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		(16,182,380	)		(25,585,939	)

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		8,537,307			—

Net change in unrealized appreciation/depreciation on foreign currency related translations		(86,952	)		(1,697	)
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		41,831,539			(44,425,441	)

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$64,952,408			($40,527,955	)

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			89

Statements of Changes in Net Assets


MATTHEWS EMERGING MARKETS EQUITY FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$320,961			$659,139

Net realized gain (loss) on investments and foreign currency related transactions		(1,317,611	)		(4,261,238	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		3,348,099			(7,970,191	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(18,390	)		62,033
Net increase (decrease) in net assets resulting from operations		2,333,059			(11,510,257	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(177,005	)		(171,815	)

Institutional Class		(245,427	)		(486,489	)
Net decrease in net assets resulting from distributions		(422,432	)		(658,304	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(14,473,292	)		(3,923,820	)
Total increase (decrease) in net assets		(12,562,665	)		(16,092,381	)
NET ASSETS:

Beginning of period		33,464,768			49,557,149
End of period		$20,902,103			$33,464,768

MATTHEWS EMERGING MARKETS SUSTAINABLE FUTURE FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		($108,475	)		($428,029	)

Net realized gain (loss) on investments and foreign currency related transactions		2,623,772			3,676,316

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		11,359,262			(21,313,191	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(501,121	)		(6,668	)
Net increase (decrease) in net assets resulting from operations		13,373,438			(18,071,572	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(2,733,178	)		(1,649,628	)

Institutional Class		(12,590,629	)		(7,058,005	)
Net decrease in net assets resulting from distributions		(15,323,807	)		(8,707,633	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		39,167,464			72,234,041
Total increase (decrease) in net assets		37,217,095			45,454,836
NET ASSETS:

Beginning of period		172,307,992			126,853,156
End of period		$209,525,087			$172,307,992

See accompanying notes to financial statements.


90		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (continued)


MATTHEWS EMERGING MARKETS SMALL COMPANIES FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$447,608			($348,674	)

Net realized gain (loss) on investments and foreign currency related transactions		32,381,330			33,699,487

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		56,179,356			(103,113,237	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(3,307,422	)		862,730
Net increase (decrease) in net assets resulting from operations		85,700,872			(68,899,694	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(22,219,393	)		(10,642,526	)

Institutional Class		(26,772,365	)		(17,586,490	)
Net decrease in net assets resulting from distributions		(48,991,758	)		(28,229,016	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		209,240,985			68,567,370
Total increase (decrease) in net assets		245,950,099			(28,561,340	)
NET ASSETS:

Beginning of period		369,447,548			398,008,888
End of period		$615,397,647			$369,447,548

MATTHEWS ASIA GROWTH FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$1,278,490			($2,079,983	)

Net realized gain (loss) on investments and foreign currency related transactions		(63,110,443	)		(143,038,976	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		73,550,356			(406,306,763	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		219,136			5,625,551
Net increase (decrease) in net assets resulting from operations		11,937,539			(545,800,171	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(2,933,613	)		(6,372,932	)

Institutional Class		(4,255,554	)		(11,696,816	)
Net decrease in net assets resulting from distributions		(7,189,167	)		(18,069,748	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(265,553,683	)		(558,821,991	)
Total increase (decrease) in net assets		(260,805,311	)		(1,122,691,910	)
NET ASSETS:

Beginning of period		632,078,026			1,754,769,936
End of period		$371,272,715			$632,078,026

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			91

Statements of Changes in Net Assets (continued)


MATTHEWS PACIFIC TIGER FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$20,776,036			$24,615,390

Net realized gain (loss) on investments and foreign currency related transactions		(153,491,500	)		(52,075,313	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(68,512,121	)		(1,497,234,871	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		2,280,753			16,309,323
Net increase (decrease) in net assets resulting from operations		(198,946,832	)		(1,508,385,471	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(21,595,059	)		(88,898,319	)

Institutional Class		(42,763,667	)		(213,752,096	)
Net decrease in net assets resulting from distributions		(64,358,726	)		(302,650,415	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(1,496,444,792	)		(1,692,644,474	)
Total increase (decrease) in net assets		(1,759,750,350	)		(3,503,680,360	)
NET ASSETS:

Beginning of period		3,688,784,032			7,192,464,392
End of period		$1,929,033,682			$3,688,784,032


MATTHEWS ASIA INNOVATORS FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		($730,038	)		($2,461,191	)

Net realized gain (loss) on investments and foreign currency related transactions		(49,036,975	)		(296,415,093	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		33,755,905			(10,835,792	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(273,091	)		2,819,303
Net increase (decrease) in net assets resulting from operations		(16,284,199	)		(306,892,773	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(2,966	)		(60,056,072	)

Institutional Class		(287,289	)		(44,589,552	)
Net decrease in net assets resulting from distributions		(290,255	)		(104,645,624	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(142,790,496	)		(511,912,389	)
Total increase (decrease) in net assets		(159,364,950	)		(923,450,786	)
NET ASSETS:

Beginning of period		472,317,756			1,395,768,542
End of period		$312,952,806			$472,317,756

See accompanying notes to financial statements.


92		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (continued)


MATTHEWS CHINA FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$4,854,188			$217,849

Net realized gain (loss) on investments and foreign currency related transactions		(120,625,453	)		(150,068,125	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(33,001,967	)		(197,123,046	)
Net increase (decrease) in net assets resulting from operations		(148,773,232	)		(346,973,322	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(2,388,564	)		(32,362,149	)

Institutional Class		(1,692,606	)		(21,837,281	)
Net decrease in net assets resulting from distributions		(4,081,170	)		(54,199,430	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(144,473,909	)		(194,850,178	)
Total increase (decrease) in net assets		(297,328,311	)		(596,022,930	)
NET ASSETS:

Beginning of period		745,787,327			1,341,810,257
End of period		$448,459,016			$745,787,327

MATTHEWS CHINA SMALL COMPANIES FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$212,934			$728,732

Net realized gain (loss) on investments and foreign currency related transactions		(41,982,407	)		(88,967,075	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		16,919,259			(31,868,124	)
Net increase (decrease) in net assets resulting from operations		(24,850,214	)		(120,106,467	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(1,569,819	)		(2,034,204	)

Institutional Class		(602,345	)		(1,008,109	)
Net decrease in net assets resulting from distributions		(2,172,164	)		(3,042,313	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(38,583,201	)		(103,257,833	)
Total increase (decrease) in net assets		(65,605,579	)		(226,406,613	)
NET ASSETS:

Beginning of period		154,761,713			381,168,326
End of period		$89,156,134			$154,761,713

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			93

Statements of Changes in Net Assets (continued)


MATTHEWS INDIA FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		($129,393	)		($2,826,201	)

Net realized gain (loss) on investments and foreign currency related transactions		40,786,363			54,725,780

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		107,783,585			(138,570,199	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(11,036,039	)		12,032,808
Net increase (decrease) in net assets resulting from operations		137,404,516			(74,637,812	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(18,205,131	)		(69,440,851	)

Institutional Class		(4,445,067	)		(13,509,415	)
Net decrease in net assets resulting from distributions		(22,650,198	)		(82,950,266	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		45,588,815			(3,405,239	)
Total increase (decrease) in net assets		160,343,133			(160,993,317	)
NET ASSETS:

Beginning of period		602,782,243			763,775,560
End of period		$763,125,376			$602,782,243

MATTHEWS JAPAN FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$4,319,371			$5,372,949

Net realized gain (loss) on investments and foreign currency related transactions		(7,950,666	)		(169,997,728	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		108,256,039			(262,676,411	)
Net increase (decrease) in net assets resulting from operations		104,624,744			(427,301,190	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		—			(14,553,044	)

Institutional Class		—			(31,813,438	)
Net decrease in net assets resulting from distributions		—			(46,366,482	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(71,262,820	)		(448,315,849	)
Total increase (decrease) in net assets		33,361,924			(921,983,521	)
NET ASSETS:

Beginning of period		622,136,085			1,544,119,606
End of period		$655,498,009			$622,136,085

See accompanying notes to financial statements.


94		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (continued)


MATTHEWS ASIAN GROWTH AND INCOME FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$9,511,603			$14,604,960

Net realized gain (loss) on investments and foreign currency related transactions		22,132,607			(48,439,576	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(18,480,251	)		(169,291,091	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		151,746			662,900
Net increase (decrease) in net assets resulting from operations		13,315,705			(202,462,807	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(7,451,640	)		(17,020,543	)

Institutional Class		(4,542,858	)		(16,053,797	)
Net decrease in net assets resulting from distributions		(11,994,498	)		(33,074,340	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(286,872,429	)		(247,931,479	)
Total increase (decrease) in net assets		(285,551,222	)		(483,468,626	)
NET ASSETS:

Beginning of period		610,014,906			1,093,483,532
End of period		$324,463,684			$610,014,906

MATTHEWS ASIA DIVIDEND FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$23,120,869			$28,888,532

Net realized gain (loss) on investments and foreign currency related transactions		49,563,564			(261,201,228	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(16,269,332	)		(1,103,989,848	)

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		8,537,307			595,392
Net increase (decrease) in net assets resulting from operations		64,952,408			(1,335,707,152	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(5,562,611	)		(7,812,204	)

Institutional Class		(11,939,346	)		(18,595,761	)
Net decrease in net assets resulting from distributions		(17,501,957	)		(26,407,965	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(847,146,823	)		(1,527,382,129	)
Total increase (decrease) in net assets		(799,696,372	)		(2,889,497,246	)
NET ASSETS:

Beginning of period		1,851,369,979			4,740,867,225
End of period		$1,051,673,607			$1,851,369,979

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			95

Statements of Changes in Net Assets (continued)


MATTHEWS CHINA DIVIDEND FUND	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$3,897,486			$5,482,035

Net realized gain (loss) on investments and foreign currency related transactions		(18,837,805	)		(29,326,490	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(25,587,636	)		(39,972,339	)
Net increase (decrease) in net assets resulting from operations		(40,527,955	)		(63,816,794	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		(3,895,645	)		(8,463,697	)

Institutional Class		(2,282,770	)		(4,778,140	)
Net decrease in net assets resulting from distributions		(6,178,415	)		(13,241,837	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(55,897,379	)		(51,816,442	)
Total increase (decrease) in net assets		(102,603,749	)		(128,875,073	)
NET ASSETS:

Beginning of period		221,285,667			350,160,740
End of period		$118,681,918			$221,285,667

See accompanying notes to financial statements.


96		MATTHEWS ASIA FUNDS

Financial Highlights

Matthews Emerging Markets Equity Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,									Period Ended Dec. 31, 2020¹
INVESTOR CLASS	2023			2022			2021			Period Ended Dec. 31, 2020¹
Net Asset Value, beginning of period		$11.14			$14.34			$15.76			$10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.13			0.20			0.19			0.04
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.81			(3.20	)		(0.31	)		6.08
Total from investment operations		0.94			(3.00	)		(0.12	)		6.12
LESS DISTRIBUTIONS FROM:
Net investment income		(0.22	)		(0.20	)		(0.18	)		—
Net realized gains on investments		—			—			(1.12	)		(0.36	)
Total distributions		(0.22	)		(0.20	)		(1.30	)		(0.36	)
Net Asset Value, end of period		$11.86			$11.14			$14.34			$15.76
TOTAL RETURN		8.43%			(20.94%	)		(0.60%	)		61.23%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000’s)		$9,618			$10,111			$13,317			$9,851
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.70%			1.58%			1.52%			2.76%	⁴
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.12%			1.08%			1.13%			1.08%	⁴
Ratio of net investment income (loss) to average net assets		1.16%			1.46%			1.15%			0.45%	⁴
Portfolio turnover⁵		26.39%			63.08%			88.45%			62.30%	³

	Year Ended Dec. 31,									Period Ended Dec. 31, 2020¹
INSTITUTIONAL CLASS	2023			2022			2021			Period Ended Dec. 31, 2020¹
Net Asset Value, beginning of period		$11.13			$14.34			$15.77			$10.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.17			0.23			0.22			0.04
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.79			(3.21	)		(0.31	)		6.11
Total from investment operations		0.96			(2.98	)		(0.09	)		6.15
LESS DISTRIBUTIONS FROM:
Net investment income		(0.25	)		(0.23	)		(0.22	)		(0.02	)
Net realized gains on investments		—			—			(1.12	)		(0.36	)
Total distributions		(0.25	)		(0.23	)		(1.34	)		(0.38	)
Net Asset Value, end of period		$11.84			$11.13			$14.34			$15.77
TOTAL RETURN		8.63%			(20.81%	)		(0.43%	)		61.55%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000’s)		$11,284			$23,353			$36,240			$34,941
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.51%			1.47%			1.38%			2.65%	⁴
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		0.90%			0.90%			0.90%			0.90%	⁴
Ratio of net investment income (loss) to average net assets		1.45%			1.70%			1.33%			0.44%	⁴
Portfolio turnover⁵		26.39%			63.08%			88.45%			62.30%	³

1	The Fund commenced operations on April 29, 2020.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

5	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			97

Financial Highlights (continued)

Matthews Emerging Markets Sustainable Future Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$12.51			$15.37			$14.94			$11.08			$9.98
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		(0.02	)		(0.05	)		(0.07	)		(0.01	)		0.04
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.99			(2.14	)		1.85			4.72			1.21
Total from investment operations		0.97			(2.19	)		1.78			4.71			1.25
LESS DISTRIBUTIONS FROM:
Net investment income		(0.25	)		(0.04	)		—			(0.01	)		(0.03	)
Net realized gains on investments		(0.69	)		(0.63	)		(1.35	)		(0.84	)		(0.12	)
Total distributions		(0.94	)		(0.67	)		(1.35	)		(0.85	)		(0.15	)
Net Asset Value, end of year		$12.54			$12.51			$15.37			$14.94			$11.08
TOTAL RETURN		7.83%			(14.38%	)		11.76%			42.87%			12.55%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$38,176			$32,249			$39,612			$37,385			$19,291
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.23%			1.24%			1.20%			1.42%			1.54%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.23%			1.30%			1.40%			1.38%			1.42%
Ratio of net investment income (loss) to average net assets		(0.17%	)		(0.41%	)		(0.41%	)		(0.08%	)		0.41%
Portfolio turnover²		49.16%			31.53%			65.56%			84.60%			29.67%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$12.51			$15.38			$14.92			$11.06			$9.96
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		—	³		(0.04	)		(0.04	)		0.01			0.06
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		1.00			(2.14	)		1.85			4.72			1.21
Total from investment operations		1.00			(2.18	)		1.81			4.73			1.27
LESS DISTRIBUTIONS FROM:
Net investment income		(0.27	)		(0.06	)		—			(0.03	)		(0.05	)
Net realized gains on investments		(0.69	)		(0.63	)		(1.35	)		(0.84	)		(0.12	)
Total distributions		(0.96	)		(0.69	)		(1.35	)		(0.87	)		(0.17	)
Net Asset Value, end of year		$12.55			$12.51			$15.38			$14.92			$11.06
TOTAL RETURN		8.04%			(14.32%	)		11.98%			43.13%			12.74%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$171,349			$140,059			$87,241			$50,642			$36,008
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.10%			1.11%			1.07%			1.29%			1.41%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.10%			1.17%			1.20%			1.20%			1.24%
Ratio of net investment income (loss) to average net assets		(0.02%	)		(0.29%	)		(0.25%	)		0.09%			0.54%
Portfolio turnover²		49.16%			31.53%			65.56%			84.60%			29.67%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

3	Less than $0.01 per share.

See accompanying notes to financial statements.


98		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Emerging Markets Small Companies Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$23.08			$29.92			$25.93			$18.10			$15.50
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		—	²		(0.06	)		(0.17	)		(0.02	)		0.12
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		4.58			(4.92	)		5.90			7.92			2.57
Total from investment operations		4.58			(4.98	)		5.73			7.90			2.69
LESS DISTRIBUTIONS FROM:
Net investment income		(0.41	)		(0.09	)		—			(0.05	)		(0.09	)
Net realized gains on investments		(1.73	)		(1.77	)		(1.74	)		(0.02	)		—
Total distributions		(2.14	)		(1.86	)		(1.74	)		(0.07	)		(0.09	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			—	³
Net Asset Value, end of year		$25.52			$23.08			$29.92			$25.93			$18.10
TOTAL RETURN		19.88%			(16.84%	)		22.14%			43.68%			17.38%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$287,674			$141,254			$176,723			$99,573			$96,229
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.49%			1.49%			1.51%			1.57%			1.60%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.34%			1.37%			1.36%			1.39%			1.45%
Ratio of net investment income (loss) to average net assets		(0.01%	)		(0.24%	)		(0.55%	)		(0.11%	)		0.72%
Portfolio turnover⁴		26.92%			27.85%			50.82%			111.87%			59.10%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$23.04			$29.87			$25.87			$18.06			$15.46
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.04			—	²		(0.10	)		0.01			0.15
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		4.58			(4.92	)		5.88			7.91			2.58
Total from investment operations		4.62			(4.92	)		5.78			7.92			2.73
LESS DISTRIBUTIONS FROM:
Net investment income		(0.44	)		(0.14	)		(0.04	)		(0.09	)		(0.13	)
Net realized gains on investments		(1.73	)		(1.77	)		(1.74	)		(0.02	)		—
Total distributions		(2.17	)		(1.91	)		(1.78	)		(0.11	)		(0.13	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			—	³
Net Asset Value, end of year		$25.49			$23.04			$29.87			$25.87			$18.06
TOTAL RETURN		20.12%			(16.66%	)		22.39%			43.90%			17.65%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$327,724			$228,194			$221,286			$107,569			$85,006
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.38%			1.37%			1.38%			1.47%			1.46%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.15%			1.15%			1.16%			1.20%			1.24%
Ratio of net investment income (loss) to average net assets		0.16%			(0.01%	)		(0.34%	)		0.08%			0.85%
Portfolio turnover⁴		26.92%			27.85%			50.82%			111.87%			59.10%

1	Calculated using the average daily shares method.

2	Less than $0.01 per share.

3	The Fund charged redemption fees through October 31, 2019.

4	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			99

Financial Highlights (continued)

Matthews Asia Growth Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$20.84			$31.99			$39.44			$28.10			$22.49
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.03			(0.08	)		(0.24	)		(0.11	)		(0.03	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.70			(10.49	)		(5.56	)		13.16			5.91
Total from investment operations		0.73			(10.57	)		(5.80	)		13.05			5.88
LESS DISTRIBUTIONS FROM:
Net investment income		(0.38	)		—			—			(0.15	)		—
Net realized gains on investments		—			(0.58	)		(1.65	)		(1.56	)		(0.27	)
Total distributions		(0.38	)		(0.58	)		(1.65	)		(1.71	)		(0.27	)
Net Asset Value, end of year		$21.19			$20.84			$31.99			$39.44			$28.10
TOTAL RETURN		3.53%			(33.12%	)		(14.65%	)		46.76%			26.18%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$162,263			$225,923			$568,001			$784,085			$504,538
Ratio of expenses to average net assets		1.13%			1.13%			1.07%			1.08%			1.09%
Ratio of net investment income (loss) to average net assets		0.13%			(0.32%	)		(0.62%	)		(0.35%	)		(0.14%	)
Portfolio turnover²		77.32%			47.48%			42.37%			42.78%			38.05%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$21.11			$32.33			$39.82			$28.34			$22.65
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.07			(0.04	)		(0.19	)		(0.07	)		—	³
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.70			(10.60	)		(5.63	)		13.30			5.96
Total from investment operations		0.77			(10.64	)		(5.82	)		13.23			5.96
LESS DISTRIBUTIONS FROM:
Net investment income		(0.42	)		—			(0.02	)		(0.19	)		—
Net realized gains on investments		—			(0.58	)		(1.65	)		(1.56	)		(0.27	)
Total distributions		(0.42	)		(0.58	)		(1.67	)		(1.75	)		(0.27	)
Net Asset Value, end of year		$21.46			$21.11			$32.33			$39.82			$28.34
TOTAL RETURN		3.69%			(32.99%	)		(14.55%	)		47.01%			26.34%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$209,009			$406,155			$1,186,769			$1,269,702			$698,797
Ratio of expenses to average net assets		0.98%			0.98%			0.92%			0.95%			0.94%
Ratio of net investment income (loss) to average net assets		0.31%			(0.15%	)		(0.47%	)		(0.23%	)		—%	⁴
Portfolio turnover²		77.32%			47.48%			42.37%			42.78%			38.05%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

3	Less than $0.01 per share.

4	Less than 0.01%.

See accompanying notes to financial statements.


100		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Pacific Tiger Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$20.16			$27.54			$34.94			$28.74			$26.86
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.10			0.09			0.06			0.10			0.19
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		(1.10	)		(5.75	)		(1.60	)		8.10			2.68
Total from investment operations		(1.00	)		(5.66	)		(1.54	)		8.20			2.87
LESS DISTRIBUTIONS FROM:
Net investment income		(0.54	)		—			—			(0.08	)		(0.15	)
Net realized gains on investments		—			(1.72	)		(5.86	)		(1.92	)		(0.84	)
Total distributions		(0.54	)		(1.72	)		(5.86	)		(2.00	)		(0.99	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			—	²
Net Asset Value, end of year		$18.62			$20.16			$27.54			$34.94			$28.74
TOTAL RETURN		(4.87%	)		(20.73%	)		(4.41%	)		28.83%			10.72%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$707,717			$1,081,347			$1,835,266			$2,585,654			$2,536,844
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.12%			1.10%			1.06%			1.08%			1.08%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.12%			1.09%			1.03%			1.06%			1.05%
Ratio of net investment income (loss) to average net assets		0.49%			0.37%			0.17%			0.35%			0.66%
Portfolio turnover³		14.78%			5.61%			46.64%			38.11%			17.08%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$20.16			$27.50			$34.90			$28.71			$26.83
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.13			0.11			0.11			0.13			0.23
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		(1.10	)		(5.73	)		(1.60	)		8.11			2.68
Total from investment operations		(0.97	)		(5.62	)		(1.49	)		8.24			2.91
LESS DISTRIBUTIONS FROM:
Net investment income		(0.58	)		—			(0.05	)		(0.13	)		(0.19	)
Net realized gains on investments		—			(1.72	)		(5.86	)		(1.92	)		(0.84	)
Total distributions		(0.58	)		(1.72	)		(5.91	)		(2.05	)		(1.03	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			—	²
Net Asset Value, end of year		$18.61			$20.16			$27.50			$34.90			$28.71
TOTAL RETURN		(4.75%	)		(20.62%	)		(4.29%	)		28.98%			10.90%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$1,221,317			$2,607,437			$5,357,198			$6,172,995			$6,189,015
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		0.99%			0.97%			0.92%			0.94%			0.93%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		0.98%			0.96%			0.90%			0.92%			0.91%
Ratio of net investment income (loss) to average net assets		0.66%			0.48%			0.30%			0.46%			0.80%
Portfolio turnover³		14.78%			5.61%			46.64%			38.11%			17.08%

1	Calculated using the average daily shares method.

2	Less than $0.01 per share.

3	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			101

Financial Highlights (continued)

Matthews Asia Innovators Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$11.31			$18.86			$26.70			$14.55			$11.26
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		(0.02	)		(0.06	)		(0.16	)		(0.11	)		(0.01	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		(0.18	)		(4.49	)		(3.34	)		12.71			3.34
Total from investment operations		(0.20	)		(4.55	)		(3.50	)		12.60			3.33
LESS DISTRIBUTIONS FROM:
Net investment income		—	²		—			—			—			—
Net realized gains on investments		—			(3.00	)		(4.34	)		(0.45	)		(0.04	)
Total distributions		—	²		(3.00	)		(4.34	)		(0.45	)		(0.04	)
Net Asset Value, end of year		$11.11			$11.31			$18.86			$26.70			$14.55
TOTAL RETURN		(1.77%	)		(24.80%	)		(13.10%	)		86.72%			29.60%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$177,070			$272,950			$465,207			$631,101			$177,639
Ratio of expenses to average net assets		1.15%			1.18%			1.09%			1.10%			1.19%
Ratio of net investment income (loss) to average net assets		(0.21%	)		(0.40%	)		(0.59%	)		(0.60%	)		(0.04%	)
Portfolio turnover³		248.19%			118.08%			220.45%			119.81%			80.10%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$11.49			$19.08			$26.91			$14.64			$11.32
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		(0.01	)		(0.04	)		(0.11	)		(0.09	)		0.01
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		(0.18	)		(4.55	)		(3.38	)		12.81			3.35
Total from investment operations		(0.19	)		(4.59	)		(3.49	)		12.72			3.36
LESS DISTRIBUTIONS FROM:
Net investment income		(0.02	)		—			—			—			—
Net realized gains on investments		—			(3.00	)		(4.34	)		(0.45	)		(0.04	)
Total distributions		(0.02	)		(3.00	)		(4.34	)		(0.45	)		(0.04	)
Net Asset Value, end of year		$11.28			$11.49			$19.08			$26.91			$14.64
TOTAL RETURN		(1.62%	)		(24.73%	)		(12.97%	)		87.01%			29.71%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$135,882			$199,368			$930,562			$1,094,356			$126,911
Ratio of expenses to average net assets		1.02%			1.04%			0.93%			0.95%			1.05%
Ratio of net investment income (loss) to average net assets		(0.11%	)		(0.27%	)		(0.43%	)		(0.44%	)		0.10%
Portfolio turnover³		248.19%			118.08%			220.45%			119.81%			80.10%

1	Calculated using the average daily shares method.

2	Less than $0.01 per share.

3	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


102		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews China Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$14.50			$20.58			$27.00			$19.12			$14.37
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.09			—	²		0.03			0.05			0.16
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(2.88	)		(4.99	)		(3.25	)		8.17			4.80
Total from investment operations		(2.79	)		(4.99	)		(3.22	)		8.22			4.96
LESS DISTRIBUTIONS FROM:
Net investment income		(0.09	)		—			(0.05	)		(0.06	)		(0.21	)
Net realized gains on investments		—			(1.09	)		(3.15	)		(0.28	)		—
Total distributions		(0.09	)		(1.09	)		(3.20	)		(0.34	)		(0.21	)
Net Asset Value, end of year		$11.62			$14.50			$20.58			$27.00			$19.12
TOTAL RETURN		(19.22%	)		(24.40%	)		(12.26%	)		43.05%			34.56%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$300,132			$448,623			$710,844			$962,714			$718,633
Ratio of expenses to average net assets		1.15%			1.12%			1.06%			1.09%			1.09%
Ratio of net investment income (loss) to average net assets		0.65%			(0.01%	)		0.13%			0.22%			0.96%
Portfolio turnover³		49.60%			49.38%			92.28%			52.64%			68.93%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$14.48			$20.53			$26.94			$19.08			$14.33
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.11			0.01			0.10			0.09			0.20
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(2.88	)		(4.97	)		(3.26	)		8.15			4.80
Total from investment operations		(2.77	)		(4.96	)		(3.16	)		8.24			5.00
LESS DISTRIBUTIONS FROM:
Net investment income		(0.11	)		—			(0.10	)		(0.10	)		(0.25	)
Net realized gains on investments		—			(1.09	)		(3.15	)		(0.28	)		—
Total distributions		(0.11	)		(1.09	)		(3.25	)		(0.38	)		(0.25	)
Net Asset Value, end of year		$11.60			$14.48			$20.53			$26.94			$19.08
TOTAL RETURN		(19.11%	)		(24.31%	)		(12.07%	)		43.23%			34.90%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$148,327			$297,165			$630,966			$546,157			$183,762
Ratio of expenses to average net assets		1.01%			0.98%			0.91%			0.93%			0.91%
Ratio of net investment income (loss) to average net assets		0.82%			0.07%			0.38%			0.40%			1.17%
Portfolio turnover³		49.60%			49.38%			92.28%			52.64%			68.93%

1	Calculated using the average daily shares method.

2	Less than $0.01 per share.

3	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			103

Financial Highlights (continued)

Matthews China Small Companies Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$11.11			$16.44			$19.86			$12.84			$9.58
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.01			0.02			0.09			(0.03	)		0.14
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(1.96	)		(5.15	)		(0.80	)		10.42			3 24
Total from investment operations		(1.95	)		(5.13	)		(0.71	)		10.39			3.38
LESS DISTRIBUTIONS FROM:
Net investment income		(0.21	)		(0.20	)		(0.12	)		(0.13	)		(0.13	)
Net realized gains on investments		—			—			(2.59	)		(3.24	)		—
Total distributions		(0.21	)		(0.20	)		(2.71	)		(3.37	)		(0.13	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			0.01	²
Net Asset Value, end of year		$8.95			$11.11			$16.44			$19.86			$12.84
TOTAL RETURN		(17.51%	)		(31.26%	)		(3.59%	)		82.52%			35.41%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$66,174			$114,440			$218,398			$285,717			$63,432
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.55%			1.55%			1.48%			1.52%			1.62%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.41%			1.41%			1.43%			1.43%			1.42%
Ratio of net investment income (loss) to average net assets		0.09%			0.17%			0.44%			(0.14%	)		1.25%
Portfolio turnover³		59.05%			59.00%			119.65%			152.86%			68.17%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$11.12			$16.47			$19.90			$12.86			$9.59
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.04			0.06			0.13			0.04			0.15
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(1.98	)		(5.17	)		(0.80	)		10.42			3.26
Total from investment operations		(1.94	)		(5.11	)		(0.67	)		10.46			3.41
LESS DISTRIBUTIONS FROM:
Net investment income		(0.24	)		(0.24	)		(0.17	)		(0.18	)		(0.15	)
Net realized gains on investments		—			—			(2.59	)		(3.24	)		—
Total distributions		(0.24	)		(0.24	)		(2.76	)		(3.42	)		(0.15	)
Paid-in capital from redemption fees (Note 4)		—			—			—			—			0.01	²
Net Asset Value, end of year		$8.94			$11.12			$16.47			$19.90			$12.86
TOTAL RETURN		(17.37%	)		(31.08%	)		(3.35%	)		82.89%			35.68%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$22,983			$40,322			$162,770			$98,052			$32,376
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.41%			1.38%			1.31%			1.37%			1.51%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.20%			1.20%			1.20%			1.20%			1.24%
Ratio of net investment income (loss) to average net assets		0.36%			0.47%			0.63%			0.20%			1.34%
Portfolio turnover³		59.05%			59.00%			119.65%			152.86%			68.17%

1	Calculated using the average daily shares method.

2	The Fund charged redemption fees through October 31, 2019.

3	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


104		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews India Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$22.09			$28.17			$26.29			$23.27			$26.32
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		(0.01	)		(0.12	)		(0.11	)		0.01			(0.01	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		5.10			(2.58	)		4.81			3.81			(0.24	)
Total from investment operations		5.09			(2.70	)		4.70			3.82			(0.25	)
LESS DISTRIBUTIONS FROM:
Net investment income		(0.51	)		—			—			—			—
Net realized gains on investments		(0.30	)		(3.38	)		(2.82	)		(0.80	)		(2.80	)
Total distributions		(0.81	)		(3.38	)		(2.82	)		(0.80	)		(2.80	)
Net Asset Value, end of year		$26.37			$22.09			$28.17			$26.29			$23.27
TOTAL RETURN		23.10%			(9.92%	)		18.11%			16.51%			(0.88%	)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$614,103			$505,764			$635,067			$617,908			$786,881
Ratio of expenses to average net assets		1.14%			1.15%			1.10%			1.15%			1.11%
Ratio of net investment income (loss) to average net assets		(0.04%	)		(0.45%	)		(0.38%	)		0.05%			(0.03%	)
Portfolio turnover²		50.98%			41.35%			42.50%			57.38%			24.00%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$22.54			$28.64			$26.65			$23.55			$26.56
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.02			(0.08	)		(0.06	)		0.05			0.02
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		5.21			(2.64	)		4.87			3.85			(0.23	)
Total from investment operations		5.23			(2.72	)		4.81			3.90			(0.21	)
LESS DISTRIBUTIONS FROM:
Net investment income		(0.54	)		—			—			—			—
Net realized gains on investments		(0.30	)		(3.38	)		(2.82	)		(0.80	)		(2.80	)
Total distributions		(0.84	)		(3.38	)		(2.82	)		(0.80	)		(2.80	)
Net Asset Value, end of year		$26.93			$22.54			$28.64			$26.65			$23.55
TOTAL RETURN		23.32%			(9.83%	)		18.28%			16.65%			(0.76%	)

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$149,023			$97,018			$128,708			$90,053			$177,526
Ratio of expenses to average net assets		1.01%			1.01%			0.96%			1.03%			0.94%
Ratio of net investment income (loss) to average net assets		0.07%			(0.31%	)		(0.19%	)		0.24%			0.09%
Portfolio turnover²		50.98%			41.35%			42.50%			57.38%			24.00%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			105

Financial Highlights (continued)

Matthews Japan Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023		2022			2021			2020			2019
Net Asset Value, beginning of year		$14.90		$22.09			$25.27			$21.51			$18.53
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.09		0.07			0.09			0.07			0.11
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		2.59		(6.19	)		(0.52	)		6.25			4.73
Total from investment operations		2.68		(6.12	)		(0.43	)		6.32			4.84
LESS DISTRIBUTIONS FROM:
Net investment income		—		—			(0.24	)		(0.13	)		(0.12	)
Net realized gains on investments		—		(1.07	)		(2.51	)		(2.43	)		(1.74	)
Total distributions		—		(1.07	)		(2.75	)		(2.56	)		(1.86	)
Net Asset Value, end of year		$17.58		$14.90			$22.09			$25.27			$21.51
TOTAL RETURN		17.99%		(27.85%	)		(1.92%	)		29.82%			26.08%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$239,578		$208,329			$373,739			$1,101,820			$1,466,194
Ratio of expenses to average net assets		1.09%		1.05%			0.95%			0.95%			0.93%
Ratio of net investment income (loss) to average net assets		0.58%		0.41%			0.38%			0.31%			0.51%
Portfolio turnover²		100.59%		83.38%			70.30%			62.03%			25.42%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023		2022			2021			2020			2019
Net Asset Value, beginning of year		$14.93		$22.13			$25.32			$21.55			$18.57
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.12		0.09			0.05			0.05			0.11
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		2.58		(6.22	)		(0.46	)		6.29			4.74
Total from investment operations		2.70		(6.13	)		(0.41	)		6.34			4.85
LESS DISTRIBUTIONS FROM:
Net investment income		—		—			(0.27	)		(0.14	)		(0.13	)
Net realized gains on investments		—		(1.07	)		(2.51	)		(2.43	)		(1.74	)
Total distributions		—		(1.07	)		(2.78	)		(2.57	)		(1.87	)
Net Asset Value, end of year		$17.63		$14.93			$22.13			$25.32			$21.55
TOTAL RETURN		18.08%		(27.84%	)		(1.83%	)		29.85%			26.10%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$415,920		$413,807			$1,170,380			$548,968			$840,476
Ratio of expenses to average net assets		1.02%		0.97%			0.89%			0.91%			0.88%
Ratio of net investment income (loss) to average net assets		0.71%		0.55%			0.22%			0.25%			0.53%
Portfolio turnover²		100.59%		83.38%			70.30%			62.03%			25.42%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


106		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Asian Growth and Income Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023				2022			2021			2020			2019
Net Asset Value, beginning of year		$12.50		��		$16.07			$18.05			$15.73			$13.92
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.23				0.22			0.17			0.21			0.25
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.18				(3.17	)		(0.17	)		2.27			2.13
Total from investment operations		0.41				(2.95	)		—			2.48			2.38
LESS DISTRIBUTIONS FROM:
Net investment income		(0.34	)			(0.21	)		(0.20	)		(0.16	)		(0.35	)
Net realized gains on investments		—				(0.41	)		(1.78	)		—	²		(0.22	)
Total distributions		(0.34	)			(0.62	)		(1.98	)		(0.16	)		(0.57	)
Net Asset Value, end of year		$12.57				$12.50			$16.07			$18.05			$15.73
TOTAL RETURN		3.33%				(18.43%	)		0.04%			16.00%			17.26%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$244,698				$339,756			$541,744			$673,576			$723,815
Ratio of expenses to average net assets		1.15%				1.13%			1.07%			1.09%			1.08%
Ratio of net investment income (loss) to average net assets		1.78%				1.58%			0.91%			1.38%			1.67%
Portfolio turnover³		12.00%				13.16%			37.85%			36.27%			21.89%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023				2022			2021			2020			2019
Net Asset Value, beginning of year		$12.48				$16.04			$18.02			$15.70			$13.89
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.24				0.24			0.20			0.23			0.27
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.18				(3.16	)		(0.17	)		2.27			2.14
Total from investment operations		0.42				(2.92	)		0.03			2.50			2.41
LESS DISTRIBUTIONS FROM:
Net investment income		(0.36	)			(0.23	)		(0.23	)		(0.18	)		(0.38	)
Net realized gains on investments		—				(0.41	)		(1.78	)		—	²		(0.22	)
Total distributions		(0.36	)			(0.64	)		(2.01	)		(0.18	)		(0.60	)
Net Asset Value, end of year		$12.54				$12.48			$16.04			$18.02			$15.70
TOTAL RETURN		3.39%				(18.31%	)		0.18%			16.18%			17.46%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$79,766				$270,259			$551,740			$822,179			$743,951
Ratio of expenses to average net assets		1.02%				1.01%			0.94%			0.96%			0.94%
Ratio of net investment income (loss) to average net assets		1.91%				1.71%			1.10%			1.51%			1.80%
Portfolio turnover³		12.00%				13.16%			37.85%			36.27%			21.89%

1	Calculated using the average daily shares method.

2	Less than $0.01 per share.

3	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			107

Financial Highlights (continued)

Matthews Asia Dividend Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$13.24			$18.94			$22.63			$17.47			$16.05
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.19			0.13			0.18			0.15			0.28
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.42			(5.72	)		(0.81	)		5.23			1.50
Total from investment operations		0.61			(5.59	)		(0.63	)		5.38			1.78
LESS DISTRIBUTIONS FROM:
Net investment income		(0.15	)		(0.11	)		(0.19	)		(0.22	)		(0.36	)
Net realized gains on investments		—			—			(2.87	)		—			—
Total distributions		(0.15	)		(0.11	)		(3.06	)		(0.22	)		(0.36	)
Net Asset Value, end of year		$13.70			$13.24			$18.94			$22.63			$17.47
TOTAL RETURN		4.69%			(29.57%	)		(2.83%	)		31.25%			11.17%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$401,341			$602,694			$1,586,460			$2,292,262			$2,312,560
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		1.10%			1.10%			1.03%			1.03%			1.03%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		1.10%			1.10%			1.02%			1.02%			1.02%
Ratio of net investment income (loss) to average net assets		1.43%			0.84%			0.80%			0.85%			1.68%
Portfolio turnover²		75.88%			50.75%			47.41%			37.73%			30.32%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$13.23			$18.94			$22.62			$17.47			$16.04
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.21			0.14			0.21			0.16			0.30
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		0.41			(5.72	)		(0.80	)		5.22			1.50
Total from investment operations		0.62			(5.58	)		(0.59	)		5.38			1.80
LESS DISTRIBUTIONS FROM:
Net investment income		(0.17	)		(0.13	)		(0.22	)		(0.23	)		(0.37	)
Net realized gains on investments		—			—			(2.87	)		—			—
Total distributions		(0.17	)		(0.13	)		(3.09	)		(0.23	)		(0.37	)
Net Asset Value, end of year		$13.68			$13.23			$18.94			$22.62			$17.47
TOTAL RETURN		4.77%			(29.55%	)		(2.67%	)		31.29%			11.35%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$650,333			$1,248,676			$3,154,407			$2,908,674			$3,057,896
Ratio of expenses to average net assets before any reimbursement, waiver or recapture of expenses by Advisor and Administrator (Note 4)		0.99%			0.99%			0.92%			0.93%			0.93%
Ratio of expenses to average net assets after any reimbursement, waiver or recapture of expenses by Advisor and Administrator		0.99%			0.99%			0.91%			0.93%			0.92%
Ratio of net investment income (loss) to average net assets		1.55%			0.95%			0.93%			0.91%			1.80%
Portfolio turnover²		75.88%			50.75%			47.41%			37.73%			30.32%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


108		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews China Dividend Fund

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31,
INVESTOR CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$14.00			$17.73			$19.64			$16.20			$14.32
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.27			0.31			0.41			0.30			0.34
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(3.12	)		(3.27	)		(0.48	)		3.54			1.80
Total from investment operations		(2.85	)		(2.96	)		(0.07	)		3.84			2.14
LESS DISTRIBUTIONS FROM:
Net investment income		(0.44	)		(0.52	)		(0.49	)		(0.40	)		(0.26	)
Net realized gains on investments		—			(0.25	)		(1.35	)		—			—
Total distributions		(0.44	)		(0.77	)		(1.84	)		(0.40	)		(0.26	)
Net Asset Value, end of year		$10.71			$14.00			$17.73			$19.64			$16.20
TOTAL RETURN		(20.67%	)		(16.75%	)		(0.49%	)		24.22%			15.00%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$76,517			$137,066			$218,766			$269,192			$258,111
Ratio of expenses to average net assets		1.17%			1.20%			1.12%			1.15%			1.15%
Ratio of net investment income (loss) to average net assets		2.03%			2.12%			2.05%			1.79%			2.14%
Portfolio turnover²		27.30%			67.08%			68.25%			81.79%			65.69%

	Year Ended Dec. 31,
INSTITUTIONAL CLASS	2023			2022			2021			2020			2019
Net Asset Value, beginning of year		$14.00			$17.72			$19.64			$16.20			$14.32
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)¹		0.27			0.31			0.53			0.31			0.35
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(3.11	)		(3.24	)		(0.58	)		3.55			1.81
Total from investment operations		(2.84	)		(2.93	)		(0.05	)		3.86			2.16
LESS DISTRIBUTIONS FROM:
Net investment income		(0.46	)		(0.54	)		(0.52	)		(0.42	)		(0.28	)
Net realized gains on investments		—			(0.25	)		(1.35	)		—			—
Total distributions		(0.46	)		(0.79	)		(1.87	)		(0.42	)		(0.28	)
Net Asset Value, end of year		$10.70			$14.00			$17.72			$19.64			$16.20
TOTAL RETURN		(20.58%	)		(16.59%	)		(0.38%	)		24.37%			15.16%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000’s)		$42,165			$84,220			$131,395			$115,451			$122,630
Ratio of expenses to average net assets		1.04%			1.06%			0.97%			1.02%			1.01%
Ratio of net investment income (loss) to average net assets		2.09%			2.12%			2.65%			1.85%			2.25%
Portfolio turnover²		27.30%			67.08%			68.25%			81.79%			65.69%

1	Calculated using the average daily shares method.

2	The portfolio turnover rate is calculated on the Fund as a whole without distinguishing between classes of shares issued.

See accompanying notes to financial statements.


				matthewsasia.com \| 800.789.ASIA			109

Notes to Financial Statements

1.	ORGANIZATION

Matthews International Funds (d/b/a Matthews Asia Funds) (the “Trust”) is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As of December 31, 2023, the Trust issued twenty-three separate series of shares. This shareholder report pertains to thirteen of those series (each a “Fund”, and collectively, the “Funds”): Matthews Emerging Markets Equity Fund, Matthews Emerging Markets Sustainable Future Fund, Matthews Emerging Markets Small Companies Fund, Matthews Asia Growth Fund, Matthews Pacific Tiger Fund, Matthews Asia Innovators Fund, Matthews China Fund, Matthews China Small Companies Fund, Matthews India Fund, Matthews Japan Fund, Matthews Asian Growth and Income Fund, Matthews Asia Dividend Fund and Matthews China Dividend Fund. Each Fund, offers two classes of shares: Investor Class and Institutional Class. Each class of shares has identical voting, dividend, liquidation and other rights and the same terms and conditions, except each class may be subject to different class expenses as outlined in the relevant prospectus and each class has exclusive voting rights with respect to matters solely affecting such class. The other ten separate series of the Trust are Exchange Traded Funds and are covered in a separate shareholder report.

2.	SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Funds in preparation of their financial statements. Each Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services—Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

SECURITY VALUATION: Pursuant to Rule 2a-5 under the 1940 Act, the Funds’ Board of Trustees (the “Board”) has designated authority to a Valuation Designee, Matthews International Capital Management, LLC (“Matthews”), the Funds’ investment adviser, to make fair valuation determinations under adopted procedures, subject to Board oversight. Matthews has formed a Valuation Committee (the “Valuation Committee”) to administer the pricing and valuation of portfolio securities and other assets and liabilities and to ensure that prices determined by Matthews or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value. The value of the Trust’s securities is based on market quotations for those securities, or on their fair value determined by the valuation policies approved by the Board. Market quotations and valuation information are provided by commercial pricing services or securities dealers that are independent of the Funds and Matthews in accordance with procedures established by the Valuation Designee. Foreign exchange-traded securities are valued as of the close of trading on the primary exchange on which they trade. Securities that trade in over-the-counter markets, including most debt securities (bonds), may be valued by other third-party vendors or by using indicative bid quotations from dealers or market makers, or other available market information. Market values for securities are determined based on quotations, market data or other information from the principal (or most advantageous) market on which the security is traded. Market quotations for equity securities used by the Funds include last reported sale prices, or, if such prices are not reported or available, bid and ask prices. Swap agreements are valued utilizing quotes received daily by the Funds’ pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades and values of the underlying reference instruments. Foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined at the close of business on the New York Stock Exchange (“NYSE”). Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. The Funds may also utilize independent pricing services to assist them in determining a current market value for each security based on sources believed to be reliable.

When fair value pricing is employed, the prices of securities used by a Fund to calculate its Net Asset Value (“NAV”) may differ from any quoted or published prices for the same securities for that day. Events affecting the value of foreign investments may occur between the time at which they are determined and when the Funds calculate their NAV, which is normally the close of trading on the NYSE. If such events render market quotations unreliable, and the impact of such events can be reasonably determined, the investments will be valued at their fair value in accordance with pricing policies. The fair value of a security held by the Funds may be determined using the services of third-party pricing services to assist in this process.

The books and records of the Funds are maintained in U.S. dollars. Transactions, portfolio securities, and assets and liabilities denominated in a foreign currency are translated and recorded in U.S. dollars at the prevailing exchange rate as of the close of trading on the NYSE. The Fund does not isolate the effect of changes in foreign exchange rates from changes in market prices on securities held. Accordingly, such changes are included within Change in net unrealized appreciation/depreciation on investments on the Statement of Operations. Translation gains or losses resulting from changes in the exchange rate during the reporting period and realized gains and losses on the settlement of foreign currency transactions are reported in the results of operations for the current period. The Funds isolate that portion of gains and losses on investments in fixed income securities that is due to changes in foreign exchange rate from that which is due to changes in market prices of securities.

Foreign securities held by the Funds may be traded on days and at times when the NYSE is closed. Accordingly, the value of the Funds may be significantly affected on days when shareholders have no access to the Funds.

FAIR VALUE MEASUREMENTS: The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:

Level 1: Unadjusted quoted prices in active markets for identical securities (foreign securities that are valued based on market quotations).

Level 2: Other significant observable inputs. Certain foreign securities may be fair valued by Matthews using information such as quoted prices for similar securities, interest rates, prepayment speeds, credit risk, and foreign exchange. Additionally, external pricing services are used when the Funds determine that events affecting the value of foreign securities which occur between the time at which they are determined and the close of trading on the NYSE render market quotations unreliable.

Level 3: Significant unobservable inputs. Level 3 securities are valued based on significant unobservable inputs as determined under procedures approved by the Board. Characterization of such securities as Level 3 securities are not necessarily an indication of their liquidity or the risk associated with investing in these securities. A significant change in the unobservable inputs could result in a significantly lower or higher value in such Level 3 securities and could impact overall Fund performance.


110		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

Levels for Multi-Country Funds (1 of 2):

Summary of inputs used to determine the fair valuation of multi-country Funds’ investments as of December 31, 2023.


	Matthews Emerging Markets Equity Fund		Matthews Emerging Markets Sustainable Future Fund		Matthews Emerging Markets Small Companies Fund		Matthews Asia Growth Fund
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Brazil		$748,977		$1,642,959		$—		$—
Chile		—		1,476,170		21,637,359		—
China/Hong Kong		745,532		29,044,300		53,984,337		28,314,321
Estonia		—		1,062,240		—		—
France		505,889		—		—		—
India		1,777,082		—		—		—
Kazakhstan		313,812		—		—		—
Mexico		1,875,982		—		626,837		—
Netherlands		—		—		—		4,300,820
Philippines		249,668		—		5,521,449		—
Romania		—		2,890,504		—		—
Saudi Arabia		201,261		—		—		—
Taiwan		—		—		—		10,695,464
Turkey		—		—		3,498,809		—
United Arab Emirates		206,079		—		1,530,647		—
United States		1,151,736		7,458,972		—		11,323,915
Sub-total		7,776,018		43,575,145		86,799,438		54,634,520
Level 2: Other Significant Observable Inputs
Common Equities:
Australia		502,280		—		—		9,416,070
Bangladesh		—		1,228,075		2,844,698		—
Brazil		1,537,878		14,642,510		58,382,003		—
China/Hong Kong		2,552,876		51,465,092		123,174,892		35,436,851
France		267,325		—		—		—
India		1,747,432		42,602,943		146,277,512		67,503,173
Indonesia		462,057		—		8,982,642		15,387,273
Japan		—		—		—		136,514,940
Jordan		—		2,369,196		—		—
Philippines		310,954		—		8,699,805		5,697,364
Poland		419,517		7,020,895		10,086,420		—
Saudi Arabia		—		4,825,639		10,554,444		—
South Korea		302,314		11,088,848		44,599,337		17,325,692
Switzerland		295,586		—		—		—
Taiwan		1,399,523		22,561,688		71,506,126		22,905,661
Thailand		—		—		5,698,550		4,458,492
United Arab Emirates		222,861		—		—		—
United Kingdom		435,320		—		—		—
Vietnam		1,055,502		3,208,861		27,762,042		—
Sub-total		11,511,425		161,013,747		518,568,471		314,645,516
Preferred Equities:
Brazil		—		—		10,419,851		—
South Korea		1,270,389		8,392,916		—		—
Level 3: Significant Unobservable Inputs
Common Equities:
Russia		1,875		—		25,119		—
Total Market Value of Investments		$20,559,707		$212,981,808		$615,812,879		$369,280,036


				matthewsasia.com \| 800.789.ASIA			111

Notes to Financial Statements (continued)

Levels for Multi-Country Funds (2 of 2):

Summary of inputs used to determine the fair valuation of multi-country Funds’ investments as of December 31, 2023.


	Matthews Pacific Tiger Fund		Matthews Asia Innovators Fund		Matthews Asian Growth and Income Fund		Matthews Asia Dividend Fund
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Brazil		$—		$3,469,961		$—		$—
China/Hong Kong		104,467,100		50,461,406		11,193,918		16,926,685
Netherlands		—		5,900,948		—		—
India		—		—		5,338,928		—
Philippines		40,377,714		—		—		—
Singapore		—		—		—		16,134,315
Taiwan		—		—		—		14,031,576
United States		—		15,678,986		4,768,620		—
Sub-total		144,844,814		75,511,301		21,301,466		47,092,576
Level 2: Other Significant Observable Inputs
Convertible Corporate Bonds^a		—		—		26,367,912		—
Common Equities:
Australia		—		—		4,086,902		109,391,245
Bangladesh		—		—		—		5,193,820
China/Hong Kong		572,084,691		52,453,194		110,134,497		263,231,321
France		—		—		11,216,575		—
India		389,340,586		80,014,559		33,597,311		87,223,080
Indonesia		53,718,788		11,044,000		8,144,534		26,667,536
Japan		—		—		—		334,974,451
Philippines		—		—		6,178,281		—
Singapore		29,552,529		—		19,215,419		20,978,878
South Korea		276,636,576		43,719,269		31,166,085		68,513,474
Taiwan		364,382,101		46,624,510		40,773,006		79,608,080
Thailand		64,907,821		—		5,044,322		16,997,974
Vietnam		66,217,201		—		—		15,359,353
Sub-total		1,816,840,293		233,855,532		269,556,932		1,028,139,212
Total Market Value of Investments		$1,961,685,107		$309,366,833		$317,226,310		$1,075,231,788

a	Industry, countries, or security types are disclosed on the Schedule of Investments.


112		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

Levels for Single Country Funds:

Summary of inputs used to determine the fair valuation of the single country Funds’ investments as of December 31, 2023.


	Matthews China Fund		Matthews China Small Companies Fund		Matthews India Fund		Matthews Japan Fund		Matthews China Dividend Fund
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Communication Services		$8,148,023		$4,617,305		$—		$—		$1,999,861
Consumer Discretionary		47,843,263		1,967,783		4,455,028		—		8,671,877
Consumer Staples		5,201,522		—		8,521,804		—		—
Health Care		16,692		2,326,068		15,049,926		—		—
Industrials		—		2,012,017		—		—		2,448,243
Information Technology		—		3,724,637		—		—		—
Real Estate		17,346,208		—		—		—		2,940,802
Sub-total		78,555,708		14,647,810		28,026,758		—		16,060,783
Level 2: Other Significant Observable Inputs
Common Equities:
Communication Services		60,646,997		1,315,870		1,850,031		28,052,671		18,460,844
Consumer Discretionary		115,812,983		17,547,448		92,309,180		131,494,250		23,786,246
Consumer Staples		26,419,451		8,120,739		59,828,259		32,761,558		10,342,509
Energy		8,358,996		—		40,455,704		—		3,566,098
Financials		80,678,065		2,451,327		261,155,537		69,760,689		18,194,379
Health Care		21,800,881		7,790,241		58,904,180		37,452,979		6,621,667
Industrials		30,166,169		16,195,620		90,230,180		136,800,100		4,228,705
Information Technology		23,218,892		12,945,002		107,617,943		144,170,310		6,045,289
Materials		—		—		34,155,345		41,486,268		5,263,145
Real Estate		9,693,266		5,913,211		6,080,854		16,354,407		4,910,364
Utilities		3,246,203		2,462,334		7,552,660		—		—
Sub-total		380,041,903		74,741,792		760,139,873		638,333,232		101,419,246
Non Convertible Corporate Bonds:
Consumer Staples		—		—		23,704		—		—
Total Market Value of Investments		$458,597,611		$89,389,602		$788,190,335		$638,333,232		$117,480,029

Changes in the Balances of Level 3 Securities:

The Funds’ policy is to recognize transfers in and transfers out of Level 3 during the reporting period.


	Matthews Emerging Markets Equity Fund			Matthews Emerging Markets Small Companies Fund			Matthews China Small Companies Fund
	Common Equities— Russia			Common Equities— Russia			Common Equities— Real Estate
Balance as of 12/31/22 (market value)		$2,177			$30,067			$250

Accrued discounts/premiums		—			—			—

Realized gain/(loss)		—			—			(56,386	)

Change in unrealized appreciation/(depreciation)		(302	)		(4,948	)		64,433

Purchases		—			—			—

Sales		—			—			(8,297	)

Transfers in to Level 3		—			—			—

Transfer out of Level 3		—			—			—
Balance as of 12/31/23 (market value)		$1,875			$25,119			$—
Net change in unrealized appreciation/depreciation on Level 3 investments held as of 12/31/23*		($302	)		($4,948	)		$—

*	Included in the related amounts on the Statements of Operations.


				matthewsasia.com \| 800.789.ASIA			113

Notes to Financial Statements (continued)

expropriation or confiscatory taxation, limitation on the removal of funds or other assets, currency crises and exchange controls, the imposition of foreign withholding tax on the interest income payable on such instruments, the possible seizure or nationalization of foreign deposits or assets, or the adoption of other foreign government restrictions that might adversely affect the foreign securities held by the Funds. Additionally, Emerging Market and Asia Pacific countries may utilize formal or informal currency exchange controls or “capital controls” that may limit the ability to repatriate investments or income or adversely affect the value of portfolio investments. The economies of many Emerging Market and Asia Pacific countries differ from the economies of more developed countries in many respects, such as their rate of growth, inflation, capital reinvestment, resource self-sufficiency and dependence on other economies, financial system stability, the national balance of payments position and sensitivity to changes in global trade.

Certain Emerging Market and Asia Pacific countries are highly dependent upon and may be affected by developments in the economies of other countries. Non-U.S. companies are subject to different accounting, auditing, and financial reporting standards, practices, and requirements than U.S. companies. There is generally less government regulation of stock exchanges, brokers, and listed companies abroad than in the United States, which may result in less transparency with respect to a company’s operations, and make obtaining information about them more difficult (or such information may be unavailable).

Among other risks of investing in foreign markets, particularly those of emerging and frontier markets in which the Funds invest, are the variable quality and reliability of financial information and related audits of companies. In some cases, financial information and related audits can be unreliable and not subject to verification. Auditing firms in some of these markets are not subject to independent inspection or oversight of audit quality. For example, China does not allow the Public Company Accounting Oversight Board to inspect the work that auditors perform in China for Chinese companies that sell stock into U.S. markets. This can result in investment decisions being made based on flawed or misleading information.

Foreign stock markets, particularly those of emerging and frontier markets in which the Funds invest, may not be as developed or efficient as those in more developed markets such as the United States, and the absence of negotiated brokerage commissions in certain countries may result in higher brokerage fees. The time between the trade and settlement dates of securities transactions on foreign exchanges ranges from one day to four weeks or longer and may result in higher custody charges. Custodial arrangements may be less well developed than in the United States. Foreign securities are generally denominated and pay distributions in foreign currencies, exposing the Funds to changes in foreign currency exchange rates. Investing in any Emerging Market or Asia Pacific country will also entail risks specific and unique to that country, and these risks can be significant and change rapidly.

Changes in interest rates in each of the countries in which the Funds may invest, as well as interest rates in more-developed countries, may cause a decline in the market value of an investment. Generally, fixed income securities will decrease in value when interest rates rise and can be expected to rise in value when interest rates decline. As interest rates decline, debt issuers may repay or refinance their loans or obligations earlier than anticipated.

The Funds may invest 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 Fund) 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.

VIEs are a longstanding industry practice and well known to officials and regulators in China; however, VIEs are not formally recognized under Chinese law. Recently, the government of China provided new guidance to and placed restrictions on China-based companies raising capital offshore, including through VIE structures. 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.

In February 2022, Russian forces entered Ukraine and commenced an armed conflict. Economic sanctions have since been imposed on Russia and certain of its citizens, including the exclusion of Russia from the SWIFT global payments network. As a result, Russian-related stocks and debt have since suffered significant declines in value. The ongoing conflict, together with growing turmoil from fluctuations in commodity prices and foreign exchange rates, has the potential to impact adversely global economies and has driven a sharp increase in volatility across markets. The duration of the Russian-Ukraine conflict and its effect on financial markets cannot be determined with certainty. The Funds’ performance could be negatively impacted if the value of a portfolio holding were harmed by these and such other events. Management is actively monitoring these events. As of December 31, 2023, the Russian positions held across the Matthews Asia Funds were valued near zero.

DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of Matthews Asian Growth and Income Fund and Matthews China Dividend Fund to distribute net investment income on a semi-annual basis and capital gains, if any, annually. It is the policy of Matthews Asia Dividend Fund to distribute net investment income on a quarterly basis and capital gains, if any, annually. Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from U.S. GAAP.


114		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

The tax character of distributions paid for the fiscal years ended December 31, 2023 and December 31, 2022 were as follows:


YEAR ENDED DECEMBER 31, 2023	Ordinary Income		Net Long-Term Capital Gains		Total Taxable Distributions
Matthews Emerging Markets Equity Fund		$422,432		$—		$422,432
Matthews Emerging Markets Sustainable Future Fund		7,022,135		8,301,672		15,323,807
Matthews Emerging Markets Small Companies Fund		9,668,640		39,323,118		48,991,758
Matthews Asia Growth Fund		7,189,167		—		7,189,167
Matthews Pacific Tiger Fund		64,358,726		—		64,358,726
Matthews Asia Innovators Fund		290,255		—		290,255
Matthews China Fund		4,081,170		—		4,081,170
Matthews China Small Companies Fund		2,172,164		—		2,172,164
Matthews India Fund		14,188,398		8,461,800		22,650,198
Matthews Japan Fund		—		—		—
Matthews Asian Growth and Income Fund		11,994,498		—		11,994,498
Matthews Asia Dividend Fund		17,501,957		—		17,501,957
Matthews China Dividend Fund		6,178,415		—		6,178,415


YEAR ENDED DECEMBER 31, 2022	Ordinary Income		Net Long-Term Capital Gains		Total Taxable Distributions
Matthews Emerging Markets Equity Fund		$658,304		$—		$658,304
Matthews Emerging Markets Sustainable Future Fund		1,492,800		7,214,833		8,707,633
Matthews Emerging Markets Small Companies Fund		3,923,578		24,305,438		28,229,016
Matthews Asia Growth Fund		5		18,069,743		18,069,748
Matthews Pacific Tiger Fund		16,179,343		286,471,072		302,650,415
Matthews Asia Innovators Fund		—		104,645,624		104,645,624
Matthews China Fund		240		54,199,190		54,199,430
Matthews China Small Companies Fund		3,042,313		—		3,042,313
Matthews India Fund		708,348		82,241,918		82,950,266
Matthews Japan Fund		—		46,366,482		46,366,482
Matthews Asian Growth and Income Fund		12,257,793		20,816,547		33,074,340
Matthews Asia Dividend Fund		26,407,965		—		26,407,965
Matthews China Dividend Fund		9,296,913		3,944,924		13,241,837

INVESTMENT TRANSACTIONS AND INCOME: Securities transactions are accounted for on the date the securities are purchased or sold or on the following business day. Financial statements reflect security transactions on trade date. Gains or losses on the sale of securities are determined on the identified cost basis. Interest income is recorded on the accrual basis. Interest income, including amortization and accretion of premiums and discounts on debt securities, is recognized daily on an accrual basis. Dividend income is generally recorded on the ex-dividend date net of any foreign taxes withheld at the source. Dividend income for certain issuers headquartered in countries which the Funds invest may not be recorded until approved by the shareholders (which may occur after the ex-dividend date) if, in the judgment of management, such dividends are not reasonably determined as of the ex-dividend date. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Funds may be subject to foreign taxation related to income received, capital gains on the sale of securities and certain foreign currency transactions in the foreign jurisdictions in which they invest. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Funds invest. When a capital gain tax is determined to apply, the Funds record an estimated deferred tax liability in an amount that may be payable if the securities were disposed of on the valuation date.

FUND EXPENSE ALLOCATIONS: The Funds account separately for the assets, liabilities and operations of each Fund. Estimated expenses are accrued daily. Direct expenses of each Fund or class are charged to that Fund or class while general expenses are allocated pro-rata among the Funds based on net assets or other appropriate methods.

CASH, CASH OVERDRAFTS, AND FOREIGN CURRENCY: When any of the Funds’ cash balances are overdrawn, a Fund is charged an overdraft fee by the custodian based on the BBH Overdraft Base Rate which are set daily reflecting BBH’s effective trading rate in the relevant local money markets on each day. In markets where a true money market rate is not available, or is not reflective of the market, the BBH Treasury Group sets overdraft rates on a market-by-market basis, taking into consideration market standards and conditions.

QFI accounts (i.e., the accounts through which the QFI quota is accessed) are required by the local market to maintain a cash reserve. The cash reserve is based upon a fixed ratio of the QFI’s approved investment quota, which is defined as the amount remitted into its special Renminbi (RMB) cash account. These amounts, if any, are included in “Segregated foreign currency at value” on the Statements of Assets and Liabilities. The fixed ratio is set at 0.08 percent for the Shanghai and 0.06 percent for the Shenzhen market.

H.	USE OF ESTIMATES: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

RECENT ACCOUNTING GUIDANCE: The FASB issued Accounting Standards Update (ASU), ASU 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020 and ASU 2021-01 in January 2021 which provided further amendments and clarifications to Topic 848. These ASUs provide optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR), and other interbank-offered


				matthewsasia.com \| 800.789.ASIA			115

Notes to Financial Statements (continued)

based reference rates, through December 31, 2022. In December, 2022, FASB issued ASU 2022-06 which defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. Management intends to rely upon the relief provided under Topic 848, which is not expected to have a material impact on the fund’s financial statements.

In June 2022, the FASB issued Accounting Standards Update (ASU), ASU 2022-03, Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments under this ASU are effective for fiscal years beginning after December 15, 2023; however, the funds opted to early adopt, as permitted, effective December 1, 2022. Adoption of the guidance did not have a material impact on the fund’s financial statements.

3.	CAPITAL SHARE TRANSACTIONS


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Shares			Amount			Shares			Amount
MATTHEWS EMERGING MARKETS EQUITY FUND

Investor Class

Shares sold		130,199			$1,517,088			543,935			$6,760,608

Shares issued through reinvestment of distributions		14,802			172,882			14,921			169,949

Shares redeemed		(241,424	)		(2,808,019	)		(580,296	)		(6,968,303	)
Net (decrease)		(96,423	)		($1,118,049	)		(21,440	)		($37,746	)
Institutional Class

Shares sold		135,272			$1,568,754			538,021			$6,550,963

Shares issued through reinvestment of distributions		11,876			138,360			32,061			364,856

Shares redeemed		(1,291,280	)		(15,062,357	)		(999,790	)		(10,801,893	)
Net (decrease)		(1,144,132	)		($13,355,243	)		(429,708	)		($3,886,074	)
MATTHEWS EMERGING MARKETS SUSTAINABLE FUTURE FUND

Investor Class

Shares sold		1,400,341			$18,501,952			1,098,927			$14,356,992

Shares issued through reinvestment of distributions		218,988			2,728,585			126,489			1,643,095

Shares redeemed		(1,153,317	)		(15,028,964	)		(1,223,916	)		(16,262,366	)
Net increase (decrease)		466,012			$6,201,573			1,500			($262,279	)
Institutional Class

Shares sold		9,725,550			$127,823,168			8,359,951			$109,214,942

Shares issued through reinvestment of distributions		934,309			11,650,833			520,431			6,765,600

Shares redeemed		(8,197,384	)		(106,508,110	)		(3,359,345	)		(43,484,222	)
Net increase		2,462,475			$32,965,891			5,521,037			$72,496,320
MATTHEWS EMERGING MARKETS SMALL COMPANIES FUND

Investor Class

Shares sold		6,657,405			$171,573,564			1,463,829			$36,219,282

Shares issued through reinvestment of distributions		805,324			20,414,960			435,633			10,354,992

Shares redeemed		(2,312,400	)		(59,107,206	)		(1,685,415	)		(43,078,500	)
Net increase		5,150,329			$132,881,318			214,047			$3,495,774
Institutional Class

Shares sold		6,161,600			$158,396,820			4,719,237			$119,349,047

Shares issued through reinvestment of distributions		932,178			23,593,436			709,335			16,832,529

Shares redeemed		(4,141,488	)		(105,630,589	)		(2,933,352	)		(71,109,980	)
Net increase		2,952,290			$76,359,667			2,495,220			$65,071,596
MATTHEWS ASIA GROWTH FUND

Investor Class

Shares sold		681,889			$14,671,656			2,196,500			$53,440,225

Shares issued through reinvestment of distributions		133,749			2,784,644			280,586			6,105,563

Shares redeemed		(4,000,268	)		(83,059,590	)		(9,394,517	)		(217,632,827	)
Net (decrease)		(3,184,630	)		($65,603,290	)		(6,917,431	)		($158,087,039	)
Institutional Class

Shares sold		2,171,266			$46,938,027			8,636,741			$205,709,835

Shares issued through reinvestment of distributions		183,188			3,861,598			461,447			10,165,668

Shares redeemed		(11,858,416	)		(250,750,018	)		(26,559,936	)		(616,610,455	)
Net (decrease)		(9,503,962	)		($199,950,393	)		(17,461,748	)		($400,734,952	)


116		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Shares			Amount			Shares			Amount
MATTHEWS PACIFIC TIGER FUND

Investor Class

Shares sold		2,622,151			$53,264,269			6,112,939			$142,892,124

Shares issued through reinvestment of distributions		1,153,844			20,936,017			4,149,003			86,008,839

Shares redeemed		(19,399,003	)		(376,726,108	)		(23,272,445	)		(523,023,023	)
Net (decrease)		(15,623,008	)		($302,525,822	)		(13,010,503	)		($294,122,060	)
Institutional Class

Shares sold		28,865,705			$594,631,720			62,395,908			$1,443,573,678

Shares issued through reinvestment of distributions		2,010,240			36,465,745			9,622,597			199,476,439

Shares redeemed		(94,570,201	)		(1,825,016,435	)		(137,484,729	)		(3,041,572,531	)
Net (decrease)		(63,694,256	)		($1,193,918,970	)		(65,466,224	)		($1,398,522,414	)
MATTHEWS ASIA INNOVATORS FUND

Investor Class

Shares sold		3,379,530			$39,588,998			7,678,394			$115,859,588

Shares issued through reinvestment of distributions		259			2,861			4,958,740			58,612,306

Shares redeemed		(11,577,974	)		(127,586,880	)		(13,166,923	)		(190,724,602	)
Net (decrease)		(8,198,185	)		($87,995,021	)		(529,789	)		($16,252,708	)
Institutional Class

Shares sold		6,073,905			$71,458,317			9,489,396			$148,205,928

Shares issued through reinvestment of distributions		25,503			285,889			3,693,765			44,362,122

Shares redeemed		(11,400,103	)		(126,539,681	)		(44,606,226	)		(688,227,731	)
Net (decrease)		(5,300,695	)		($54,795,475	)		(31,423,065	)		($495,659,681	)
MATTHEWS CHINA FUND

Investor Class

Shares sold		5,405,372			$76,137,353			6,751,257			$111,112,645

Shares issued through reinvestment of distributions		205,358			2,318,493			2,084,117			31,178,384

Shares redeemed		(10,724,293	)		(141,161,279	)		(12,430,268	)		(194,631,328	)
Net (decrease)		(5,113,563	)		($62,705,433	)		(3,594,894	)		($52,340,299	)
Institutional Class

Shares sold		8,772,746			$124,615,158			15,868,949			$265,191,549

Shares issued through reinvestment of distributions		140,159			1,579,591			1,343,972			20,078,939

Shares redeemed		(16,651,610	)		(207,963,225	)		(27,424,340	)		(427,780,367	)
Net (decrease)		(7,738,705	)		($81,768,476	)		(10,211,419	)		($142,509,879	)
MATTHEWS CHINA SMALL COMPANIES FUND

Investor Class

Shares sold		1,298,646			$14,331,798			3,436,963			$44,992,214

Shares issued through reinvestment of distributions		175,856			1,551,048			173,336			1,984,698

Shares redeemed		(4,378,721	)		(44,437,991	)		(6,599,506	)		(82,835,265	)
Net (decrease)		(2,904,219	)		($28,555,145	)		(2,989,207	)		($35,858,353	)
Institutional Class

Shares sold		1,047,082			$11,271,484			2,927,129			$38,281,777

Shares issued through reinvestment of distributions		66,880			589,214			78,949			904,757

Shares redeemed		(2,169,833	)		(21,888,754	)		(9,263,348	)		(106,586,014	)
Net (decrease)		(1,055,871	)		($10,028,056	)		(6,257,270	)		($67,399,480	)
MATTHEWS INDIA FUND

Investor Class

Shares sold		3,919,696			$95,491,976			1,593,397			$42,087,227

Shares issued through reinvestment of distributions		676,925			17,586,533			2,952,961			67,091,273

Shares redeemed		(4,205,352	)		(99,370,862	)		(4,188,976	)		(106,860,935	)
Net increase		391,269			$13,707,647			357,382			$2,317,565
Institutional Class

Shares sold		2,213,514			$55,491,165			894,519			$22,947,980

Shares issued through reinvestment of distributions		136,550			3,622,667			456,719			10,591,311

Shares redeemed		(1,121,111	)		(27,232,664	)		(1,541,629	)		(39,262,095	)
Net increase (decrease)		1,228,953			$31,881,168			(190,391	)		($5,722,804	)


				matthewsasia.com \| 800.789.ASIA			117

Notes to Financial Statements (continued)


	Year Ended December 31, 2023						Year Ended December 31, 2022
	Shares			Amount			Shares			Amount
MATTHEWS JAPAN FUND

Investor Class

Shares sold		2,053,466			$33,532,012			1,890,537			$31,931,773

Shares issued through reinvestment of distributions		—			—			877,175			13,482,177

Shares redeemed		(2,411,922	)		(39,284,868	)		(5,698,655	)		(100,302,819	)
Net (decrease)		(358,456	)		($5,752,856	)		(2,930,943	)		($54,888,869	)
Institutional Class

Shares sold		9,113,265			$148,126,179			20,568,891			$361,445,980

Shares issued through reinvestment of distributions		—			—			1,915,282			29,495,342

Shares redeemed		(13,244,007	)		(213,636,143	)		(47,662,766	)		(784,368,302	)
Net (decrease)		(4,130,742	)		($65,509,964	)		(25,178,593	)		($393,426,980	)
MATTHEWS ASIAN GROWTH AND INCOME FUND

Investor Class

Shares sold		1,396,555			$17,652,386			2,072,697			$28,836,381

Shares issued through reinvestment of distributions		578,586			7,288,561			1,292,489			16,634,895

Shares redeemed		(9,682,174	)		(123,004,211	)		(9,901,120	)		(135,266,079	)
Net (decrease)		(7,707,033	)		($98,063,264	)		(6,535,934	)		($89,794,803	)
Institutional Class

Shares sold		3,200,353			$41,505,777			9,508,243			$131,777,583

Shares issued through reinvestment of distributions		329,356			4,177,281			1,200,111			15,469,643

Shares redeemed		(18,830,714	)		(234,492,223	)		(23,448,483	)		(305,383,902	)
Net (decrease)		(15,301,005	)		($188,809,165	)		(12,740,129	)		($158,136,676	)
MATTHEWS ASIA DIVIDEND FUND

Investor Class

Shares sold		1,959,768			$26,746,118			7,514,453			$115,243,327

Shares issued through reinvestment of distributions		411,838			5,421,653			505,887			7,582,603

Shares redeemed		(18,593,714	)		(249,195,190	)		(46,253,275	)		(662,868,059	)
Net (decrease)		(16,222,108	)		($217,027,419	)		(38,232,935	)		($540,042,129	)
Institutional Class

Shares sold		8,552,111			$116,613,098			39,426,296			$582,376,055

Shares issued through reinvestment of distributions		812,192			10,685,012			1,155,172			17,289,211

Shares redeemed		(56,199,056	)		(757,417,514	)		(112,802,946	)		(1,587,005,266	)
Net (decrease)		(46,834,753	)		($630,119,404	)		(72,221,478	)		($987,340,000	)
MATTHEWS CHINA DIVIDEND FUND

Investor Class

Shares sold		1,208,680			$17,048,437			2,997,704			$43,780,103

Shares issued through reinvestment of distributions		313,080			3,747,677			563,832			8,208,582

Shares redeemed		(4,169,134	)		(51,639,118	)		(6,111,791	)		(84,105,056	)
Net (decrease)		(2,647,374	)		($30,843,004	)		(2,550,255	)		($32,116,371	)
Institutional Class

Shares sold		1,693,605			$23,175,473			2,658,451			$38,472,050

Shares issued through reinvestment of distributions		183,645			2,193,203			320,617			4,657,289

Shares redeemed		(3,953,406	)		(50,423,051	)		(4,375,736	)		(62,829,410	)
Net (decrease)		(2,076,156	)		($25,054,375	)		(1,396,668	)		($19,700,071	)

4.	INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Matthews, a registered investment advisor under the 1940 Act, provides the Funds with investment management services. Pursuant to the prior Investment Advisory Agreement dated August 13, 2004, as amended (the “Prior Advisory Agreement”) and the current Investment Advisory Agreement dated February 1, 2016, as amended (the “Current Advisory Agreement,” and together with the Prior Advisory Agreement, the “Advisory Agreement”), the Funds pay Matthews (i) for management and advisory services; and (ii) for certain administrative services, an annual fee as a percentage of average daily net assets. Under the Advisory Agreement each of the Funds, other than Matthews Emerging Markets Small Companies Fund and Matthews China Small Companies Fund (the “Family-Priced Funds”), pays Matthews 0.75% of their aggregate average daily net assets up to $2 billion, 0.6834% of their aggregate average daily net assets over $2 billion up to $5 billion, 0.65% of their aggregate average daily net assets over $5 billion up to $25 billion, 0.64% of their aggregate average daily net assets over $25 billion up to $30 billion, 0.63% of their aggregate average daily net assets over $30 billion up to $35 billion, 0.62% of their aggregate average daily net assets over $35 billion up to $40 billion, 0.61% of their aggregate average daily net assets over $40 billion up to $45 billion, and 0.60% of their aggregate average daily net assets over $45 billion. Each of the Matthews Emerging Markets Small Companies Fund and the Matthews China Small Companies Fund pays Matthews an annual fee of 1.00% of the average daily net assets of such Fund up to $1 billion and 0.95% of the average daily net assets of such Fund over $1 billion pursuant to the Advisory Agreement. Each Fund pays Matthews a monthly fee at the annual rate using the applicable management fee calculated based on the actual number of days of that month and based on the Fund’s average daily net asset value for the month.


118		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

Pursuant to a fee waiver letter agreement, effective as of September 1, 2014, between the Trust, on behalf of the Family-Priced Funds, and Matthews (as amended from time to time, the “Fee Waiver Agreement”), for each Family-Priced Fund, Matthews has agreed to waive a portion of the fee payable under the Advisory Agreement and a portion of the fee payable under the Administration and Shareholder Services Agreement, if any Family-Priced Fund’s average daily net assets are over $3 billion, as follows: for every $2.5 billion average daily net assets of a Family-Priced Fund that are over $3 billion, the fee rates that otherwise would be applied for calculating fees payable under the Advisory Agreement and the Administration and Shareholder Services Agreement for such Family-Priced Fund with respect to such excess average daily net assets will be each reduced by 0.01%, in each case without reducing such fee rate below 0.00%.

Investment advisory fees charged, waived fees and reimbursed additional expenses for the year ended December 31, 2023, were as follows:


	Gross Advisory Fees		Advisory Fees Waived and Expenses Waived or Reimbursed in Excess of the Expense Limitation			Net Advisory Fee/ (Net Reimbursement)
Matthews Emerging Markets Equity Fund		$165,051		($143,956	)		$21,095
Matthews Emerging Markets Sustainable Future Fund		1,554,456		—			1,554,456
Matthews Emerging Markets Small Companies Fund		5,015,523		(960,093	)		4,055,430
Matthews Asia Growth Fund		3,650,147		—			3,650,147
Matthews Pacific Tiger Fund		23,257,575		(54,495	)		23,203,080
Matthews Asia Innovators Fund		3,016,480		—			3,016,480
Matthews China Fund		4,626,467		—			4,626,467
Matthews China Small Companies Fund		1,312,855		(200,612	)		1,112,243
Matthews India Fund		4,408,096		—			4,408,096
Matthews Japan Fund		4,462,435		—			4,462,435
Matthews Asian Growth and Income Fund		3,540,355		—			3,540,355
Matthews Asia Dividend Fund		10,447,486		—			10,447,486
Matthews China Dividend Fund		1,298,160		—			1,298,160

Under a written agreement between the Funds and Matthews (the “Operating Expense Agreement”), Matthews agrees to waive fees and reimburse expenses to a Fund if its expense ratio exceeds a certain percentage level. For all Funds, except the Matthews Emerging Markets Equity Fund, the Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund, this level is 1.20% for the Institutional Class. For the Matthews Emerging Markets Equity Fund, this level is 0.90% for the Institutional Class. For the Matthews Emerging Markets Sustainable Future Fund and the Matthews Emerging Markets Small Companies Fund, this level is 1.15% for the Institutional Class. Matthews agrees to reduce the expense ratio for the Investor Class by waiving an equal amount of non-class specific expenses (e.g., custody fees) as the Institutional Class. Because certain expenses of the Investor Class may be higher than those of the Institutional Class and because class specific expenses may be waived solely for the Institutional Class, total annual Fund expenses for the Investor Class may exceed 1.20% (or 0.90% for the Matthews Emerging Markets Equity Fund, or 1.15% for the Matthews Emerging Markets Sustainable Future Fund and Matthews Emerging Markets Small Companies Fund). In turn, if the expenses of a Fund, fall below the level noted within three years after Matthews has made such a reimbursement, the Fund may reimburse Matthews up to an amount of the recoupment available not 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 continue through April 30, 2025, may be extended for additional periods not exceeding one year, and may be terminated at any time by the Board of Trustees on behalf of the Fund on 60 days’ written notice to Matthews. Matthews may decline to renew this agreement by written notice to the Trust at least 30 days before its annual expiration date.

Waived Fees Subject to Possible Future Recoupment:

On December 31, 2023, the amounts expired and subject to possible future recoupment under the expense limitation agreement are as follows:


	Expired December 31,		Expiring December 31,
	2023		2024		2025		2026
Matthews Emerging Markets Equity Fund		$231,409		$248,206		$263,291		$143,956
Matthews Emerging Markets Small Companies Fund		378,868		638,812		647,978		960,093
Matthews China Small Companies Fund		362,019		309,590		388,736		200,612

The Funds have an Administration and Shareholder Services Agreement dated August 13, 2004, as amended (the “Shareholder Services Agreement” or “Services Agreement”), in which the Funds pay an annual administration and shareholder servicing fee to Matthews, as a percentage of the average daily net assets of each Fund in aggregate, computed and prorated on a daily basis. Under the Shareholder Services Agreement, the Funds in the aggregate pay Matthews 0.25% of their aggregate average daily net assets up to $2 billion, 0.1834% of their aggregate average daily net assets over $2 billion up to $5 billion, 0.15% of their aggregate average daily net assets over $5 billion up to $7.5 billion, 0.125% of their aggregate average daily net assets over $7.5 billion up to $15 billion, 0.11% of their aggregate average daily net assets over $15 billion up to $22.5 billion, 0.10% of their aggregate average daily net assets over $22.5 billion up to $25 billion, 0.09% of their aggregate average daily net assets over $25 billion up to $30 billion, 0.08% of their aggregate average daily net assets over $30 billion up to $35 billion, 0.07% of their aggregate average daily net assets over $35 billion up to $40 billion, 0.06% of their aggregate average daily net assets over $40 billion up to $45 billion, and 0.05% of their aggregate average daily net assets over $45 billion.


				matthewsasia.com \| 800.789.ASIA			119

Notes to Financial Statements (continued)

Administration and shareholder servicing fees charged, for the year ended December 31, 2023, were as follows:


	Gross Administration and Shareholder Servicing Fees		Administration and Shareholder Servicing Fees Waived in Excess of Expense Limitation			Net Administration and Shareholder Servicing Fees
Matthews Emerging Markets Equity Fund		$42,566		$—			$42,566
Matthews Emerging Markets Sustainable Future Fund		402,204		—			402,204
Matthews Emerging Markets Small Companies Fund		893,272		—			893,272
Matthews Asia Growth Fund		938,233		—			938,233
Matthews Pacific Tiger Fund		5,980,014		(54,495	)		5,925,519
Matthews Asia Innovators Fund		776,190		—			776,190
Matthews China Fund		1,190,414		—			1,190,414
Matthews China Small Companies Fund		230,701		—			230,701
Matthews India Fund		1,143,239		—			1,143,239
Matthews Japan Fund		1,153,909		—			1,153,909
Matthews Asian Growth and Income Fund		910,316		—			910,316
Matthews Asia Dividend Fund		2,688,362		—			2,688,362
Matthews China Dividend Fund		333,530		—			333,530

In addition to the fees paid to the Funds’ transfer agent, the Funds bear the cost of fees paid to certain service providers or intermediaries, including supermarkets, which provide transfer agency, record-keeping and shareholder servicing to certain shareholders. These fees are referred to as intermediary service fees on the Statements of Assets and Liabilities as well as the Statements of Operations. Additional information concerning these services and fees is contained in the Funds’ prospectuses.

BNY Mellon Investment Servicing (US) Inc. (“BNY Mellon”), an indirect wholly owned subsidiary of The Bank of New York Mellon Corporation, serves as the Funds’ administrator, and in that capacity, performs various administrative and accounting services for each Fund. BNY Mellon also serves as the Funds’ transfer agent, dividend disbursing agent and registrar. An officer of BNY Mellon serves as Assistant Treasurer to the Funds. Total fees accrued by the Funds for administration and accounting services for the year ended December 31, 2023 were as follows:


	Administration and Accounting fees
Matthews Emerging Markets Equity Fund		$1,930
Matthews Emerging Markets Sustainable Future Fund		18,164
Matthews Emerging Markets Small Companies Fund		40,124
Matthews Asia Growth Fund		42,719
Matthews Pacific Tiger Fund		272,178
Matthews Asia Innovators Fund		35,294
Matthews China Fund		54,133
Matthews China Small Companies Fund		10,503
Matthews India Fund		51,478
Matthews Japan Fund		52,151
Matthews Asian Growth and Income Fund		41,432
Matthews Asia Dividend Fund		122,240
Matthews China Dividend Fund		15,195

As of December 31, 2023, Matthews and its affiliates held significant shares in the Funds as follows:


	Shares held by Matthews and its Affiliates		Percentage of Outstanding Shares
Matthews Emerging Markets Equity Fund		479,071		27%

Certain officers and Trustees of the Funds are also officers and directors of Matthews. All officers serve without compensation from the Funds. The Funds paid the Independent Trustees $1,106,311 in aggregate for regular compensation during the year ended December 31, 2023.


120		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

5.	INVESTMENTS

The value of investment transactions made for unaffiliated holdings for the year ended December 31, 2023 were as follows:


	Unaffiliated Purchases		Proceeds from Unaffiliated Sales
Matthews Emerging Markets Equity Fund		$6,317,004		$20,715,205
Matthews Emerging Markets Sustainable Future Fund		137,716,277		110,048,711
Matthews Emerging Markets Small Companies Fund		289,005,130		134,253,394
Matthews Asia Growth Fund		401,554,174		673,468,929
Matthews Pacific Tiger Fund		483,704,686		1,973,198,989
Matthews Asia Innovators Fund		1,067,409,242		1,211,594,046
Matthews China Fund		329,035,315		458,187,836
Matthews China Small Companies Fund		75,873,588		116,548,293
Matthews India Fund		368,163,165		327,288,317
Matthews Japan Fund		638,823,500		712,087,573
Matthews Asian Growth and Income Fund		60,224,769		338,934,795
Matthews Asia Dividend Fund		1,127,815,559		1,951,373,901
Matthews China Dividend Fund		50,085,572		105,805,664

6.	INCOME TAX INFORMATION

It is the policy of the Funds to comply with all requirements of the Internal Revenue Code of 1986, as amended (“the Code”), applicable to regulated investment companies and to distribute substantially all of their taxable income to their shareholders. The Funds have met the requirements of the Code applicable to regulated investment companies for the year ended December 31, 2023. Therefore, no federal income tax provision is required.

Management has analyzed the Funds’ tax positions taken on federal income tax returns for all open tax years (current and prior three tax years), and has concluded that no provision for federal income tax is required in the Funds’ financial statements. The Funds’ federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

As of December 31, 2023, the components of accumulated earnings/deficit on tax basis were as follows:


	Undistributed Ordinary Income		Undistributed Long-Term Capital Gains		Capital Loss Carryforwards
Matthews Emerging Markets Equity Fund		$15,753		$—		($5,511,740	)
Matthews Emerging Markets Sustainable Future Fund		922,729		—		—
Matthews Emerging Markets Small Companies Fund		3,231,448		3,645,052		(81,857,957	)
Matthews Asia Growth Fund		5,653,848		—		(191,108,276	)
Matthews Pacific Tiger Fund		26,865,309		—		(136,707,674	)
Matthews Asia Innovators Fund		—		—		(365,022,903	)
Matthews China Fund		6,669,306		—		(249,092,745	)
Matthews China Small Companies Fund		92,136		—		(141,217,659	)
Matthews India Fund		266,756		25,731,850		—
Matthews Japan Fund		13,706,435		—		(182,262,551	)
Matthews Asian Growth and Income Fund		7,565,556		—		(24,542,384	)
Matthews Asia Dividend Fund		5,063,857		—		(325,014,516	)
Matthews China Dividend Fund		2,371,419		—		(48,409,941	)


	Late Year Losses*			Other Temporary Differences		Unrealized Appreciation (Depreciation)**			Total Accumulated Earnings/(Deficit)
Matthews Emerging Markets Equity Fund		($250,173	)		$—		($2,299,095	)		($8,045,255	)
Matthews Emerging Markets Sustainable Future Fund		(6,958,191	)		—		($3,280,826	)		(9,316,288	)
Matthews Emerging Markets Small Companies Fund		—			—		33,795,595			(41,185,862	)
Matthews Asia Growth Fund		(24,948,821	)		—		40,328,582			(170,074,667	)
Matthews Pacific Tiger Fund		(22,185,276	)		—		140,432,149			8,404,508
Matthews Asia Innovators Fund		(39,910,603	)		—		17,744,143			(387,189,363	)
Matthews China Fund		(19,976,535	)		—		(245,506,865	)		(507,906,839	)
Matthews China Small Companies Fund		—			—		(18,526,224	)		(159,651,747	)
Matthews India Fund		—			—		128,076,999			154,075,605
Matthews Japan Fund		—			—		79,541,106			(89,015,010	)
Matthews Asian Growth and Income Fund		(6,675,723	)		—		(11,501,192	)		(35,153,743	)
Matthews Asia Dividend Fund		—			—		(42,210,429	)		(362,161,088	)
Matthews China Dividend Fund		(5,763,461	)		—		(34,849,114	)		(86,651,097	)

*	The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next fiscal year.

**	The differences between book-basis and tax-basis unrealized appreciation/depreciation is attributable primarily to the tax deferral of losses on wash sales and passive foreign investment company (PFIC) mark to market adjustments.


				matthewsasia.com \| 800.789.ASIA			121

Notes to Financial Statements (continued)

As of December 31, 2023, the Funds have capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:


	Amount With No Expiration
	Short-term Losses		Long-term Losses		Total
Matthews Emerging Markets Equity Fund		$3,760,174		$1,751,566		$5,511,740
Matthews Emerging Markets Small Companies Fund		—		81,857,957		81,857,957
Matthews Asia Growth Fund		147,700,945		43,407,331		191,108,276
Matthews Pacific Tiger Fund		36,136,924		100,570,750		136,707,674
Matthews Asia Innovators Fund		182,431,142		182,591,761		365,022,903
Matthews China Fund		113,008,257		136,084,488		249,092,745
Matthews China Small Companies Fund		53,830,257		87,387,402		141,217,659
Matthews Japan Fund		163,326,006		18,936,545		182,262,551
Matthews Asian Growth and Income Fund		12,592,875		11,949,509		24,542,384
Matthews Asia Dividend Fund		325,014,516		—		325,014,516
Matthews China Dividend Fund		25,846,673		22,563,268		48,409,941

The following Funds utilized capital loss carryforwards in the current year:


	Utilized Capital Loss Carryforwards
Matthews Emerging Markets Small Companies Fund		$1,760,397
Matthews Asian Growth and Income Fund		26,016,180
Matthews Asia Dividend Fund		26,441,381

U.S. GAAP requires that certain components of net assets be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or NAV. The permanent differences are primarily attributable to investments in PFICs, non-deductible expenses, foreign currency reclassification, NOL (net operating loss) adjustments, capital gains tax, distributions in excess of current earnings and profits, re-characterization of distributions, investment in swaps, adjustments on distributions related to taxable spinoffs and the utilization of accumulated earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction for income tax purposes. For the year ended December 31, 2023, permanent differences in book and tax accounting have been reclassified to paid-in capital, undistributed net investment income (loss) and accumulated realized gain (loss) as follows:


	Increase/(Decrease) Capital Paid-in		Increase/(Decrease) Total Distributable Earnings/(Accumulated Loss)
Matthews Emerging Markets Sustainable Future Fund		$1,998,728		$(1,998,728	)
Matthews Emerging Markets Small Companies Fund		3,389,690		(3,389,690	)
Matthews Pacific Tiger Fund		—		—
Matthews India Fund		317,809		(317,809	)


122		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

As of December 31, 2023, the tax cost of investments and the related net unrealized appreciation and depreciation were as follows:


	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation (Depreciation)
Matthews Emerging Markets Equity Fund		$22,845,785		$2,698,503		($4,984,581	)		($2,286,078	)
Matthews Emerging Markets Sustainable Future Fund		214,628,926		35,098,720		(36,745,838	)		(1,647,118	)
Matthews Emerging Markets Small Companies Fund		576,132,838		130,263,217		(90,583,176	)		39,680,041
Matthews Asia Growth Fund		328,359,002		55,038,611		(14,117,577	)		40,921,034
Matthews Pacific Tiger Fund		1,800,986,791		458,862,369		(298,164,053	)		160,698,316
Matthews Asia Innovators Fund		290,210,932		33,726,838		(14,570,937	)		19,155,901
Matthews China Fund		704,103,987		38,907,609		(284,413,985	)		(245,506,376	)
Matthews China Small Companies Fund		107,919,123		6,152,222		(24,681,743	)		(18,529,521	)
Matthews India Fund		632,184,953		173,573,026		(17,567,644	)		156,005,382
Matthews Japan Fund		558,804,238		88,696,587		(9,167,593	)		79,528,994
Matthews Asian Growth and Income Fund		328,261,005		58,812,063		(69,846,758	)		(11,034,695	)
Matthews Asia Dividend Fund		1,114,622,242		99,108,450		(138,498,904	)		(39,390,454	)
Matthews China Dividend Fund		152,327,670		6,354,536		(41,202,177	)		(34,847,641	)

7.	SUBSEQUENT EVENTS

Effective January 1, 2024, pursuant to an amendment to the Investment Advisory Agreement, the advisory fee for each of the Matthews Emerging Markets Small Companies Fund and the Matthews China Small Companies Fund was reduced from 1.00% of average daily net assets (as described in Note 4) to 0.85% of average daily net assets.


				matthewsasia.com \| 800.789.ASIA			123

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Matthews International Funds and Shareholders of Matthews Emerging Markets Equity Fund, Matthews Asian Growth and Income Fund, Matthews Asia Dividend Fund, Matthews China Dividend Fund, Matthews Asia Growth Fund, Matthews Pacific Tiger Fund, Matthews Emerging Markets Sustainable Future Fund, Matthews Asia Innovators Fund, Matthews China Fund, Matthews India Fund, Matthews Japan Fund, Matthews Emerging Markets Small Companies Fund, and Matthews China Small Companies Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Matthews Emerging Markets Equity Fund, Matthews Asian Growth and Income Fund, Matthews Asia Dividend Fund, Matthews China Dividend Fund, Matthews Asia Growth Fund, Matthews Pacific Tiger Fund, Matthews Emerging Markets Sustainable Future Fund, Matthews Asia Innovators Fund, Matthews China Fund, Matthews India Fund, Matthews Japan Fund, Matthews Emerging Markets Small Companies Fund, and Matthews China Small Companies Fund (thirteen of the funds constituting Matthews International Funds, hereafter collectively referred to as the “Funds”) as of December 31, 2023, the related statements of operations for the year ended December 31, 2023, the statements of changes in net assets for each of the two years in the period ended December 31, 2023, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2023, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended December 31, 2023 and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of December 31, 2023 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

PricewaterhouseCoopers LLP

San Francisco, CA

February 23, 2024

We have served as the auditor of one or more investment companies in Matthews International Funds since 2007.


124		MATTHEWS ASIA FUNDS

Tax Information (unaudited)

For shareholders who do not have a December 31, 2023 tax year-end, this notice is for informational purposes. For the period January 1, 2023 to December 31, 2023, the Funds report the following items with regard to distributions paid during the period. All reports are based on financial information available as of the date of this annual report and, accordingly, are subject to change. For each item, it is the intention of each Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

1. Qualified Dividend Income

The Funds report a portion of the ordinary income distributed during the year ended December 31, 2023 as Qualified Dividend Income (“QDI”) as defined in the Internal Revenue code as follows:


	QDI Portion
Matthews Emerging Markets Equity Fund		100.00%
Matthews Emerging Markets Sustainable Future Fund		13.60%
Matthews Emerging Markets Small Companies Fund		18.24%
Matthews Asia Growth Fund		100.00%
Matthews Pacific Tiger Fund		53.36%
Matthews Asia Innovators Fund		100.00%
Matthews China Fund		100.00%
Matthews China Small Companies Fund		100.00%
Matthews India Fund		38.45%
Matthews Japan Fund		0.00%
Matthews Asian Growth and Income Fund		50.59%
Matthews Asia Dividend Fund		100.00%
Matthews China Dividend Fund		81.92%

2. Dividends Received Deduction

The Funds report a Dividend Received Deduction pursuant to Section 854 of the Internal Revenue Code for the year ended December 31, 2023 as follows:


Matthews Emerging Markets Equity Fund			2.29%
Matthews Emerging Markets Sustainable Future Fund			1.05%
Matthews Emerging Markets Small Companies Fund			0.00%
Matthews Asia Growth Fund			0.00%
Matthews Pacific Tiger Fund			1.53%
Matthews Asia Innovators Fund			9.81%
Matthews China Fund			0.05%
Matthews China Small Companies Fund			0.00%
Matthews India Fund			0.11%
Matthews Japan Fund			0.00%
Matthews Asian Growth and Income Fund			2.58%
Matthews Asia Dividend Fund			0.87%
Matthews China Dividend Fund			0.64%


				matthewsasia.com \| 800.789.ASIA			125

Tax Information (unaudited) (continued)

3. Long-Term Capital Gain Distributions

The Funds report Long-Term Capital Gain distributions pursuant to Section 852(b)(3) of the Internal Revenue Code for the year ended December 31, 2023 as follows:


	Long-Term Capital Gains
Matthews Emerging Markets Equity Fund		$—
Matthews Emerging Markets Sustainable Future Fund		8,301,673
Matthews Emerging Markets Small Companies Fund		39,323,118
Matthews Asia Growth Fund		—
Matthews Pacific Tiger Fund		—
Matthews Asia Innovators Fund		—
Matthews China Fund		—
Matthews China Small Companies Fund		—
Matthews India Fund		8,461,800
Matthews Japan Fund		—
Matthews Asian Growth and Income Fund		—
Matthews Asia Dividend Fund		—
Matthews China Dividend Fund		—

4. Foreign Taxes Paid

The Funds have elected to pass through to their shareholders the foreign taxes paid for year ended December 31, 2023 as follows:


	Foreign Source Income		Foreign Taxes Paid/(Credit)
Matthews Emerging Markets Equity Fund		$688,182		$47,266
Matthews Emerging Markets Sustainable Future Fund		2,700,661		322,124
Matthews Emerging Markets Small Companies Fund		7,549,687		904,610
Matthews Asia Growth Fund		9,656,312		827,522
Matthews Pacific Tiger Fund		68,504,088		6,809,112
Matthews Asia Innovators Fund		6,997,594		581,034
Matthews China Fund		14,956,785		966,763
Matthews China Small Companies Fund		2,019,426		61,609
Matthews India Fund		11,362,888		1,905,708
Matthews Japan Fund		—		—
Matthews Asian Growth and Income Fund		17,728,867		1,242,200
Matthews Asia Dividend Fund		45,585,598		3,651,506
Matthews China Dividend Fund		7,461,041		350,344

5. Qualified Interest Income

The Funds report a portion of the net income dividends distributed during the year ended December 31, 2023, as Qualified Interest Income (QII), as defined in the Internal Revenue Code as follows:


	QII Portion
Matthews Emerging Markets Equity Fund		1.07%
Matthews Emerging Markets Sustainable Future Fund		0.56%
Matthews Emerging Markets Small Companies Fund		1.11%
Matthews Asia Growth Fund		0.44%
Matthews Pacific Tiger Fund		1.01%
Matthews Asia Innovators Fund		3.85%
Matthews China Fund		0.30%
Matthews China Small Companies Fund		0.21%
Matthews India Fund		4.18%
Matthews Japan Fund		0.00%
Matthews Asian Growth and Income Fund		1.56%
Matthews Asia Dividend Fund		1.77%
Matthews China Dividend Fund		1.63%


126		MATTHEWS ASIA FUNDS

Tax Information (unaudited) (continued)

6. Qualified Short-Term Capital Gain Dividends

The Funds designate a portion of the short term capital gain dividends distributed during the year ended December 31, 2023, as Qualified Short Term Gain, as defined in the Internal Revenue Code as follows:


	Short-Term Gains
Matthews Emerging Markets Equity Fund		0.00%
Matthews Emerging Markets Sustainable Future Fund		100.00%
Matthews Emerging Markets Small Companies Fund		0.00%
Matthews Asia Growth Fund		0.00%
Matthews Pacific Tiger Fund		0.00%
Matthews Asia Innovators Fund		0.00%
Matthews China Fund		0.00%
Matthews China Small Companies Fund		0.00%
Matthews India Fund		0.00%
Matthews Japan Fund		0.00%
Matthews Asian Growth and Income Fund		0.00%
Matthews Asia Dividend Fund		0.00%
Matthews China Dividend Fund		0.00%


				matthewsasia.com \| 800.789.ASIA			127

Approval of Advisory Agreement (unaudited)

The Funds, which are series of the Trust, have retained Matthews International Capital Management, LLC (“Matthews”) to manage their assets pursuant to an Investment Advisory Agreement dated as of February 1, 2016, as amended (the “Advisory Agreement”), which has been approved by the Board of Trustees of the Trust, including all of the Trustees who are not “interested persons” (“Independent Trustees”), within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”), as well as by the shareholders of each Fund in accordance with the requirements of the 1940 Act. Following an initial two-year term with respect to each Fund, the Advisory Agreement continues in effect from year-to-year provided that the continuance is specifically approved at least annually by the vote of the holders of at least a majority of the outstanding shares of the Funds, or by the Board of Trustees, and, in either event, by a majority of the Independent Trustees of the Trust casting votes in person at a meeting called for that purpose (the “Annual 15(c) Process”).

At a meeting held on August 23-24, 2023 (the “Meeting”), the Board, including all of the Independent Trustees, approved the continuation of the Advisory Agreement for an additional one-year term beginning February 1, 2024 with respect to each Fund.

At the Meeting and at a prior meeting of the Independent Trustees on August 18, 2023, the Board received and considered information (both written and oral) provided to assist it in the review of the Advisory Agreement and made assessments with respect to each Fund individually. The Independent Trustees were advised by independent legal counsel with respect to these matters. Prior to the August 18, 2023 meeting, a working group of Independent Trustees and independent legal counsel had met with representatives of Matthews on August 2, 2023 to review relevant information in connection with the Annual 15(c) Process. After the August 2, 2023 and August 18, 2023 meetings, the Independent Trustees asked Matthews to provide certain additional information and to respond to certain additional questions at the Meeting. The Independent Trustees then reviewed this supplemental information, which was provided prior to and at the Meeting. The Independent Trustees discussed the renewal of the Advisory Agreement with representatives of Matthews and among themselves in private sessions on various occasions at which no representatives of Matthews were present.

In addition, the Board received presentations about the Funds throughout the year from management. Among the information considered by the Board were responses to a detailed information request sent on behalf of the Independent Trustees by their independent legal counsel. Matthews furnished extensive information in response to this request with respect to many subjects relating to the Advisory Agreement and other related agreements and addressed many of the factors discussed below, including, but not limited to, information about the services provided by Matthews, its structure, organization, operations and personnel, the

financial condition of Matthews and the profitability to Matthews from the Advisory Agreement, compliance procedures and resources, investment performance of the Funds, expenses of the Funds, brokerage and portfolio transactions, distribution and marketing of the Funds, shareholder services and relationships with intermediaries, and other information considered relevant.

In considering information relating to management fee levels, which the Board considers to be the advisory and administrative fees both separately and on a combined basis, the Board considered, among other things, information provided by Matthews as to Fund management services and fees as compared to advisory services and fees charged by Matthews to its institutional clients and pooled vehicles organized outside of the United States. The Trustees also considered information provided by an independent data provider, Broadridge, comparing the investment performance and the fee and expense levels of each Fund to appropriate peer groups of mutual funds, as well as performance data provided by Matthews with respect to unmanaged benchmarks and pooled vehicles or other accounts managed by Matthews with similar investment objectives and/or strategies to the Funds, as applicable.

The Independent Trustees also considered that they had engaged an independent data provider, Broadridge, to assist them in their Annual 15(c) Process. The Independent Trustees considered the work and analysis performed by the independent data provider in selecting appropriate peer groups for the Funds. Furthermore, throughout the course of the year, the Board received a wide variety of materials relating to the services provided by Matthews, including reports on each Fund’s investment results, portfolio composition, portfolio trading practices, shareholder services, and other information relating to the nature, extent, and quality of services provided by Matthews to the Funds. The Board also considered that, under the Administration and Shareholder Services Agreement, Matthews provides additional services to the Funds that are essential to the operation of the Funds and that, although Matthews is separately compensated under that agreement, these additional services are provided in connection with Matthews’ advisory relationship with the Funds.

In addition to the information furnished by Matthews, the Trustees were provided with a legal memorandum from their independent legal counsel discussing their fiduciary duties related to their approval of the continuation of the Advisory Agreement and discussed these matters with their counsel. The Board’s consideration of all this information, both at the Meeting and throughout the year, is part of a systematic process that it has used, and continues to use with regard to the Annual 15(c) Process.


128		MATTHEWS ASIA FUNDS

Approval of Advisory Agreement (unaudited) (continued)

identify any single factor or particular piece of information that, in isolation, was controlling. Each Independent Trustee may also have weighed factors differently. This summary describes the most important, but not all, of the factors considered by the Board and the Independent Trustees.

1.	The nature, extent and quality of the services provided by Matthews under the Advisory Agreement.

The Trustees considered the overall financial strength and long-term stability of Matthews and its ability to continue to provide a high level and high quality of services to the Funds. The Trustees considered that despite recent challenging conditions with respect to revenues and profitability of the organization, which have been caused by contracting revenues and assets under management, a difficult geopolitical environment and market volatility, Matthews has continued to provide high quality services to the Funds. They noted that past periods of volatile and challenging securities markets had not resulted in a diminution of services and that Matthews has always demonstrated a commitment to employ the resources necessary to maintain the high level of quality and services to the Funds. The Trustees positively viewed Matthews’ emphasis on preserving and enhancing portfolio management team resources, and careful business planning and management.

The Trustees considered the experience and qualifications of the executive and portfolio management personnel at Matthews who are responsible for providing services to the Funds and who are responsible for the daily management of the Funds’ portfolios. The Trustees noted that Matthews had experienced some turnover at the senior executive and professional staff levels in recent years. In this regard, the Trustees reviewed with Matthews the efforts undertaken to replace staff where appropriate and to otherwise minimize its impact on the Funds, including enhancements to the portfolio management teams of certain Funds. They also reviewed Matthews’ retention strategies and recent personnel developments relevant to certain of the Funds. They discussed efforts by Matthews to provide appropriate support to the Funds, including, but not limited to, appropriate back-up support for each Fund such as, but not limited to, enhancing the structure of the portfolio management teams to better recognize Matthews’ bench of talent, and ensuring succession plans are put in place. Among the improved capabilities noted by the Independent Trustees over the past several years are enhanced risk analytical resources and related professionals, including the ongoing enhancements to compliance, risk management, technology, business infrastructure, operations, marketing and client service, as well as enhancements to financial intermediary oversight and valuation practices.

As in past years, the Trustees considered the technical capabilities of Matthews, including the design and implementation of its disaster recovery and business continuity infrastructure. The Trustees also considered the Chief Compliance Officer’s report regarding Matthews’ compliance resources, risk assessment and other compliance initiatives and programs. The Trustees concluded that Matthews has

implemented a robust and diligent compliance process, and demonstrates a strong commitment to a culture of compliance. The Independent Trustees took into consideration Matthews’ description of its supervision of the activities of the Funds’ various service providers, as well as supporting the Independent Trustees’ responsibilities and requests and its responsiveness to questions and/or concerns raised by the Trustees throughout the year.

The Trustees noted the significant role played by Matthews, as valuation designee, with respect to the valuation of portfolio securities, including research and analysis related to fair valued securities and due diligence and oversight of pricing vendors.

The Trustees concluded that Matthews had the quality of personnel and other investment resources essential to performing its duties under the Advisory Agreement, and that the nature, overall quality, cost and extent of such management services are satisfactory.

2.	The investment performance of the Funds.

The Trustees reviewed the short-term and long-term performance of each Fund on both an absolute basis and in comparison to appropriate peer funds, benchmark indices and to the extent they exist, Matthews’ similarly managed accounts, all for various periods ending June 30, 2023. The Trustees considered investment results in light of each Fund’s objective, strategies and market conditions, noting periods during which there were challenging investment conditions in various Asian and emerging markets. The Independent Trustees reviewed information as to peer group selections presented by Broadridge. In doing so, the Trustees recognized and took into account that the specialized nature of the Funds made it sometimes difficult to fairly benchmark performance against peers and also took into account that certain funds had a very limited universe of peers. The Board also considered that many of the Funds had investment objectives, goals and strategies that were very different from non-managed broad-based benchmarks, which rendered performance comparisons against such broad-based benchmarks of lesser utility. In this regard, the Board took into account that the Funds are not designed to perform like broad-based indices and therefore that most investors in the Funds likely are not seeking to achieve benchmark-like returns.

The Trustees reviewed each Fund’s performance on a case-by-case basis and noted that some Funds had outperformed their Performance Universe over certain periods and/or exceeded the return of their respective benchmark while others underperformed their Performance Universe over certain periods and/or trailed the return of their respective benchmark. In considering each Fund’s investment results, the Board placed greater emphasis on each Fund’s long-term performance track record rather than shorter-term performance. The Board also took into account that each Fund’s track record was measured as of a specific ending date, and that track records can vary as of different measurement dates. Therefore, in reviewing a Fund that is currently underperforming, the Trustees also considered the broader per-


				matthewsasia.com \| 800.789.ASIA			129

Approval of Advisory Agreement (unaudited) (continued)

spective of the Fund’s performance over varying time periods, the market conditions experienced during the periods under review, as well as the outlook for the Fund going forward in light of expected future market conditions.

The Trustees discussed with Matthews the fact that certain periods of underperformance may be transitory while other periods of underperformance may be caused by factors that warrant further consideration. To the extent of any concerns about performance with respect to any particular period for a Fund, the Trustees noted that Matthews had provided an explanation for that performance, explained its reasons for maintaining a consistent investment philosophy and discussed action taken to improve performance. For example, the Trustees recognized actions taken by Matthews from time to time in response to performance concerns, such as changes to members of a portfolio management team or changes in the investment process and strategies of certain Funds. A summary of each Fund’s performance track record is provided below.

For Matthews Pacific Tiger Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund’s performance ranked in the fifth quintile for the one-year period, the second quintile for the three-year period and the fifth quintile for the five-year period. The Trustees also noted that the Fund underperformed the median of its peer group for the one-year, five-year, ten-year and since-inception periods and outperformed that median for the three-year period. The Trustees took into account, however, that because the peer universe for the Fund was small over the longer time periods, with only a few comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger. The Board considered Matthews’ discussion regarding the factors contributing to the periods of underperformance and took into account changes implemented in the portfolio by Matthews to address that underperformance.

For Matthews Asian Growth and Income Fund, the Trustees noted that the Fund has experienced improved performance due, in part, to changes implemented in the portfolio. The Trustees also noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund ranked in the first quintile for the one-year and three-year periods and the third quintile for the five-year period. The Trustees also noted that the Fund outperformed the median of its peer group for the one-, three- and five-year periods and underperformed that median for the ten-year and since-inception periods. The Trustees took into account, however, that because the peer universe for the Fund was small over the longer time periods, with only a few comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger.

For Matthews China Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the since-inception period, but that perform-

ance had ranked in the fourth quintile for the one-year period, third quintile for the three-year and ten-year periods and second quintile for the five-year period. The Trustees also noted that the Fund outperformed the median of its peer funds for the five-year period but underperformed that median for each of the other periods reviewed. The Trustees took into account, however, that because the peer universe for the Fund was small over the since-inception period, with only two comparable funds, relative peer performance was of less use for that period than if the peer universe were larger.

For Matthews Japan Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund’s performance had ranked in the third quintile for the one-year, three-year and five-year periods. The Trustees also noted that the Fund performed at or near the median of its peer funds over the one-year, three-year, and five-year periods and outperformed that median over the ten-year and since inception periods. The Trustees took into account, however, that because the peer universe for the Fund was small over the ten-year and since-inception periods, with only a few comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger.

For Matthews Asia Innovators Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund’s performance ranked in the fifth quintile for the one-year period, the fourth quintile for the three-year period and the second quintile for the five-year period. The Trustees also noted that the Fund underperformed the median of its peer funds over the one-year and three-year periods and outperformed that median over the five-year, ten-year and since-inception periods. The Trustees took into account, however, that because the peer universe for the Fund was small over the ten-year and since-inception periods, with only a few comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger. The Trustees took into consideration Matthews’ discussions regarding the factors that had contributed to the Fund’s shorter-term underperformance and efforts undertaken to improve performance.

For Matthews Asia Growth Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for any period. The Trustees further noted that the Fund underperformed the median of its peer group for the one-year, three-year, five-year, ten-year and since-inception periods. The Trustees took into account, however, that because the peer universe for the Fund was small, with only two comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger. The Trustees further took into account the narrower dispersion of underperformance against the medians. The Trustees also took into consideration Matthews’ discussions regarding the factors that had contributed to the Fund’s underperformance as well as efforts undertaken to improve performance.


130		MATTHEWS ASIA FUNDS

Approval of Advisory Agreement (unaudited) (continued)

For Matthews India Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund ranked in the first quintile for the one-year and three-year periods and fifth quintile for the five-year period. The Trustees further noted that the Fund outperformed the median of its peer group for the one-year, three-year, ten-year and since-inception periods and underperformed that median for the five-year period. The Trustees took into account, however, that because the peer universe for the Fund was small over the ten-year and since-inception periods, with only a few comparable funds, relative peer performance was of less use for those periods than if the peer universe were larger. The Trustees also took into consideration the Fund’s improved performance over the shorter-term periods.

For Matthews Asia Dividend Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for any period. The Trustees further noted that the Fund underperformed the median of its peer group for the one-year, three-year and five-year periods, outperformed the median for the ten-year period and performed at the median for the since-inception period. The Trustees took into account, however, that the peer universe for the Fund was small, with only a few comparable funds, and that therefore relative peer performance was of less use than if the peer universe were larger.

For Matthews Emerging Markets Small Companies Fund, the Trustees noted that the Fund ranked in the second quintile of its peer group for the one-year period and the first quintile for the three-year, five-year, ten-year and since-inception periods. The Trustees further noted that the Fund had outperformed the median of its peer group for each of those periods..

For Matthews China Dividend Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for the ten-year and since-inception periods, but that the Fund ranked in the first quintile of its peer group over the one-year, three-year and five-year periods. The Trustees also noted that the Fund had outperformed its peer group median for the one-year, three-year, five-year and ten-year periods and underperformed that median for the since-inception period. The Trustees took into account, however, that the peer universe for the Fund was small over the ten-year and since-inception periods, with only a few comparable funds, and that therefore relative peer performance was of less use than if the peer universe were larger.

For Matthews China Small Companies Fund, the Trustees noted that there were not enough funds in the peer universe to assign quintile performance for any time period; however, the Trustees noted that the Fund’s performance was at the median of its peer group for the one-year, five-year and since-inception periods, below that median for the three-year period and above the median for the ten-year period. The Trustees took into account, however, the very small size of the peer group, with only one or two comparable funds depending on the period, and that therefore relative peer performance was less useful than if the peer universe were larger.

For Matthews Emerging Markets Sustainable Future Fund, the Trustees noted that the Fund ranked in the third quintile for the one-year period and the first quintile for the three-year, five-year and since-inception periods. The Trustees further noted that the Fund had outperformed its peer group median for each of those periods. The Trustees noted that not all of the peer group funds had a similar ESG strategy as the Fund. The Trustees also considered that the Fund’s name and principal investment strategy had changed effective July 29, 2022.

For Matthews Emerging Markets Equity Fund, the Trustees noted that the Fund’s performance ranked in the first quintile for the one-year and since-inception periods and the second quintile for the three-year period. The Trustees also noted that the Fund had outperformed the peer group median for each of those periods.

After review, the Trustees concluded that each Fund’s overall performance was satisfactory or was being addressed as needed. The Trustees also reviewed Matthews’ trading policies and efforts to obtain best overall execution for the Funds in the various markets in which the Funds trade securities. The Trustees noted the relatively low turnover rates in many of the equity Funds and Matthews’ consistent adherence to its long-standing investment approach, which emphasizes fundamental bottom-up driven investment selection in light of its view of regional economic conditions.

3.	The extent to which Matthews realizes economies of scale as the Funds grow larger and whether Fund investors benefit from any economies of scale.

The Trustees first noted the substantial work done over the years between the Board and Matthews to establish fee structures for both the Advisory Agreement and other agreements that recognize the sharing of economies of scale that can arise as assets in the Funds grow through the use of breakpoints. In particular, they noted that the management fee structure contains breakpoints for the group-priced Funds as well as for certain individually priced Funds. That structure enhances the ability of the Funds and their shareholders to benefit from past and potential future economies of scale. They discussed the structure and level of these breakpoints and concluded that they continue to be appropriate given the sizes of the Funds. The Trustees further noted that as the Funds’ assets have decreased in recent periods, there were no additional economies to share at present, however, should the Funds grow additional economies of scale will continue to be shared with shareholders of the Funds through fee waivers and/or expense reimbursements pursuant to the Operating Expenses Agreement, fee waivers pursuant to the Fee Waiver Agreement, and the breakpoints in the fees payable under the Services Agreement. As another example of economies of scale, the Trustees noted that Matthews was successful in negotiating lower fees with the Funds’ custodian, first in 2014 and again in 2020, resulting in additional savings to the Funds.

The Trustees next discussed Matthews’ ongoing investment in its technology, systems, staffing and other aspects of its business that can benefit the Funds, noting that all these


				matthewsasia.com \| 800.789.ASIA			131

Approval of Advisory Agreement (unaudited) (continued)

endeavors are a means by which Matthews is sharing economies of scale with the Funds and their shareholders through reinvestment in products and services that are designed to benefit the Funds and their shareholders. The Trustees considered the new personnel hired over recent years, as well as planned hiring, and the extent to which that hiring could be expected to benefit shareholders. The Trustees also recognize that the Funds’ total assets have fluctuated, especially in certain strategies. Those fluctuations affect any economies of scale that could be enjoyed. As a result, the Trustees remain satisfied about the extent to which economies of scale have been and will continue to be shared with the Funds and their shareholders.

4.	The costs of the services provided by Matthews and others.

The Trustees considered the management fees and total fees and expenses of each Fund in comparison to the management and advisory fees and other fees and expenses of other funds in each Fund’s relevant peer group. The Trustees reviewed information developed by Broadridge as to appropriate peer groups for each Fund for these purposes. The Board placed greater emphasis on management fees, which include both advisory and administrative fees, as the basis of comparison rather than advisory fees alone.

The Trustees considered both the gross management fee rates charged by Matthews, as well as the effective management fee rates after taking into consideration the fees waived and expenses reimbursed pursuant to the Operating Expenses Agreement and the Fee Waiver Agreement. The Trustees considered that the contractual advisory rates (excluding administrative services) for the Funds were generally very competitive and often lower than those of the relevant peer group averages. The Trustees also considered that the total expense ratios paid by shareholders of the Funds, which are most representative of a shareholder’s net investment results, were also competitive. The Trustees noted that Matthews’ continued efforts in recent years had resulted in, for many of the Funds, reduced expenses over time. The Trustees also noted that, as an example of those efforts, in 2019 the Advisor had agreed to lower the level of the expense cap for the Institutional Class of each Fund by 5 basis points to 1.20%, thereby effectively lowering the expenses for the Investor Class of those Funds by the same amount. The Trustees also noted that all Funds, except for the Emerging Markets Equity Fund, Emerging Markets Small Companies Fund and China Small Companies Fund, are running below their existing caps, but that they have downside protection in the event that their assets decrease. The Trustees further noted that the Advisor had further lowered the expense cap for the Institutional Class of the Matthews Emerging Markets Small Companies Fund by an additional 5 basis points to 1.15% effective April 30, 2021 and had lowered the expense cap for the Institutional Class of the Matthews Emerging Markets Sustainable Future Fund to 1.15% effective July 29, 2022.

The Trustees also compared Matthews’ advisory fees with those of Matthews’ separate accounts and other investment products, noting that the Funds’ advisory expenses were not

disadvantageous (not being substantially higher than the separate accounts’ rates). The Trustees agreed that advisory fees for the Funds appeared to be appropriate in comparison and taking into account the differences in services between these products and the Funds, including the differences in the frequency of net asset value calculations and other operational and compliance activities.

The Trustees’ overall assessment with respect to each Fund was that, taking into account the considerations noted below, the contractual advisory fee rates, the total expense ratio, and the effective or net advisory fee rates were fair and reasonable.

For the Matthews Pacific Tiger Fund, the actual management fee was above the peer group median and the contractual management fee was at the peer group median. The actual total expenses (excluding 12b-1 fees) were at the peer group median.

For the Matthews Asian Growth and Income Fund and the Matthews Asia Growth Fund, the actual management fee was above the peer group median and the contractual management fee was below the peer group median. The actual total expenses (excluding 12b-1 fees) were above the peer group median.

For the Matthews China Fund, Matthews China Dividend Fund and Matthews Emerging Markets Equity Fund, the actual management fee was above the peer group median and the contractual management fee was below the peer group median. The actual total expenses (excluding 12b-1 fees) were below the peer group median.

For the Matthews India Fund, the actual management fee was below the peer group median and the contractual management fee was below the peer group median. The actual total expenses (excluding 12b-1 fees) were below the peer group median.

For the Matthews Asia Innovators Fund, the actual management fee was above the peer group median and the contractual management fee was below the peer group median. The actual total expenses (excluding 12b-1 fees) were at the peer group median.

For the Matthews Emerging Markets Sustainable Future Fund, the actual management fee was above the peer group median and the contractual management fee was below the peer group median. The actual total expenses (excluding 12b-1 fees) were slightly above the peer group median.

For the Matthews Japan Fund, the actual management fee was above the peer group median and the contractual management fee was above the peer group median. The actual total expenses (excluding 12b-1 fees) were above the peer group median. The Trustees noted the very small size of the peer group, with only a few comparable funds, and that therefore relative fees and expenses were less useful than if the peer universe were larger.

For the Matthews Asia Dividend Fund, the actual management fee was above the peer group median and the contractual management fee was above the peer group median. The actual total expenses (excluding 12b-1 fees) were above the peer group median.


132		MATTHEWS ASIA FUNDS

Approval of Advisory Agreement (unaudited) (continued)

For the Matthews Emerging Markets Small Companies Fund and Matthews China Small Companies Fund, the actual management fee was above the peer group median and the contractual management fee was above the peer group median. The actual total expenses (excluding 12b-1 fees) were above the peer group median. The Trustees considered that these Funds each had breakpoints in its management fee schedule and noted that in 2019 the Advisor had recommended, and the Trustees agreed, to remove redemption fees from the Matthews Emerging Markets Small Companies Fund and Matthews China Small Companies Fund in order to promote asset growth and realize economies of scale.

5.	The profits to be realized by Matthews and its affiliates from the relationships with the Funds.

The Trustees reviewed information provided by Matthews regarding the costs of sponsoring and operating the Funds and information regarding the profitability to Matthews of the Advisory Agreement both on a fund-by-fund basis and overall for the family of Funds. In considering profitability, the Trustees discussed and considered the methodology employed by Matthews in calculating profit margins but also considered other elements relevant to discussions of profitability, such as the entrepreneurial risk undertaken by Matthews in sponsoring and maintaining the Funds and risks associated with commitments to maintain Fund expense ratios. The Trustees also reviewed information provided regarding the structure and manner in which Matthews’ investment professionals were compensated and their respective views of the relationship of such compensation to the attraction and retention of quality personnel. The Trustees considered Matthews’ willingness to invest in technology, infrastructure and professional staff to reinforce and offer services and to accommodate changing regulatory requirements and industry practices.

The Trustees noted that Matthews has experienced reduced profitability this past year as assets under management have fallen but still appeared to be sufficiently profitable to operate as a viable investment management firm, able to honor its obligations as a sponsor of the Funds, including the Funds that did not generate a profit for Matthews, without earning excessive profits from any particular Fund or from the overall relationship with the Funds. The Trustees noted that, with fluctuations in asset levels in recent years, heightened volatility in revenues and profitability could be expected from

time to time in the future, but they also noted the increased cost control measures by Matthews with certain continued expenditures on personnel and other resources where appropriate. The Board also considered information relating to the profitability of a limited number of publicly traded investment advisers, although the Board noted that this information was of limited utility because it was comprised of a limited universe of advisers, did not provide any information as to how profitability was determined and did not limit profitability analysis to the performance of advisory services to registered investment companies. The Board further noted that these advisers differed significantly from Matthews because they were not solely dedicated to investment in the Asian and emerging markets.

Based on information received, the Trustees noted that Matthews’ overall profitability from the Advisory Agreement appeared not to be excessive at the current time, whether considered inclusive or exclusive of distribution costs.

6.	Ancillary benefits.

The Trustees requested and received from Matthews information concerning other benefits received by Matthews as a result of its respective relationship with the Funds, including various service arrangements with Matthews. These potential benefits included, among other things, the use of soft dollars as well as potential benefits resulting from the structure of compensation arrangements between the Trust, the Adviser and financial intermediaries in the areas of shareholder servicing and sub-transfer agency services. The Board concluded that such benefits were consistent with those generally derived by investment advisers to mutual funds or were otherwise not unusual.

7.	Conclusions.

Based on their review, including their consideration of each of the factors referred to above, and assisted by the advice of independent counsel to the Independent Trustees, the Board, including the Independent Trustees, concluded that the Advisory Agreement was fair and reasonable with respect to each Fund and its shareholders, and that the renewal of the Advisory Agreement would be in the best interests of each Fund and its shareholders. The Board did not indicate that any single factor was determinative of its decision to approve the Advisory Agreement, but indicated that the Board based its determination on the total mix of information available to it.


				matthewsasia.com \| 800.789.ASIA			133

Statement Regarding Liquidity Risk Management Program

The Securities and Exchange Commission adopted Rule 22e-4 under the Investment Company Act of 1940, as amended (the “Liquidity Rule”) to promote effective liquidity risk management throughout the open-end investment company industry. Each Fund has adopted and implemented a liquidity risk management program (the “Program”) in accordance with the Liquidity Rule. The Program seeks to assess and manage each Fund’s liquidity risk (i.e., the risk that the Fund could not meet requests to redeem shares issued by the Fund without significant dilution of remaining investors’ interests in the Fund). The Program relies on a third-party vendor to assist with the liquidity classifications of the Funds’ portfolio holdings.

The Board of Trustees (the “Board”) of the Matthews International Funds, (the “Funds”) met on November 15, 2023 (the “Meeting”) to review the Program, in accordance with the requirements of the Liquidity Rule. The Board has appointed the Liquidity Risk Management Committee (“LRMC”), a sub-committee of the Enterprise Risk Management Committee of Matthews International Capital Management, LLC, as Program Administrator.

At the Meeting, the LRMC provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including, if applicable, the operation of the Highly Liquid Investment Minimum (“HLIM”), and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2022 through October 31, 2023 (the “Program Reporting Period”).

The Report included a portfolio liquidity profile of each Fund as of October 31, 2023. The Report also discussed, among other thing, the factors and assumptions considered in establishing a Fund’s HLIM and Reasonably Anticipated Trading Size; the results of stress tests designed to assess liquidity under hypothetical stressed scenarios; and the impact of local holidays in non-US jurisdictions.

The Report concluded that based on the operation of the functions, as described in the Report, the Program is reasonably designed to assess and manage liquidity risk and was adequately and effectively implemented during the Program Reporting Period.


134		MATTHEWS ASIA FUNDS

Trustees and Officers of the Funds (unaudited)

The operations of each Fund are under the direction of the Board of Trustees. The Board of Trustees establishes each Fund’s policies and oversees and reviews the management of each Fund. The Board meets regularly to review the activities of the officers, who are responsible for the day-to-day operations of the Funds. The Statement of Additional Information, which includes additional information about Fund Trustees, is available without charge by calling 800.789.2742 or by visiting the Funds’ website, matthewsasia.com. The Trustees and executive officers of the Funds, their year of birth, business address, principal occupations during the past five years and other trusteeships/directorships are set forth below:


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INDEPENDENT TRUSTEES

GALE K. CARUSO Born 1957 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Chair of the Board of Trustees and Trustee	Trustee since 2015, Vice Chair (2021), and Chair of the Board since 2022	Formerly President and Chief Executive Officer (1999–2003), Zurich Kemper Life (life insurance and annuities); Chairman, President and Chief Executive Officer (1994–1999), Scudder Canada Investor Services, Ltd. (investment management); Managing Director (1986–1999), Scudder Kemper Investments, Inc. (investment management).	23	Trustee (since 2006), Pacific Select Funds (47 Portfolios); Member, Board of Governors (since 2022), Investment Company Institute; Member, Governing Council (since 2016), Independent Directors Council; Director (2005–2012), Make-A-Wish of Maine.

NEAL ANDREWS* Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2024	Managing Director, BlackRock Inc. (2006–2020), Chief Financial Officer BlackRock Funds (2007–2020) and BlackRock iShares (2019); Senior Vice President and Line of Business Head, Accounting and Administration, PFPC Inc. (1992–2006); Senior Auditor, Price Waterhouse LLP (1987–1992).	23	Segall Bryant & Hamill Funds Trust (2023), (16 Portfolios)

CHRISTOPHER LEE Born 1967 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2015	Consultant and Associate Professor (since 2017), Hong Kong University of Science and Technology; Lecturer (part-time) (2013–2019), The Chinese University of Hong Kong; Private Investor and Partner (since 2012), FAA Investments (financial holding company); Managing Director, Asia Region, and Head of Global Markets Investment Products & db-X (2010–2012), Deutsche Bank AG (financial services); Managing Director, Equity Risk Management Products, and Head of Intermediary Business (2002–2010), UBS AG (financial services); Vice President, Global Markets & Investment Bank (2000–2002), Vice President, International Private Clients Group (1997–2000), Associate, Debt and Equity Markets Group (1995–1997), Merrill Lynch & Co., Inc. (brokerage and investment management).	23	Director (since 2017), Hong Kong Securities and Investment Institute; Director (2013–2018), Asian Master Funds (Australia) (1 Portfolio); Trustee (2013–2022), African Wildlife Foundation; Trustee (2010–2016), Oakland Museum of California.

RICHARD K. LYONS Born 1961 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2010	Chief Innovation and Entrepreneurship Officer (since 2020), UC Berkeley; Dean (2008–2018), Haas School of Business, UC Berkeley; Chief Learning Officer (2006–2008), Goldman Sachs (investment banking and investment management).	23	Trustee (since 2018), Syntax ETF Trust; Trustee (2001–2006), Barclays Global Investor Funds and Master Investment Portfolios (15 Portfolios); Trustee (2000–2006), iShares, Inc. (24 Portfolios) and iShares Trust (over 70 Portfolios); Trustee (1994–2006) and Chairman of the Board (2000–2006), Matthews Asia Funds (9 Portfolios).

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.

*	Effective January 1, 2024.


				matthewsasia.com \| 800.789.ASIA			135


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INDEPENDENT TRUSTEES

RHODA ROSSMAN Born 1958 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2006	Council Member (since 2019), California Catastrophe Response Council; Vice President, Corporate Investment Officer (2007–2010), Senior Vice President and Treasurer (2003–2007), The PMI Group, Inc. (mortgage insurer).	23

JONATHAN F. ZESCHIN Born 1953 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Trustee since 2007 and Chair of the Board (2014–2021)	Partner (since 2009), Essential Investment Partners, LLC (investment advisory and wealth management).	23	Trustee (2019), Russell Investment Funds (9 portfolios) and Russell Investment Company (32 portfolios).

Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INTERESTED TRUSTEES²

JAMES COOPER ABBOTT Born 1969 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee and President	Trustee and President since 2022	Director and Chief Executive Officer (since 2022), Matthews (investment management); Chairman and Chief Executive Officer/President (2009–2022), Carillon Tower Advisers, Inc. and Affiliates (asset management); Chief Executive Officer/President (2009–2022), Eagle Asset Management, Inc. (asset management); President (2003–021), Carillon Family of Funds (mutual fund company); President (2008–2019) Eagle Boston Investment Management, Inc. (asset management); Managing Member (2010–2022) Alternative Strategy Partnerships (asset management).	23	Director (since 2023), Matthews Asia Funds SICAV (15 Portfolios); Trustee (2017–2021), Carillon Family of Funds (12 Portfolios).

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.

2	A trustee is considered an “interested person” of the Trust as defined under the 1940 Act because of an ownership interest in the Advisor or an office held with the Trust or the Advisor.


136		MATTHEWS ASIA FUNDS


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Other Trusteeships/ Directorships (number of portfolios) Held by Officer
OFFICERS WHO ARE NOT TRUSTEES

JOHN P. McGOWAN Born 1964 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President and Secretary	Since 2005	Head of Fund Administration (since 2009), Chief Administrative Officer (2007–2008), Chief Operating Officer (2004–2007), Matthews (investment management); Vice President and Secretary (2013–2017), Matthews A Share Selections Fund, LLC (registered investment company); Director (since 2010), Matthews Asia Funds SICAV (Luxembourg) (investments); Director (2010–2020), Matthews Global Investors S.à r.l. (Luxembourg) (investment management); Director (since 2004), Matthews Asian Selections Funds, PLC (Ireland) (investments).	Director, Matthews Asian Selections Funds Plc (1 Portfolio); Director, Matthews Asia Funds SICAV (Luxembourg) (15 Portfolios).

SHAI A. MALKA Born 1973 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Treasurer	Since 2005	Vice President of Fund Accounting and Operations (since 2010), Senior Manager of Fund Accounting and Operations (2004–2009), Matthews (investment management); Treasurer (2013–2017), Matthews A Share Selections Fund, LLC (registered investment company).	None

LISA NICOSIA Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Chief Compliance Officer and Anti-Money Laundering Officer	Since 2023	Chief Compliance Officer and Anti-Money Laundering Officer (since 2023), Matthews Asia Funds (registered investment company); Vice President (2014–2022), Goldman Sachs (investment management).	None

J. DAVID KAST Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2018	Chief Compliance Officer and Anti-Money Laundering Officer (since 2018), Global Head of Risk and Compliance (since 2017), Matthews (investment management); Managing Director (2009–2017), Goldman Sachs (investment management).	None

DEEPA DAMRE SMITH Born 1975 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2022	General Counsel (since 2022), Matthews (investment management); Managing Director (2014–2022), Director (2009–2013), BlackRock (investment management); Principal (2004–2009), Barclays Global Investors (investment management).	None

SEAN TAYLOR Born 1967 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2023	Portfolio Manager (since 2023), Matthews (investment management); Chief Investment Officer for APAC (2014-2023), Global Head of Emerging Markets (2014-2023), DWS Group (investment management); Head of Emerging Markets (2013-2023), Deutsche Asset and Wealth Management (investment management).	None

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.


				matthewsasia.com \| 800.789.ASIA			137

LOGO


Matthews Asia Funds

INVESTMENT ADVISOR Matthews International Capital Management, LLC Four Embarcadero Center, Suite 550 San Francisco, CA 94111 800.789.ASIA CUSTODIAN Brown Brothers Harriman & Co. 50 Post Office Square Boston, MA 02110	ACCOUNT SERVICES Matthews Asia Funds P.O. Box 534475 Pittsburgh, PA 15253-4475 800.789.ASIA LEGAL COUNSEL Paul Hastings LLP 101 California Street, 48th Floor San Francisco, CA 94111	ADMINISTRATOR & TRANSFER AGENT BNY Mellon 301 Bellevue Parkway Wilmington, DE 19809

LOGO

P.O. Box 534475 | Pittsburgh, PA 15253-4475 | matthewsasia.com | 800.789.ASIA (2742)

Matthews Asia Funds are distributed in the United States by Foreside Funds Distributors LLC, Portland, Maine

Matthews Asia Funds are distributed in Latin America by Picton S. A.

LOGO

AR-1223

Matthews Asia Active ETFs | Annual Report

December 31, 2023 | matthewsasia.com

Matthews Emerging Markets Equity Active ETF (MEM)

Matthews Emerging Markets ex China Active ETF (MEMX)

Matthews Emerging Markets Sustainable Future Active ETF (EMSF)

Matthews Asia Innovators Active ETF (MINV)

Matthews Pacific Tiger Active ETF (ASIA)

Matthews China Active ETF (MCH)

Matthews India Active ETF (INDE)

Matthews Japan Active ETF (JPAN)

Matthews Korea Active ETF (MKOR)

Matthews Asia Dividend Active ETF (ADVE)

LOGO

Listed on the NYSE Arca

LOGO

Matthews Asia Active Exchange-Traded Funds (ETFs) are actively managed and do not seek to replicate a specific index. ETFs are bought and sold through an exchange at the then current market price, not net asset value (NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV when traded on an exchange. Brokerage commissions will reduce returns. There can be no guarantee that an active market for ETFs will develop or be maintained, or that the ETF’s listing will continue or remain unchanged.

ETF market price returns since inception are calculated using NAV for the period until market price becomes available (generally a few days after inception).

Investments are not FDIC-insured, nor are they deposits of, or guaranteed by, a bank or any other entity, so they may lose value.

Statements of fact are from sources considered reliable, but neither the Funds nor the Investment Advisor makes any representation or guarantee as to their completeness or accuracy.


2		MATTHEWS ASIA FUNDS

Contents



Message to Shareholders from the President of Matthews Asia Funds			4

Message to Shareholders from the Investment Advisor			5

Fund Characteristics and Schedules of Investments:

Matthews Emerging Markets Equity Active ETF			7

Matthews Emerging Markets ex China Active ETF			11

Matthews Emerging Markets Sustainable Future Active ETF			15

Matthews Asia Innovators Active ETF			18

Matthews Pacific Tiger Active ETF			21

Matthews China Active ETF			23

Matthews India Active ETF			27

Matthews Japan Active ETF			30

Matthews Korea Active ETF			33

Matthews Asia Dividend Active ETF			37

Index Definitions			39

Disclosures			40

Disclosure of Fund Expenses			40

Statements of Assets and Liabilities			42

Statements of Operations			45

Statements of Changes in Net Assets			48

Financial Highlights			52

Notes to Financial Statements			62

1. Organization			62

2. Significant Accounting Policies			62

3. Capital Shares Transactions			65

4. Investment Management Fees			67

5. Investments			68

6. Income Tax Information			68

7. Other Matters			69

8. Subsequent Events			70

9. Report of Independent Registered Public Accounting Firm			71

10. Tax Information			72

11. Approval of Investment Management Agreement			74

12. Statement Regarding Liquidity Risk Management Program			86

13. Trustees and Officers of the Funds			87

Investment Risk: Exchange-Traded Fund shares are not deposits or obligations of, or guaranteed by, any depositary institution. Shares are not insured by the FDIC, Federal Reserve Board or any government agency and are subject to investment risks, including possible loss of principal amount invested. Investing in international and emerging markets may involve additional risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Fixed income investments are subject to additional risks, including, but not limited to, interest rate, credit and inflation risks. In addition, single-country and sector funds may be subject to a higher degree of market risk than diversified funds because of a concentration in a specific industry, sector or geographic location. Investing in small and mid-size companies is more risky than investing in large companies as they may be more volatile and less liquid than larger companies. Please see the Funds’ Prospectus and Statement of Additional Information for more risk disclosure.


				matthewsasia.com \| 833.228.5605			3

Message to Shareholders from the President of Your Funds

Dear Fellow Shareholder,

Thank you for your continued trust in Matthews as your active partner in a World of Emerging Opportunities.

Emerging Markets

Matthews’ Active ETFs and the Power of Choice

Based on our history of providing investors with unique access to Emerging Markets, Asia and China, we further enhanced our leadership in Active ETFs during the year. Building upon the first of their kind suite of active ETFs focused on these regions, Matthews added nine Active ETFs through January 2024. This suite of 12 active, research-based ETF vehicles incorporate experienced insights, sustainability considerations, and our deep research to offer a range of investment opportunity in a new way.

Evolution…and Looking Forward

Cooper Abbott, CFA

President of the Matthews Asia Funds

Chief Executive Officer, Matthews International Capital Management, LLC


4		MATTHEWS ASIA FUNDS

LOGO

Message to Shareholders from the Investment Advisor

Dear Valued Shareholder,

Less Scrooge, more Ebeneezer

Other countries that your portfolios can invest in were less overly restrictive in their policy-making in 2023, in my opinion, preferring to be more Ebeneezer and less Scrooge. This meant that some saw inflation rates rise—India, Brazil, Mexico among them—in the immediate post-COVID period and thus spent much of the last year with elevated interest rates. And yet their domestic demand was strong and many emerging markets economies performed surprisingly well given that backdrop. The transient nature of inflation—another way of saying that a good portion was created by temporary supply-chain issues—meant that stimulus could also be withdrawn without great damage to their economies. The overall resilience of emerging markets in this rate-rise cycle, I believe, was a mixture of good policy choices made in the past and some good fortune in that the nature of the inflation problem made it inherently easier to treat.

Turning to another key market, Brazil has done almost as much to add to volatility as it has to returns over the past five years. However, it is not without its attractions. Valuations are reasonable and the central bank has been ahead of the curve in terms of tightening in the recent inflationary environment. It is likely to benefit, therefore, from falling inflation and, if the promise of recession-less disinflation bears out, the cyclicality of many of its business will not be the headwind that many fear.


				matthewsasia.com \| 833.228.5605			5

Markets with opportunities

Robert Horrocks, PhD

Chief Investment Officer

Matthews International Capital Management, LLC


6		MATTHEWS ASIA FUNDS

LOGO


PORTFOLIO MANAGERS

Alex Zarechnak
Lead Manager

Sean Taylor		Andrew Mattock, CFA
Co-Manager		Co-Manager

Peeyush Mittal, CFA		Jeremy Sutch, CFA
Co-Manager		Co-Manager

FUND FACTS

Ticker		MEM
CUSIP		577125818
Inception Date		07/13/22
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$28.24
Market Price (as of 12/31/23)		$28.27
# of Positions		55
Net Assets		$55.9 million
Portfolio Turnover		54.86%
Weight Average Market Cap		$116.2 billion
Benchmark
MSCI Emerging Markets Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews Emerging Markets Equity Active ETF (unaudited)

FUND INSIGHTS

•

The top three contributors to absolute performance during the year included Prologis Property Mexico, a Mexican real estate company, Taiwan Semiconductor Manufacturing , a Taiwanese information technology company, and Samsung Electronics, a South Korean information technology company.

•

The largest detractors to performance during the year included JD.com, a Chinese consumer discretionary company, First Quantum Minerals, a Zambian materials company, and AIA Group, a Hong Kong financials company.

•

The top three contributors to relative performance, on a country basis, were Mexico, due to an overweight allocation, China/Hong Kong, because of an underweight allocation, and Vietnam, due to an off-benchmark allocation.

•

The top three detractors to relative performance, on a country basis, were India and South Korea due to stock selection, and Taiwan due to an underweight position.

•

The top three contributors to relative performance, on a sector basis, were real estate, consumer staples and financials due to stock selection.

•

The top three detractors to relative performance, on a sector basis, were consumer discretionary, energy and health care due to stock selection.



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		Since Inception		Inception date
Emerging Markets Equity Active ETF (NAV)¹		7.26%		7.51%		9.05%		07/13/22
Emerging Markets Equity Active ETF (market price)		7.54%		6.93%		9.12%
MSCI Emerging Markets Index²		7.93%		10.27%		6.83%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION

LOGO

The returns shown are based on net asset values calculated for shareholder transactions and may differ from the returns shown in the financial highlights, which reflect adjustments made to the net asset values in accordance with accounting principles generally accepted in the United States of America.


				matthewsasia.com \| 833.228.5605			7



TOP TEN HOLDINGS³
Name	Sector	Country	% Net Assets
Samsung Electronics Co., Ltd., Pfd.	Information Technology	South Korea		6.0%
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		5.4%
Prologis Property Mexico SA de CV REIT	Real Estate	Mexico		4.2%
Tencent Holdings, Ltd.	Communication Services	China		3.9%
HDFC Bank, Ltd. ADR	Financials	India		3.5%
Banco BTG Pactual SA	Financials	Brazil		2.7%
FPT Corp.	Information Technology	Vietnam		2.6%
ICICI Bank, Ltd. ADR	Financials	India		2.4%
Infosys, Ltd. ADR	Information Technology	India		2.4%
Woodside Energy Group, Ltd.	Energy	Australia		2.4%
% OF ASSETS IN TOP 10				35.6%

Holdings may combine more than one security from same issuer and related depositary receipts.



COUNTRY ALLOCATION (%)^4,5
India			16.6
China/Hong Kong			15.5
Brazil			11.0
Mexico			9.2
South Korea			7.4
Taiwan			6.7
United States			5.5
Vietnam			4.7
France			3.6
Philippines			2.6
Australia			2.4
Indonesia			2.2
United Kingdom			2.0
United Arab Emirates			2.0
Poland			2.0
Kazakhstan			1.5
Switzerland			1.4
Saudi Arabia			1.0
Cash and Other Assets, Less Liabilities			2.7



SECTOR ALLOCATION (%)⁵
Financials			24.2
Information Technology			22.0
Consumer Discretionary			14.8
Materials			10.2
Energy			5.8
Real Estate			5.3
Consumer Staples			4.4
Industrials			4.2
Communication Services			3.9
Health Care			2.4
Cash and Other Assets, Less Liabilities			2.7



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			58.1
Large Cap ($10B-$25B)			12.2
Mid Cap ($3B-10B)			20.6
Small Cap (under $3B)			6.4
Cash and Other Assets, Less Liabilities			2.7

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


8		Matthews Emerging Markets Equity Active ETF

Matthews Emerging Markets Equity Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 91.3%


	Shares		Value

INDIA: 16.6%
HDFC Bank, Ltd. ADR		29,004		$1,946,458

ICICI Bank, Ltd. ADR		57,408		1,368,607

Infosys, Ltd. ADR		73,964		1,359,458

UltraTech Cement, Ltd.		8,002		1,009,994

Indian Hotels Co., Ltd.		166,548		877,335

PI Industries, Ltd.		17,987		759,976

Restaurant Brands Asia, Ltd.^a		555,025		745,692

Varun Beverages, Ltd.		41,433		615,866

Kotak Mahindra Bank, Ltd.		25,326		580,728

Total India				9,264,114



CHINA/HONG KONG: 15.5%
Tencent Holdings, Ltd.		58,600		2,203,349

AIA Group, Ltd.		126,200		1,099,809

H World Group, Ltd. ADR		27,976		935,517

JD.com, Inc. Class A		63,450		914,142

Midea Group Co., Ltd. A Shares		115,800		891,988

Yum China Holdings, Inc.		17,958		761,958

BYD Co., Ltd. A Shares		26,400		734,095

Innovent Biologics, Inc.^a,b,c		83,500		457,143

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		9,600		391,787

PDD Holdings, Inc. ADR^a		1,854		271,259

Midea Group Co., Ltd. A Shares		2,600		19,947

Total China/Hong Kong				8,680,994



BRAZIL: 11.0%
Banco BTG Pactual SA		191,500		1,482,690

Armac Locacao Logistica E Servicos SA		246,300		864,504

Vale SA ADR		53,989		856,266

Vinci Partners Investments, Ltd. Class A		74,862		819,739

WEG SA		83,700		635,986

PRIO SA		65,600		621,887

Hapvida Participacoes e Investimentos SA^a,b,c		567,700		520,064

NU Holdings, Ltd. Class A^a		39,159		326,195

Total Brazil				6,127,331



MEXICO: 9.2%
Prologis Property Mexico SA de CV REIT		494,800		2,359,391

GCC SAB de CV		91,700		1,083,429

Grupo Financiero Banorte SAB de CV Class O		91,500		922,645

Becle SAB de CV		386,200		758,740

Total Mexico				5,124,205



TAIWAN: 6.7%
Taiwan Semiconductor Manufacturing Co., Ltd.		157,000		3,033,545

Taiwan Semiconductor Manufacturing Co., Ltd. ADR		7,031		731,224

Total Taiwan				3,764,769



UNITED STATES: 5.5%
Globant SA^a		5,232		1,245,111

Applied Materials, Inc.		7,072		1,146,159

Freeport-McMoRan, Inc.		15,534		661,283

Total United States				3,052,553


	Shares		Value

VIETNAM: 4.7%
FPT Corp.		362,505		$1,435,856

Military Commercial Joint Stock Bank		933,105		717,270

HDBank		589,818		493,500

Total Vietnam				2,646,626



FRANCE: 3.6%
TotalEnergies SE ADR		19,603		1,320,850

LVMH Moet Hennessy Louis Vuitton SE		851		689,626

Total France				2,010,476



PHILIPPINES: 2.6%
Ayala Corp.		66,720		820,520

Wilcon Depot, Inc.		1,711,200		645,853

Total Philippines				1,466,373



AUSTRALIA: 2.4%
Woodside Energy Group, Ltd.		62,602		1,326,774

Total Australia				1,326,774



INDONESIA: 2.2%
PT Bank Rakyat Indonesia Persero Tbk		3,302,200		1,227,843

Total Indonesia				1,227,843



UNITED KINGDOM: 2.0%
Prudential PLC		100,727		1,139,226

Total United Kingdom				1,139,226



UNITED ARAB EMIRATES: 2.0%
Emaar Properties PJSC		273,456		589,687

Fertiglobe PLC		660,263		533,927

Total United Arab Emirates				1,123,614



POLAND: 2.0%
Dino Polska SA^a,b,c		9,462		1,108,562

Total Poland				1,108,562



KAZAKHSTAN: 1.5%
Kaspi.KZ JSC GDR^c		9,011		829,012

Total Kazakhstan				829,012



SOUTH KOREA: 1.4%
LG Chem, Ltd.		2,059		797,765

Total South Korea				797,765



SWITZERLAND: 1.4%
Cie Financiere Richemont SA Class A		5,633		774,692

Total Switzerland				774,692



SAUDI ARABIA: 1.0%
Bupa Arabia for Cooperative Insurance Co.		9,841		559,494

Total Saudi Arabia				559,494



TOTAL COMMON EQUITIES				51,024,423

(Cost $48,557,535)


				matthewsasia.com \| 833.228.5605			9

Matthews Emerging Markets Equity Active ETF

December 31, 2023

Schedule of Investments (continued)

PREFERRED EQUITIES: 6.0%


	Shares		Value

SOUTH KOREA: 6.0%
Samsung Electronics Co., Ltd., Pfd.		69,481		$3,361,027

Total South Korea				3,361,027



TOTAL PREFERRED EQUITIES				3,361,027

(Cost $2,808,273)


SHORT-TERM INVESTMENTS: 2.0%

MONEY MARKET FUNDS: 2.0%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^d		1,107,780		1,107,780

(Cost $1,107,780)


TOTAL INVESTMENTS: 99.3%				55,493,230
(Cost $52,473,588)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.7%				413,783


NET ASSETS: 100.0%				$55,907,013

a	Non-income producing security.

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

JSC	Joint Stock Co.

Pfd.

Preferred

PJSC	Public Joint Stock Co.

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


10		Matthews Emerging Markets Equity Active ETF

LOGO


PORTFOLIO MANAGERS

Alex Zarechnak
Lead Manager

Sean Taylor		Peeyush Mittal, CFA
Co-Manager		Co-Manager

Jeremy Sutch, CFA
Co-Manager

FUND FACTS

Ticker		MEMX
CUSIP		577125792
Inception Date		01/10/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$27.60
Market Price (as of 12/31/23)		$27.74
# of Positions		47
Net Assets		$8.8 million
Portfolio Turnover		28.64%
Weight Average Market Cap		$114.4 billion
Benchmark
MSCI Emerging Markets ex China Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews Emerging Markets ex China Active ETF

(unaudited)

FUND INSIGHTS

•

The Matthews Emerging Markets ex China Active ETF launched on January 10, 2023.

•

The top three contributors to absolute performance during the period included Taiwan Semiconductor Manufacturing, a Taiwanese information technology company, Prologis Property Mexico, a Mexican real estate company, and Banco BTG Pactual, a Brazilian financials company.

•

The largest detractors to performance during the year included First Quantum Minerals, a Zambian Materials company, Prudential, a United Kingdom financials company, and Wilcon Depot, a Philippines consumer discretionary company.

•

The top three contributors to relative performance, on a country basis, were Vietnam, because of an off-benchmark allocation, Mexico, due to an overweight position, and South Africa, due to a zero allocation.

•

The top three detractors to relative performance, on a country basis were India due to stock selection, and the United Kingdom and Singapore, due to off-benchmark allocations.

•

The top three contributors to relative performance, on a sector basis, were real estate and financials due to stock selection and communication services because of an underweight allocation.

•

The top three detractors to relative performance, on a sector basis, were energy, consumer discretionary and industrials due to stock selection.



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 Months		Since Inception		Inception date
Emerging Markets ex China Active ETF (NAV)¹		9.88%		11.68%		01/10/23
Emerging Markets ex China Active ETF (market price)		10.25%		12.23%
MSCI Emerging Markets ex China Index²		13.12%		15.73%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION

LOGO


				matthewsasia.com \| 833.228.5605			11



TOP TEN HOLDINGS³
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. ADR	Information Technology	Taiwan		9.6%
Samsung Electronics Co., Ltd., Pfd.	Information Technology	South Korea		6.5%
Prologis Property Mexico SA de CV REIT	Real Estate	Mexico		4.3%
HDFC Bank, Ltd. ADR	Financials	India		3.9%
Infosys, Ltd. ADR	Information Technology	India		3.0%
Banco BTG Pactual SA	Financials	Brazil		3.0%
Woodside Energy Group, Ltd.	Energy	Australia		2.7%
TotalEnergies SE ADR	Energy	France		2.7%
FPT Corp.	Information Technology	Vietnam		2.6%
ICICI Bank, Ltd. ADR	Financials	India		2.6%
% OF ASSETS IN TOP 10				40.8%

Holdings may combine more than one security from same issuer and related depositary receipts.



COUNTRY ALLOCATION (%)^4,5
India			19.8
Brazil			12.9
Mexico			9.8
South Korea			9.6
Taiwan			9.6
United States			5.9
Vietnam			4.4
France			4.0
Philippines			3.2
Australia			2.7
United Arab Emirates			2.6
Indonesia			2.3
Poland			2.3
United Kingdom			2.3
Kazakhstan			1.6
Switzerland			1.5
Chile			1.2
Saudi Arabia			1.2
Turkey			1.0
Cash and Other Assets, Less Liabilities			2.2



SECTOR ALLOCATION (%)⁵
Information Technology			26.4
Financials			24.5
Materials			12.7
Consumer Discretionary			9.3
Consumer Staples			6.8
Energy			6.5
Real Estate			5.7
Industrials			4.6
Health Care			1.1
Cash and Other Assets, Less Liabilities			2.2



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			55.4
Large Cap ($10B-$25B)			13.2
Mid Cap ($3B-10B)			22.1
Small Cap (under $3B)			7.1
Cash and Other Assets, Less Liabilities			2.2

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


12		Matthews Emerging Markets ex China Active ETF

Matthews Emerging Markets ex China Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 91.3%


	Shares		Value

INDIA: 19.8%
HDFC Bank, Ltd. ADR		5,139		$344,878

Infosys, Ltd. ADR		14,611		268,550

ICICI Bank, Ltd. ADR		9,551		227,696

UltraTech Cement, Ltd.		1,504		189,831

Indian Hotels Co., Ltd.		29,957		157,806

Restaurant Brands Asia, Ltd.^a		100,225		134,655

PI Industries, Ltd.		3,124		131,994

Kotak Mahindra Bank, Ltd.		4,882		111,945

Varun Beverages, Ltd.		6,594		98,014

Hindustan Unilever, Ltd.		2,709		86,724

Total India				1,752,093



BRAZIL: 12.9%
Banco BTG Pactual SA		34,300		265,568

Vale SA ADR		10,272		162,914

Vinci Partners Investments, Ltd. Class A		13,537		148,230

Armac Locacao Logistica E Servicos SA		41,200		144,611

WEG SA		15,400		117,015

PRIO SA		10,800		102,384

Hapvida Participacoes e Investimentos SA^a,b,c		106,800		97,838

NU Holdings, Ltd. Class A^a		11,718		97,611

Total Brazil				1,136,171



MEXICO: 9.8%
Prologis Property Mexico SA de CV REIT		79,000		376,701

GCC SAB de CV		16,200		191,402

Grupo Financiero Banorte SAB de CV Class O		16,200		163,354

Becle SAB de CV		66,700		131,041

Total Mexico				862,498



TAIWAN: 9.6%
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		8,122		844,688

Total Taiwan				844,688



UNITED STATES: 5.9%
Globant SA^a		945		224,891

Applied Materials, Inc.		1,212		196,429

Freeport-McMoRan, Inc.		2,416		102,849

Total United States				524,169



VIETNAM: 4.4%
FPT Corp.		57,620		228,229

Military Commercial Joint Stock Bank		121,080		93,073

HDBank		76,600		64,091

Total Vietnam				385,393



FRANCE: 4.0%
TotalEnergies SE ADR		3,504		236,099

LVMH Moet Hennessy Louis Vuitton SE		145		117,504

Total France				353,603



PHILIPPINES: 3.2%
Ayala Corp.		11,980		147,330


	Shares		Value

Wilcon Depot, Inc.		355,600		$134,213

Total Philippines				281,543



SOUTH KOREA: 3.1%
Kia Corp.		1,885		146,362

LG Chem, Ltd.		339		131,347

Total South Korea				277,709



AUSTRALIA: 2.7%
Woodside Energy Group, Ltd.		11,244		238,303

Total Australia				238,303



UNITED ARAB EMIRATES: 2.6%
Emaar Properties PJSC		60,090		129,579

Fertiglobe PLC		125,041		101,116

Total United Arab Emirates				230,695



INDONESIA: 2.3%
PT Bank Rakyat Indonesia Persero Tbk		546,200		203,091

Total Indonesia				203,091



POLAND: 2.3%
Dino Polska SA^a,b,c		1,701		199,288

Total Poland				199,288



UNITED KINGDOM: 2.2%
Prudential PLC		17,594		198,989

Total United Kingdom				198,989



KAZAKHSTAN: 1.6%
Kaspi.KZ JSC GDR^c		1,525		140,300

Total Kazakhstan				140,300



SWITZERLAND: 1.5%
Cie Financiere Richemont SA Class A		978		134,502

Total Switzerland				134,502



CHILE: 1.2%
Antofagasta PLC		5,130		109,835

Total Chile				109,835



SAUDI ARABIA: 1.2%
Bupa Arabia for Cooperative Insurance Co.		1,806		102,677

Total Saudi Arabia				102,677



TURKEY: 1.0%
BIM Birlesik Magazalar AS		8,579		87,361

Total Turkey				87,361



TOTAL COMMON EQUITIES				8,062,908

(Cost $7,299,198)


				matthewsasia.com \| 833.228.5605			13

Matthews Emerging Markets ex China Active ETF

December 31, 2023

Schedule of Investments (continued)

PREFERRED EQUITIES: 6.5%


	Shares		Value

SOUTH KOREA: 6.5%
Samsung Electronics Co., Ltd., Pfd.		11,842		$572,837

Total South Korea				572,837



TOTAL PREFERRED EQUITIES				572,837

(Cost $515,185)


SHORT-TERM INVESTMENTS: 2.0%

MONEY MARKET FUNDS: 2.0%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^d		177,061		177,061

(Cost $177,061)


TOTAL INVESTMENTS: 99.8%				8,812,806
(Cost $7,991,444)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.2%				18,483


NET ASSETS: 100.0%				$8,831,289

a	Non-income producing security.

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

JSC	Joint Stock Co.

Pfd.

Preferred

PJSC	Public Joint Stock Co.

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


14		Matthews Emerging Markets ex China Active ETF

LOGO


PORTFOLIO MANAGERS

Vivek Tanneeru
Lead Manager

Inbok Song
Co-Manager

FUND FACTS

Ticker		EMSF
CUSIP		577130628
Inception Date		09/21/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$25.74
Market Price (as of 12/31/23)		$25.79
# of Positions		56
Net Assets		$14.2 million
Portfolio Turnover		0.37%
Weight Average Market Cap		$19.0 billion
Benchmark
MSCI Emerging Markets Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

3	Holdings may combine more than one security from same issuer and related depositary receipts.

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Emerging Markets Sustainable Future Active ETF (unaudited)



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 months		Since Inception		Inception date
Emerging Markets Sustainable Future Active ETF (NAV)¹		2.17%		2.98%		09/21/23
Emerging Markets Sustainable Future Active ETF (market price)		2.20%		3.18%
MSCI Emerging Markets Index²		7.93%		7.61%



TOP TEN HOLDINGS³
Name	Sector	Country	% Net Assets
Shriram Finance, Ltd.	Financials	India		6.8%
Bandhan Bank, Ltd.	Financials	India		6.4%
JD Health International, Inc.	Consumer Staples	China		5.4%
Full Truck Alliance Co., Ltd. ADR	Industrials	China		5.1%
Meituan Class B	Consumer Discretionary	China		4.4%
Legend Biotech Corp. ADR	Health Care	China		4.0%
Samsung SDI Co., Ltd.	Information Technology	South Korea		3.8%
Hong Kong Exchanges & Clearing, Ltd.	Financials	Hong Kong		3.7%
YDUQS Participacoes SA	Consumer Discretionary	Brazil		3.7%
Micron Technology, Inc.	Information Technology	United States		3.6%
% OF ASSETS IN TOP 10				47.0%



COUNTRY ALLOCATION (%)^4,5
China/Hong Kong			41.1
India			20.2
Taiwan			9.5
South Korea			7.9
Brazil			7.7
United States			3.6
Poland			3.2
Saudi Arabia			2.6
Romania			1.3
Jordan			1.1
Chile			0.7
Estonia			0.7
Vietnam			0.1
Bangladesh			0.1
Cash and Other Assets, Less Liabilities			0.1



SECTOR ALLOCATION (%)⁵
Financials			24.9
Information Technology			22.7
Industrials			16.2
Consumer Discretionary			11.7
Health Care			9.0
Consumer Staples			7.1
Communication Services			4.7
Real Estate			2.1
Utilities			1.5
Cash and Other Assets, Less Liabilities			0.1



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			22.3
Large Cap ($10B-$25B)			15.7
Mid Cap ($3B-10B)			40.6
Small Cap (under $3B)			21.4
Cash and Other Assets, Less Liabilities			0.1


				matthewsasia.com \| 833.228.5605			15

Matthews Emerging Markets Sustainable Future Active ETF

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 99.5%


	Shares		Value

CHINA/HONG KONG: 41.1%
JD Health International, Inc.^b,c,d		153,950		$770,879

Full Truck Alliance Co., Ltd. ADR^c		102,617		719,345

Meituan Class B^b,c,d		59,400		623,017

Legend Biotech Corp. ADR^c		9,493		571,194

Hong Kong Exchanges & Clearing, Ltd.		15,400		528,549

Airtac International Group		11,000		362,001

Lam Research Corp.		407		318,787

Zhihu, Inc. ADR^c		322,873		302,338

Medlive Technology Co., Ltd.^b,d		236,500		256,836

Contemporary Amperex Technology Co., Ltd. A Shares		9,900		226,986

Silergy Corp.		11,000		179,209

Flat Glass Group Co., Ltd. H Shares		102,000		172,165

Ginlong Technologies Co., Ltd. A Shares		16,500		161,974

Innovent Biologics, Inc.^b,c,d		22,000		120,445

Hangzhou Tigermed Consulting Co., Ltd. A Shares		11,000		84,918

Wuxi Biologics Cayman, Inc.^b,c,d		22,000		83,396

OPT Machine Vision Tech Co., Ltd. A Shares		4,499		70,765

Centre Testing International Group Co., Ltd. A Shares		35,200		70,477

Zhejiang HangKe Technology, Inc. Co. A Shares		21,329		70,332

China Conch Venture Holdings, Ltd.		82,500		68,463

Morimatsu International Holdings Co., Ltd.^c,d		66,000		46,488

WuXi XDC Cayman, Inc.^c		520		2,131

Total China/Hong Kong				5,810,695



INDIA: 20.2%
Shriram Finance, Ltd.		38,729		955,639

Bandhan Bank, Ltd.^b,d		312,794		907,404

Indus Towers, Ltd.^c		152,524		364,842

Phoenix Mills, Ltd.		10,494		283,071

Mahindra & Mahindra, Ltd.		10,901		226,551

UNO Minda, Ltd.		10,230		84,537

Marico, Ltd.		5,411		35,666

Total India				2,857,710



TAIWAN: 9.5%
Andes Technology Corp.		22,000		344,080

Elite Material Co., Ltd.		22,000		273,831

M31 Technology Corp.		6,000		207,230

Poya International Co., Ltd.		11,000		197,846

Sporton International, Inc.		22,000		172,757

Formosa Sumco Technology Corp.		22,000		120,787

AP Memory Technology Corp.		2,000		30,563

Total Taiwan				1,347,094



BRAZIL: 7.7%
YDUQS Participacoes SA		114,400		528,007

B3 SA - Brasil Bolsa Balcao		152,900		457,982

NU Holdings, Ltd. Class A^c		12,760		106,291

Total Brazil				1,092,280



SOUTH KOREA: 7.5%
Samsung SDI Co., Ltd.		1,462		535,805

Eugene Technology Co., Ltd.		7,370		233,478


	Shares		Value

Solus Advanced Materials Co., Ltd.		7,304		$150,288

Ecopro BM Co., Ltd.		594		132,830

LG Energy Solution, Ltd.^c		22		7,303

Total South Korea				1,059,704



UNITED STATES: 3.6%
Micron Technology, Inc.		6,015		513,320

Total United States				513,320



POLAND: 3.2%
InPost SA^c		17,963		248,333

Jeronimo Martins SGPS SA		8,074		205,493

Total Poland				453,826



SAUDI ARABIA: 2.6%
Saudi Tadawul Group Holding Co.		7,623		373,222

Total Saudi Arabia				373,222



ROMANIA: 1.3%
Banca Transilvania SA		34,716		187,008

Total Romania				187,008



JORDAN: 1.1%
Hikma Pharmaceuticals PLC		6,721		153,280

Total Jordan				153,280



CHILE: 0.8%
Aguas Andinas SA Class A		324,797		105,850

Total Chile				105,850



ESTONIA: 0.7%
Enefit Green AS		25,443		99,944

Total Estonia				99,944



VIETNAM: 0.1%
Nam Long Investment Corp.		12,600		19,034

Total Vietnam				19,034



BANGLADESH: 0.1%
BRAC Bank PLC		17,844		5,447

GrameenPhone, Ltd.		1,302		3,103

Total Bangladesh				8,550



TOTAL COMMON EQUITIES				14,081,517

(Cost $13,460,189)


PREFERRED EQUITIES: 0.4%

SOUTH KOREA: 0.4%
Samsung SDI Co., Ltd., Pfd.		341		65,134

Total South Korea				65,134



TOTAL PREFERRED EQUITIES				65,134

(Cost $61,975)


16		Matthews Emerging Markets Sustainable Future Active ETF

Matthews Emerging Markets Sustainable Future Active ETF

December 31, 2023

Schedule of Investments^a (continued)

SHORT-TERM INVESTMENTS: 0.2%


	Shares		Value

MONEY MARKET FUNDS: 0.2%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^e		26,961		$26,961

(Cost $26,961)


TOTAL INVESTMENTS: 100.1%				14,173,612
(Cost $13,549,125)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (0.1%)				(19,013	)


NET ASSETS: 100.0%				$14,154,599

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	Non-income producing security.

d	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

e	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

Pfd.

Preferred

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			17

LOGO


PORTFOLIO MANAGERS

Michael J. Oh, CFA
Lead Manager

Inbok Song
Co-Manager

FUND FACTS

Ticker		MINV
CUSIP		577125826
Inception Date		07/13/22
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$23.56
Market Price (as of 12/31/23)		$23.41
# of Positions		49
Net Assets		$84.8 million
Portfolio Turnover		277.86%
Weight Average Market Cap		$188.3 billion
Benchmark
MSCI AC Asia ex Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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 that Matthews believes are innovators in their products, services, processes, business models, management, use of technology, or approach to creating, expanding or servicing their markets. Asia ex Japan consists of all countries and markets in Asia excluding Japan, including developed, emerging, and frontier countries and markets in the Asia region.

Matthews Asia Innovators Active ETF (unaudited)

FUND INSIGHTS

•

The top three contributors to absolute performance during the year included PDD Holdings, a Chinese consumer discretionary company, Alchip Technologies, a Taiwanese information technology company, and Samsung Electronics, a South Korean information technology company.

•

The largest detractors to performance during the year included Meituan, a Chinese consumer discretionary company, Wuxi Biologics, a Chinese health care company, and Kuaishou Technology, a Chinese communication services company.

•

The top three contributors to relative performance, on a country basis, were United States due to an off-benchmark allocation, Thailand due to underweight allocation and Malaysia due to zero allocation.

•

The top three detractors to relative performance, on a country basis, were China/Hong Kong, India and South Korea due to stock selection.

•

The top three contributors to relative performance, on a sector basis, were real estate due to stock selection, information technology due to overweight allocation and stock selection and utilities due to zero allocation.

•

The top three detractors to relative performance, on a sector basis, were communication services and health care due to stock selection and consumer discretionary due to overweight allocation.



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		YTD		Since Inception		Inception date
Asia Innovators Active ETF (NAV)¹		6.00%		-1.83%		-3.30%		07/13/22
Asia Innovators Active ETF (market price)		5.89%		-2.66%		-3.72%
MSCI AC Asia ex Japan Index²		6.48%		6.34%		3.25%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION

LOGO


18		Matthews Asia Innovators Active ETF



TOP TEN HOLDINGS³
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Information Technology	Taiwan		9.0%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		7.5%
PDD Holdings, Inc. ADR	Consumer Discretionary	China		7.1%
NVIDIA Corp.	Information Technology	United States		3.5%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		3.5%
ICICI Bank, Ltd.	Financials	India		3.4%
Axis Bank, Ltd.	Financials	India		3.4%
SK Hynix, Inc.	Information Technology	South Korea		3.2%
Reliance Industries, Ltd.	Energy	India		3.1%
Zomato, Ltd.	Consumer Discretionary	India		2.9%
% OF ASSETS IN TOP 10				46.7%

Holdings may combine more than one security from same issuer and related depositary receipts.



COUNTRY ALLOCATION (%)^4,5
China/Hong Kong			32.5
India			25.2
Taiwan			14.9
South Korea			13.9
United States			5.0
Indonesia			3.5
Hong Kong			2.1
Netherlands			1.9
Brazil			1.1
Cash and Other Assets, Less Liabilities			2.1



SECTOR ALLOCATION (%)⁵
Information Technology			32.9
Consumer Discretionary			25.3
Financials			18.3
Industrials			7.1
Communication Services			5.8
Energy			3.1
Health Care			3.0
Consumer Staples			1.2
Real Estate			1.0
Cash and Other Assets, Less Liabilities			2.1



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			72.0
Large Cap ($10B-$25B)			14.1
Mid Cap ($3B-10B)			11.6
Small Cap (under $3B)			0.2
Cash and Other Assets, Less Liabilities			2.1

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


				matthewsasia.com \| 833.228.5605			19

Matthews Asia Innovators Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 97.9%


	Shares		Value

CHINA/HONG KONG: 32.5%

PDD Holdings, Inc. ADR^a		41,360		$6,051,382

Alibaba Group Holding, Ltd.		246,900		2,390,410

AIA Group, Ltd.		208,600		1,817,909

Tencent Holdings, Ltd.		41,400		1,556,632

Trip.com Group, Ltd. ADR^a		35,977		1,295,532

WuXi AppTec Co., Ltd. A Shares		126,500		1,292,607

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		31,500		1,285,552

Meituan Class B^a,b,c		120,900		1,268,060

Full Truck Alliance Co., Ltd. ADR^a		177,854		1,246,757

Contemporary Amperex Technology Co., Ltd. A Shares		49,000		1,123,464

Shenzhen Inovance Technology Co., Ltd. A Shares		115,500		1,024,165

Kanzhun, Ltd. ADR		60,394		1,003,144

BYD Co., Ltd. H Shares		36,000		988,455

Zhejiang Shuanghuan Driveline Co., Ltd. A Shares		240,600		879,197

KE Holdings, Inc. ADR		53,970		874,854

MINISO Group Holding, Ltd. ADR		41,795		852,618

DiDi Global, Inc.^a		206,083		814,028

New Oriental Education & Technology Group, Inc. ADR^a		9,597		703,268

Tencent Music Entertainment Group ADR^a		72,799		655,919

NAURA Technology Group Co., Ltd. A Shares		12,600		434,787

Total China/Hong Kong				27,558,740



INDIA: 25.2%

ICICI Bank, Ltd.		244,205		2,924,693

Axis Bank, Ltd.		216,860		2,872,660

Reliance Industries, Ltd.		84,358		2,620,495

Zomato, Ltd.^a		1,657,568		2,464,030

HDFC Bank, Ltd.		114,352		2,348,844

Mahindra & Mahindra, Ltd.		84,426		1,754,594

Godrej Consumer Products, Ltd.		76,845		1,044,624

Indian Hotels Co., Ltd.		194,228		1,023,146

ABB India, Ltd.		17,667		992,511

Titan Co., Ltd.		19,463		859,657

Bajaj Finance, Ltd.		9,407		828,374

Cummins India, Ltd.		34,274		808,910

HDFC Life Insurance Co., Ltd.^b,c		103,338		803,097

Total India				21,345,635



TAIWAN: 14.9%

Taiwan Semiconductor Manufacturing Co., Ltd.		396,000		7,651,488

Alchip Technologies, Ltd.		17,000		1,814,079

Accton Technology Corp.		54,000		920,220

Unimicron Technology Corp.		146,000		837,262

Wiwynn Corp.		14,000		832,505

Lotes Co., Ltd.		12,000		418,371

M31 Technology Corp.		5,000		172,692

Total Taiwan				12,646,617



SOUTH KOREA: 13.9%

Samsung Electronics Co., Ltd.		104,392		6,362,895

SK Hynix, Inc.		24,575		2,700,025


	Shares		Value

NAVER Corp.		10,022		$1,743,092

Kia Corp.		12,447		966,457

Total South Korea				11,772,469



UNITED STATES: 5.0%

NVIDIA Corp.		5,986		2,964,387

Applied Materials, Inc.		7,724		1,251,828

Total United States				4,216,215



INDONESIA: 3.5%

PT Bank Rakyat Indonesia Persero Tbk		7,968,200		2,962,781

Total Indonesia				2,962,781



NETHERLANDS: 1.8%

ASML Holding NV		2,091		1,582,720

Total Netherlands				1,582,720



BRAZIL: 1.1%

NU Holdings, Ltd. Class A^a		111,730		930,711

Total Brazil				930,711



TOTAL COMMON EQUITIES				83,015,888

(Cost $70,816,737)


SHORT-TERM INVESTMENTS: 0.7%

MONEY MARKET FUNDS: 0.7%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^d		579,144		579,144

(Cost $579,144)


TOTAL INVESTMENTS: 98.6%				83,595,032
(Cost $71,395,881)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.4%				1,214,371



NET ASSETS: 100.0%				$84,809,403

a	Non-income producing security.

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


20		Matthews Asia Innovators Active ETF

LOGO


PORTFOLIO MANAGERS

Sean Taylor		Inbok Song
Lead Manager		Lead Manager

Winnie Chwang		Andrew Mattock, CFA
Co-Manager		Co-Manager

Peeyush Mittal, CFA		Jeremy Sutch, CFA
Co-Manager		Co-Manager



FUND FACTS

Ticker		ASIA
CUSIP		577130578
Inception Date		09/21/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$25.33
Market Price (as of 12/31/23)		$25.44
# of Positions		52
Net Assets		$79.8 million
Portfolio Turnover		12.07%
Weight Average Market Cap		$139.4 billion
Benchmark
MSCI AC Asia ex Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Under normal circumstances, the 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.

3	Holdings may combine more than one security from same issuer and related depositary receipts.

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Pacific Tiger Active ETF (unaudited)



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 months		Since Inception		Inception date
Pacific Tiger Active ETF (NAV)¹		1.85%		1.44%		09/21/23
Pacific Tiger Active ETF (market price)		2.21%		1.88%
MSCI AC Asia ex Japan Index²		6.48%		6.39%



TOP TEN HOLDINGS³
Name	Country	Sector	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. ADR	Taiwan	Information Technology		8.8%
Samsung Electronics Co., Ltd.	South Korea	Information Technology		8.8%
Tencent Holding, Ltd.	China	Communication Services		4.5%
Central Pattana Public Co., Ltd.	Thailand	Real Estate		3.7%
ICICI Bank, Ltd. ADR	India	Financials		3.1%
Titan Co., Ltd.	India	Consumer Discretionary		3.1%
HDFC Bank, Ltd. ADR	India	Financials		3.0%
Alibaba Group Holding, Ltd. ADR	China	Consumer Discretionary		2.9%
PT Bank Central Asia Tbk	Indonesia	Financials		2.8%
CITIC Securities Co., Ltd. H Shares	China	Financials		2.5%
% OF ASSETS IN TOP 10				43.0%



COUNTRY ALLOCATION (%)^4,5
China/Hong Kong			36.8
India			19.8
Taiwan			19.0
South Korea			13.3
Thailand			3.7
Indonesia			2.8
Philippines			2.0
Singapore			1.5
Vietnam			0.9
Cash and Other Assets, Less Liabilities			0.2



SECTOR ALLOCATION (%)⁵
Information Technology			28.3
Financials			19.4
Consumer Discretionary			12.1
Real Estate			9.5
Communication Services			9.2
Consumer Staples			8.1
Industrials			6.4
Materials			3.3
Utilities			1.9
Health Care			1.7
Cash and Other Assets, Less Liabilities			0.2



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			62.6
Large Cap ($10B-$25B)			19.5
Mid Cap ($3B-10B)			17.6
Small Cap (under $3B)			0.0
Cash and Other Assets, Less Liabilities			0.2


				matthewsasia.com \| 833.228.5605			21

Matthews Pacific Tiger Active ETF

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 99.8%


	Shares		Value

CHINA/HONG KONG: 36.8%

Tencent Holdings, Ltd.		94,500		$3,553,182

Alibaba Group Holding, Ltd. ADR		30,343		2,351,886

CITIC Securities Co., Ltd. H Shares		976,500		1,993,380

AIA Group, Ltd.		226,800		1,976,518

KE Holdings, Inc. ADR		109,116		1,768,770

Shenzhen Inovance Technology Co., Ltd. A Shares		195,300		1,731,770

Hong Kong Exchanges & Clearing, Ltd.		50,400		1,729,796

Kweichow Moutai Co., Ltd. A Shares		6,300		1,527,090

Yum China Holdings, Inc.		35,073		1,488,147

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		33,300		1,359,012

China Resources Mixc Lifestyle Services, Ltd.^b,c		365,400		1,303,237

China Resources Beer Holdings Co., Ltd.		288,000		1,261,387

China Tourism Group Duty Free Corp., Ltd. A Shares		81,900		962,589

Will Semiconductor Co., Ltd. Shanghai A Shares		63,000		944,124

Contemporary Amperex Technology Co., Ltd. A Shares		37,800		866,673

Tencent Music Entertainment Group ADR^d		91,556		824,920

Kuaishou Technology^b,c,d		119,700		811,689

Shandong Sinocera Functional Material Co., Ltd. A Shares		239,400		777,312

StarPower Semiconductor, Ltd. A Shares		25,200		640,564

Meituan Class B^b,c,d		55,400		581,063

Kanzhun, Ltd. ADR		32,940		547,133

ENN Energy Holdings, Ltd.		50,400		371,132

WuXi XDC Cayman, Inc.^d		120		492

Total China/Hong Kong				29,371,866



INDIA: 19.8%

ICICI Bank, Ltd. ADR		103,572		2,469,157

Titan Co., Ltd.		55,503		2,451,500

HDFC Bank, Ltd. ADR		35,112		2,356,366

Pidilite Industries, Ltd.		56,196		1,833,564

Tata Consultancy Services, Ltd.		39,128		1,783,697

Ashok Leyland, Ltd.		616,455		1,344,939

Tata Power Co., Ltd.		285,516		1,139,645

Dabur India, Ltd.		146,186		978,863

Tata Consumer Products, Ltd.		63,664		831,474

Mahindra & Mahindra, Ltd.		30,601		635,969

Total India				15,825,174



TAIWAN: 19.0%

Taiwan Semiconductor Manufacturing Co., Ltd. ADR		67,479		7,017,816

Chailease Holding Co., Ltd.		252,000		1,584,725

MediaTek, Inc.		43,000		1,422,101

E Ink Holdings, Inc.		181,000		1,161,825

Eclat Textile Co., Ltd.		63,000		1,153,647

Accton Technology Corp.		63,000		1,073,590

Uni-President Enterprises Corp.		361,000		876,313

Delta Electronics, Inc.		63,000		643,538

ASE Technology Holding Co., Ltd.		58,000		255,128

Total Taiwan				15,188,683



SOUTH KOREA: 13.3%

Samsung Electronics Co., Ltd.		115,026		7,011,057

NAVER Corp.		9,111		1,584,645


	Shares		Value

Samsung Engineering Co., Ltd.^d		52,101		$1,173,173

Orion Corp.		9,180		827,547

Total South Korea				10,596,422



THAILAND: 3.7%

Central Pattana Public Co., Ltd.		1,436,400		2,921,888

Total Thailand				2,921,888



INDONESIA: 2.8%

PT Bank Central Asia Tbk		3,604,200		2,200,395

Total Indonesia				2,200,395



PHILIPPINES: 2.0%

SM Prime Holdings, Inc.		2,624,100		1,559,059

Total Philippines				1,559,059



SINGAPORE: 1.5%

DBS Group Holdings, Ltd.		47,700		1,208,140

Total Singapore				1,208,140



VIETNAM: 0.9%

FPT Corp.		151,900		601,664
Vietnam Dairy Products JSC		53,100		147,950

Total Vietnam				749,614



TOTAL COMMON EQUITIES				79,621,241

(Cost $76,623,537)


SHORT-TERM INVESTMENTS: 4.7%

MONEY MARKET FUNDS: 4.7%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^e		3,771,939		3,771,939

(Cost $3,771,939)


TOTAL INVESTMENTS: 104.5%				83,393,180
(Cost $80,395,476)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (4.5%)				(3,604,029	)



NET ASSETS: 100.0%				$79,789,151

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Non-income producing security.

e	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

JSC	Joint Stock Co.

See accompanying notes to financial statements.


22		Matthews Pacific Tiger Active ETF

LOGO


PORTFOLIO MANAGERS

Andrew Mattock, CFA
Lead Manager

Winnie Chwang		Sherwood Zhang, CFA
Co-Manager		Co-Manager

FUND FACTS

Ticker		MCH
CUSIP		577125834
Inception Date		07/13/22
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$19.07
Market Price (as of 12/31/23)		$19.04
# of Positions		51
Net Assets		$21.7 million
Portfolio Turnover		58.98%
Weight Average Market Cap		$101 billion
Benchmark
MSCI China Index
MSCI China All Shares Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

Matthews China Active ETF (unaudited)

FUND INSIGHTS

•

The top three contributors to absolute performance during the year included PDD Holdings, a consumer discretionary company, Beijing Kingsoft Office Software, an information technology company, and Tencent Music Entertainment Group, a communication services company.

•

The largest detractors to performance during the year included Meituan and JD.com, a consumer discretionary company and CIFI Holdings (Group), a real estate company.

•

The top three contributors to relative performance, on a sector basis, were materials due to an underweight allocation, and information technology and consumer staples due to stock selection.

•

The top three detractors to relative performance, on a sector basis, were real estate and consumer discretionary due to stock selection and communication services due to an underweight allocation.



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 Months		1 Year		Since Inception		Inception date
China Active ETF (NAV)¹		-5.23%		-19.35%		-15.89%		07/13/22
China Active ETF (market price)		-5.68%		-19.92%		-16.00%
MSCI China Index²		-4.21%		-11.04%		-12.49%
MSCI China All Shares Index²		-3.81%		-11.35%		-13.90%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION

LOGO


				matthewsasia.com \| 833.228.5605			23



TOP TEN HOLDINGS³
	Sector
Tencent Holdings, Ltd.	Communication Services	8.9%
Alibaba Group Holding, Ltd.	Consumer Discretionary	7.8%
PDD Holdings, Inc. ADR	Consumer Discretionary	7.2%
JD.com, Inc. Class A	Consumer Discretionary	4.6%
CITIC Securities Co., Ltd. H Shares	Financials	4.4%
China Merchants Bank Co., Ltd. A Shares	Financials	4.2%
KE Holdings, Inc. ADR	Real Estate	4.0%
Meituan Class B	Consumer Discretionary	3.7%
China International Capital Corp., Ltd. H Shares	Financials	3.3%
China Construction Bank Corp. H Shares	Financials	2.1%
% OF ASSETS IN TOP 10		50.1%

Holdings may combine more than one security from same issuer and related depositary receipts.



COUNTRY ALLOCATION (%)^4,5
China/Hong Kong			99.4
Cash and Other Assets, Less Liabilities			0.6



SECTOR ALLOCATION (%)⁴
Consumer Discretionary			33.9
Financials			18.9
Communication Services			15.4
Consumer Staples			6.7
Industrials			6.5
Real Estate			5.7
Information Technology			5.3
Health Care			4.2
Energy			1.8
Utilities			0.9
Cash and Other Assets, Less Liabilities			0.6



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			63.8
Large Cap ($10B-$25B)			24.3
Mid Cap ($3B-10B)			7.3
Small Cap (under $3B)			3.9
Cash and Other Assets, Less Liabilities			0.6

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


24		Matthews China Active ETF

Matthews China Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 99.4%


	Shares		Value

CONSUMER DISCRETIONARY: 34.0%
Broadline Retail: 19.7%

Alibaba Group Holding, Ltd.		175,400		$1,698,169

PDD Holdings, Inc. ADR^a		10,728		1,569,614

JD.com, Inc. Class A		70,050		1,009,230

				4,277,013


Hotels, Restaurants & Leisure: 8.9%

Meituan Class B^a,b,c		77,010		807,719

Galaxy Entertainment Group, Ltd.		74,000		414,610

Yum China Holdings, Inc.		6,253		265,315

Trip.com Group, Ltd. ADR^a		6,871		247,425

Luckin Coffee, Inc. ADR^a		7,418		202,363

				1,937,432


Household Durables: 3.1%

Midea Group Co., Ltd. A Shares		47,400		363,658

Man Wah Holdings, Ltd.		436,000		298,724

				662,382


Diversified Consumer Services: 0.8%
China Education Group Holdings, Ltd.^c		292,000		183,235


Automobiles: 0.8%
Yadea Group Holdings, Ltd.^b,c		92,000		161,648


Specialty Retail: 0.7%
China Tourism Group Duty Free Corp., Ltd. A Shares		13,300		156,318

Total Consumer Discretionary				7,378,028



FINANCIALS: 18.9%
Capital Markets: 9.3%

CITIC Securities Co., Ltd. H Shares		463,500		946,167

China International Capital Corp., Ltd. H Shares^b,c		483,600		709,742

Hong Kong Exchanges & Clearing, Ltd.		6,300		216,225

East Money Information Co., Ltd. A Shares		80,040		157,818

				2,029,952

Banks: 6.3%

China Merchants Bank Co., Ltd. A Shares		233,500		912,278

China Construction Bank Corp. H Shares		756,000		450,199

				1,362,477

Insurance: 3.3%

Ping An Insurance Group Co. of China, Ltd. H Shares		87,000		393,857

PICC Property & Casualty Co., Ltd. H Shares		266,000		316,125

				709,982

Total Financials				4,102,411



COMMUNICATION SERVICES: 15.4%
Interactive Media & Services: 11.5%

Tencent Holdings, Ltd.		51,400		1,932,630

Kuaishou Technology^a,b,c		50,400		341,764

Baidu, Inc. Class A^a		15,300		227,485

				2,501,879


Entertainment: 2.0%

Tencent Music Entertainment Group ADR^a		47,295		426,128


	Shares		Value
Media: 1.9%

Focus Media Information Technology Co., Ltd. A Shares		478,911		$425,065

Total Communication Services				3,353,072



CONSUMER STAPLES: 6.7%
Beverages: 4.3%

Wuliangye Yibin Co., Ltd. A Shares		18,700		368,480

Tsingtao Brewery Co., Ltd. H Shares		46,000		308,687

Shanxi Xinghuacun Fen Wine Factory Co., Ltd. A Shares		8,100		262,466

				939,633


Consumer Staples Distribution & Retail: 1.3%

JD Health International, Inc.^a,b,c		54,600		273,400


Food Products: 1.1%

Guangdong Haid Group Co., Ltd. A Shares		38,600		243,452

Total Consumer Staples				1,456,485



INDUSTRIALS: 6.5%
Electrical Equipment: 3.3%

Contemporary Amperex Technology Co., Ltd. A Shares		16,300		373,724

Sungrow Power Supply Co., Ltd. A Shares		29,100		357,957

				731,681


Machinery: 2.1%

Shenzhen Inovance Technology Co., Ltd. A Shares		30,600		271,337

Estun Automation Co., Ltd. A Shares		68,600		179,096

				450,433


Transportation Infrastructure: 1.1%

Shanghai International Airport Co., Ltd. A Shares^a		51,252		235,941

Total Industrials				1,418,055



REAL ESTATE: 5.7%
Real Estate Management & Development: 5.7%

KE Holdings, Inc. ADR		53,212		862,567

Country Garden Services Holdings Co., Ltd.		224,000		193,634

CIFI Holdings Group Co., Ltd.^a		3,718,000		121,417

Times China Holdings, Ltd.^a		1,790,000		59,601

Total Real Estate				1,237,219



INFORMATION TECHNOLOGY: 5.3%
Electronic Equipment, Instruments & Components: 2.4%

Wingtech Technology Co., Ltd. A Shares^a		46,800		278,081

SUPCON Technology Co., Ltd. A Shares		36,470		232,272

				510,353


Semiconductors & Semiconductor Equipment: 1.5%

NAURA Technology Group Co., Ltd. A Shares		5,887		203,142

Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. A Shares		21,503		133,145

				336,287


				matthewsasia.com \| 833.228.5605			25

Matthews China Active ETF

December 31, 2023

Schedule of Investments (continued)

COMMON EQUITIES (continued)


	Shares		Value
Software: 1.4%

Shanghai Baosight Software Co., Ltd. A Shares		44,256		$303,302

Total Information Technology				1,149,942



HEALTH CARE: 4.2%
Health Care Equipment & Supplies: 1.9%

Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		10,000		408,112


Life Sciences Tools & Services: 1.4%

Wuxi Biologics Cayman, Inc.^a,b,c		80,500		305,153

WuXi XDC Cayman, Inc.^a		153		627

				305,780


Health Care Providers & Services: 0.9%

Sinopharm Group Co., Ltd. H Shares		78,000		204,276

Total Health Care				918,168



ENERGY: 1.8%
Oil, Gas & Consumable Fuels: 1.8%

PetroChina Co., Ltd. H Shares		602,000		397,810

Total Energy				397,810



UTILITIES: 0.9%
Gas Utilities: 0.9%

ENN Energy Holdings, Ltd.		27,400		201,766

Total Utilities				201,766



TOTAL COMMON EQUITIES				21,612,956

(Cost $28,176,536)


SHORT-TERM INVESTMENTS: 0.5%

MONEY MARKET FUNDS: 0.5%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^d		106,564		106,564

(Cost $106,564)


TOTAL INVESTMENTS: 99.9%				21,719,520
(Cost $28,283,100)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.1%				17,680


NET ASSETS: 100.0%				$21,737,200

a	Non-income producing security.

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


26		Matthews China Active ETF

LOGO


PORTFOLIO MANAGERS

Peeyush Mittal, CFA
Lead Manager

Swagato Ghosh
Co-Manager

FUND FACTS

Ticker		INDE
CUSIP		577130610
Inception Date		09/21/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$27.00
Market Price (as of 12/31/23)		$27.03
# of Positions		60
Net Assets		$5.9 million
Portfolio Turnover		14.97%
Weight Average Market Cap		$44.1 billion
Benchmark
S&P Bombay Stock Exchange 100 Index MSCI India Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

4	Holdings may combine more than one security from same issuer and related depositary receipts.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews India Active ETF (unaudited)



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 months		Since Inception		Inception date
India Active ETF (NAV)¹		8.48%		8.00%		09/21/23
India Active ETF (market price)		9.34%		8.12%
S&P Bombay Stock Exchange 100 Index²		11.38%		10.89%
MSCI India Index³		11.98%		11.59%



TOP TEN HOLDINGS⁴
Name	Sector	% Net Assets
HDFC Bank, Ltd.	Financials		6.1%
ICICI Bank, Ltd.	Financials		5.2%
Reliance Industries, Ltd.	Energy		4.7%
Shriram Finance, Ltd.	Financials		4.5%
Neuland Laboratories, Ltd.	Health Care		4.2%
Infosys, Ltd.	Information Technology		4.0%
IndusInd Bank, Ltd.	Financials		3.3%
Axis Bank, Ltd.	Financials		3.2%
Tata Consultancy Services, Ltd.	Information Technology		3.2%
Titan Co., Ltd.	Consumer Discretionary		2.3%
% OF ASSETS IN TOP 10			40.7%



COUNTRY ALLOCATION (%)⁵
India			100.7
Liabilities in Excess of Cash and Other Assets			-0.7



SECTOR ALLOCATION (%)⁵
Financials			33.4
Information Technology			15.4
Consumer Discretionary			12.0
Industrials			11.2
Health Care			10.6
Consumer Staples			9.1
Energy			4.7
Materials			4.1
Communication Services			0.2
Liabilities in Excess of Cash and Other Assets			-0.7



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			41.5
Large Cap ($10B-$25B)			15.4
Mid Cap ($3B-10B)			24.3
Small Cap (under $3B)			19.6
Liabilities in Excess of Cash and Other Assets			-0.7


				matthewsasia.com \| 833.228.5605			27

Matthews India Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 100.7%


	Shares		Value

FINANCIALS: 33.4%
Banks: 22.5%
HDFC Bank, Ltd.		17,527		$360,013

ICICI Bank, Ltd.		25,868		309,805

IndusInd Bank, Ltd.		10,054		193,187

Axis Bank, Ltd.		14,562		192,897

Kotak Mahindra Bank, Ltd.		5,197		119,168

Federal Bank, Ltd.		62,610		117,487

Bandhan Bank, Ltd.^a,b		15,343		44,510

				1,337,067


Consumer Finance: 9.4%
Shriram Finance, Ltd.		10,818		266,934

Bajaj Finance, Ltd.		1,333		117,383

Cholamandalam Investment and Finance Co., Ltd.		6,407		96,998

Mahindra & Mahindra Financial Services, Ltd.		22,033		73,264

				554,579


Insurance: 1.5%
PB Fintech, Ltd.^c		6,546		62,511

HDFC Life Insurance Co., Ltd.^a,b		3,465		26,928

				89,439

Total Financials				1,981,085



INFORMATION TECHNOLOGY: 15.4%
IT Services: 12.5%
Infosys, Ltd.		12,722		235,884

Tata Consultancy Services, Ltd.		4,198		191,371

LTIMindtree, Ltd.^a,b		1,176		88,962

Persistent Systems, Ltd.		999		88,711

Coforge, Ltd.		977		73,667

HCL Technologies, Ltd.		3,655		64,395

				742,990


Software: 1.9%
Newgen Software Technologies, Ltd.		6,037		113,338


Electronic Equipment, Instruments & Components: 1.0%

Kaynes Technology India, Ltd.^c		987		30,964

Syrma SGS Technology, Ltd.		3,692		29,771

				60,735

Total Information Technology				917,063



CONSUMER DISCRETIONARY: 12.0%
Automobiles: 5.0%
Bajaj Auto, Ltd.		1,364		111,417

TVS Motor Co., Ltd.		4,499		109,526

Maruti Suzuki India, Ltd.		599		74,160

				295,103


Automobile Components: 2.5%

Sona Blw Precision Forgings, Ltd.^a,b		8,536		66,112

Divgi Torqtransfer Systems, Ltd.		3,229		38,057

Alicon Castalloy, Ltd.		2,809		29,324

Dynamatic Technologies, Ltd.		239		14,684

				148,177


	Shares		Value
Textiles, Apparel & Luxury Goods: 2.3%
Titan Co., Ltd.		3,145		$138,911

Hotels, Restaurants & Leisure: 1.5%
Restaurant Brands Asia, Ltd.^c		44,264		59,470

Lemon Tree Hotels, Ltd.^a,b,c		20,668		29,767

				89,237


Specialty Retail: 0.7%
Shankara Building Products, Ltd.		4,921		42,206

Total Consumer Discretionary				713,634



INDUSTRIALS: 11.2%
Machinery: 4.7%
Cummins India, Ltd.		5,020		118,479

Thermax, Ltd.		2,664		98,651

Ashok Leyland, Ltd.		28,114		61,337

				278,467


Electrical Equipment: 2.1%
Bharat Heavy Electricals, Ltd.		53,628		124,735


Construction & Engineering: 1.7%
Sterling and Wilson Renewable Energy, Ltd.^b,c		10,921		56,742

Voltas, Ltd.		3,807		44,759

				101,501


Transportation Infrastructure: 1.5%
Gujarat Pipavav Port, Ltd.		48,037		88,352


Professional Services: 1.2%
Latent View Analytics, Ltd.^c		13,340		72,949

Total Industrials				666,004



HEALTH CARE: 10.6%
Pharmaceuticals: 5.5%
Neuland Laboratories, Ltd.		3,960		251,809

Sun Pharmaceutical Industries, Ltd.		4,968		75,191

				327,000


Life Sciences Tools & Services: 2.0%
Syngene International, Ltd.^a,b		7,080		59,681

Divi’s Laboratories, Ltd.		1,210		56,766

				116,447


Health Care Equipment & Supplies: 1.9%
Poly Medicure, Ltd.		6,333		113,389


Health Care Providers & Services: 1.2%
Metropolis Healthcare, Ltd.^a,b		3,506		70,705

Total Health Care				627,541



CONSUMER STAPLES: 9.1%
Food Products: 4.8%
Britannia Industries, Ltd.		1,992		127,794

Nestle India, Ltd.		396		126,491

Tata Consumer Products, Ltd.		2,434		31,789

				286,074


Personal Care Products: 4.3%
Hindustan Unilever, Ltd.		3,794		121,458

Godrej Consumer Products, Ltd.		5,236		71,178


28		Matthews India Active ETF

Matthews India Active ETF

December 31, 2023

Schedule of Investments (continued)

COMMON EQUITIES (continued)


	Shares		Value

Honasa Consumer, Ltd.^c		9,100		$48,204

Bajaj Consumer Care, Ltd.		5,848		15,433

				256,273

Total Consumer Staples				542,347



ENERGY: 4.7%
Oil, Gas & Consumable Fuels: 4.7%
Reliance Industries, Ltd.		8,921		277,122

Total Energy				277,122



MATERIALS: 4.1%
Chemicals: 2.2%
PI Industries, Ltd.		1,584		66,926

Asian Paints, Ltd.		1,506		61,577

				128,503


Metals & Mining: 1.2%
APL Apollo Tubes, Ltd.		3,944		72,838


Construction Materials: 0.7%
Ramco Cements, Ltd.		3,467		42,512

Total Materials				243,853



COMMUNICATION SERVICES: 0.2%
Diversified Telecommunication Services: 0.2%
HFCL, Ltd.		14,286		14,447

Total Communication Services				14,447



TOTAL INVESTMENTS: 100.7%				5,983,096
(Cost $5,499,236)


LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS: (0.7%)				(43,183	)


NET ASSETS: 100.0%				$5,939,913

b	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

c	Non-income producing security.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			29

LOGO


PORTFOLIO MANAGERS

Shuntaro Takeuchi		Donghoon Han
Lead Manager		Lead Manager

FUND FACTS

Ticker		JPAN
CUSIP		577130594
Inception Date		09/21/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$26.31
Market Price (as of 12/31/23)		$26.29
# of Positions		42
Net Assets		$1.1 million
Portfolio Turnover		45.53%
Weight Average Market Cap		$51.0 billion
Benchmark
MSCI Japan Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

4	Holdings may combine more than one security from same issuer and related depositary receipts.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Japan Active ETF (unaudited)



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 months		Since Inception		Inception date
Japan Active ETF (NAV)¹		8.48%		5.79%		09/21/23
Japan Active ETF (market price)		8.31%		5.71%
MSCI Japan index²		8.22%		5.01%



TOP TEN HOLDINGS³
	Sector
Shin-Etsu Chemical Co., Ltd.	Materials	5.6%
Sony Group Corp.	Consumer Discretionary	4.5%
Keyence Corp.	Information Technology	4.2%
Tokio Marine Holdings, Inc.	Financials	4.0%
Renesas Electronics Corp.	Information Technology	3.4%
Hitachi, Ltd.	Industrials	3.4%
Tokyo Electron, Ltd.	Information Technology	3.4%
Ajinomoto Co., Inc.	Consumer Staples	2.9%
FUJIFILM Holdings Corp.	Information Technology	2.9%
NEC Corp.	Information Technology	2.8%
% OF ASSETS IN TOP 10		37.2%



COUNTRY ALLOCATION (%)^4,5
Japan			93.9
Cash and Other Assets, Less Liabilities			6.1



SECTOR ALLOCATION (%)⁵
Information Technology			21.1
Consumer Discretionary			20.3
Industrials			19.1
Financials			10.6
Materials			6.1
Health Care			5.1
Consumer Staples			4.9
Communication Services			4.1
Real Estate			2.6
Cash and Other Assets, Less Liabilities			6.1



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			50.5
Large Cap ($10B-$25B)			26.2
Mid Cap ($3B-10B)			14.4
Small Cap (under $3B)			2.7
Cash and Other Assets, Less Liabilities			6.1


30		Matthews Japan Active ETF

Matthews Japan Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 93.9%


	Shares		Value

INFORMATION TECHNOLOGY: 21.1%
Semiconductors & Semiconductor Equipment: 9.2%
Renesas Electronics Corp.^a		2,000		$36,161

Tokyo Electron, Ltd.		200		35,828

Disco Corp.		100		24,812

				96,801


IT Services: 4.4%
NEC Corp.		500		29,614

OBIC Co., Ltd.		100		17,233

				46,847


Electronic Equipment, Instruments & Components: 4.2%
Keyence Corp.		100		44,063


Technology Hardware, Storage & Peripherals: 2.9%
FUJIFILM Holdings Corp.		500		30,050


Software: 0.4%
Appier Group, Inc.^a		300		3,937

Total Information Technology				221,698



CONSUMER DISCRETIONARY: 20.3%
Household Durables: 4.5%
Sony Group Corp.		500		47,560


Automobiles: 4.4%
Suzuki Motor Corp.		600		25,676

Toyota Motor Corp.		1,100		20,212

				45,888


Broadline Retail: 4.3%
Pan Pacific International Holdings Corp.		1,000		23,862

Isetan Mitsukoshi Holdings, Ltd.		2,000		21,762

				45,624


Specialty Retail: 4.3%
Fast Retailing Co., Ltd.		100		24,819

ZOZO, Inc.		900		20,269

				45,088

Hotels, Restaurants & Leisure: 1.6%
Kyoritsu Maintenance Co., Ltd.		400		16,995


Textiles, Apparel & Luxury Goods: 1.2%
Asics Corp.		400		12,535

Total Consumer Discretionary				213,690



INDUSTRIALS: 19.1%
Trading Companies & Distributors: 5.4%

Mitsubishi Corp.		1,500		23,977

ITOCHU Corp.		500		20,453

Toyota Tsusho Corp.		200		11,786

				56,216


Industrial Conglomerates: 5.0%
Hitachi, Ltd.		500		36,069

Hikari Tsushin, Inc.		100		16,584

				52,653


	Shares		Value
Professional Services: 2.8%
Recruit Holdings Co., Ltd.		700		$29,608


Electrical Equipment: 2.7%
Mitsubishi Electric Corp.		2,000		28,358


Construction & Engineering: 1.9%
Kajima Corp.		1,200		20,058


Commercial Services & Supplies: 1.3%
TOPPAN Holdings, Inc.		500		13,956

Total Industrials				200,849



FINANCIALS: 10.6%
Insurance: 4.0%
Tokio Marine Holdings, Inc.		1,700		42,554


Financial Services: 2.5%
ORIX Corp.		1,400		26,376


Banks: 2.5%
Mitsubishi UFJ Financial Group, Inc.		3,000		25,780


Consumer Finance: 1.6%
Credit Saison Co., Ltd.		900		16,595

Total Financials				111,305



MATERIALS: 6.1%
Chemicals: 6.1%
Shin-Etsu Chemical Co., Ltd.		1,400		58,759

Mitsui Chemicals, Inc.		200		5,933

Total Materials				64,692



HEALTH CARE: 5.1%
Pharmaceuticals: 2.9%
Daiichi Sankyo Co., Ltd.		500		13,733

Astellas Pharma, Inc.		800		9,567

Sawai Group Holdings Co., Ltd.		200		7,390

				30,690


Health Care Equipment & Supplies: 2.2%
Terumo Corp.		700		22,949

Total Health Care				53,639



CONSUMER STAPLES: 4.9%
Food Products: 4.9%
Ajinomoto Co., Inc.		800		30,870

Nissin Foods Holdings Co., Ltd.		600		20,943

Total Consumer Staples				51,813



COMMUNICATION SERVICES: 4.1%
Wireless Telecommunication Services: 1.8%
KDDI Corp.		600		19,092


Entertainment: 1.5%
Capcom Co., Ltd.		500		16,158


Diversified Telecommunication Services: 0.8%
Internet Initiative Japan, Inc.		400		8,183

Total Communication Services				43,433


				matthewsasia.com \| 833.228.5605			31

Matthews Japan Active ETF

December 31, 2023

Schedule of Investments (continued)

COMMON EQUITIES (continued)


	Shares		Value

REAL ESTATE: 2.6%
Real Estate Management & Development: 2.6%
Mitsui Fudosan Co., Ltd.		1,100		$26,981

Total Real Estate				26,981



TOTAL COMMON EQUITIES				988,100

(Cost $911,198)


SHORT-TERM INVESTMENTS: 6.1%

MONEY MARKET FUNDS: 6.1%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^b		64,395		64,395

(Cost $64,395)


TOTAL INVESTMENTS: 100.0%				1,052,495
(Cost $975,593)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.0%				26



NET ASSETS: 100.0%				$1,052,521

a	Non-income producing security.

b	Rate shown is the current yield as of December 31, 2023.

See accompanying notes to financial statements.


32		Matthews Japan Active ETF

LOGO


PORTFOLIO MANAGERS

Michael J. Oh		Elli Lee
Lead Manager		Lead Manager

Sojung Park
Co-Manager

FUND FACTS

Ticker		MKOR
CUSIP		577125784
Inception Date		10/29/10
Gross Expense Ratio		0.88%*
NAV (as of 12/31/23)		$26.31
Market Price (as of 12/31/23)		$25.90
# of Positions		35
Net Assets		$67.2 million
Portfolio Turnover		31.75%
Weight Average Market Cap		$93.2 billion
Benchmark
Korea Composite Stock Price Index MSCI Korea Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

*	The ongoing gross expense ratio for the Fund is expected to be 0.79% (see Note 4).

Matthews Korea Active ETF (unaudited)

FUND INSIGHTS

•

The top three contributors to absolute performance during the year included information technology companies SK Hynix, Samsung Electronics and HPSP.

•

The largest detractors to performance during the year included BGF Retail, a consumer staples company, Samsung SDI, an information technology company, and Pan Ocean, an industrials company.

•

The top three contributors to relative performance, on a sector basis, were communication services and consumer discretionary due to stock selection and utilities due to zero allocation.

•

The top three detractors to relative performance, on a sector basis were consumer staples due to an overweight allocation, industrials and energy due to stock selection.



PERFORMANCE AS OF DECEMBER 31, 2023
					Average Annual Total Returns
	3 months		1 Year		5 Years		10 Years		Since Inception		Inception date
Korea Active ETF (NAV)¹		10.92%		15.41%		4.71%		4.27%		5.84%		10/29/10
Korea Active ETF (market price)		10.03%		13.62%		4.38%		4.11%		5.72%
Korea Composite Stock Price Index²		13.57%		17.24%		4.31%		2.61%		3.37%
MSCI Korea Index³		15.42%		23.59%		5.84%		3.62%		4.44%

GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT SINCE INCEPTION

LOGO

Korea Composite Stock Price Index performance data may be readjusted periodically by the Korea Exchange due to certain factors, including the declaration of dividends. It is not possible to invest directly in an index. Source: Index data from Korea Composite Stock Price Index and Bloomberg; total return calculations performed by BNY Mellon Investment Servicing (US) Inc. Please see page 39 for index definition.


				matthewsasia.com \| 833.228.5605			33



TOP TEN HOLDINGS⁴
Name	Sector	% Net Assets
Samsung Electronics Co., Ltd., Pfd.	Information Technology		13.1%
SK Hynix, Inc.	Information Technology		6.3%
Samsung Electronics Co., Ltd.	Information Technology		5.0%
Samsung SDI Co., Ltd.	Information Technology		3.9%
NAVER Corp.	Communication Services		3.6%
BGF Retail Co., Ltd.	Consumer Staples		3.5%
S-Oil Corp.	Energy		3.3%
KT&G Corp.	Consumer Staples		3.1%
Hyundai Mobis Co., Ltd.	Consumer Discretionary⁵		2.9%
Samsung Fire & Marine Insurance Co., Ltd.	Financials		2.9%
% OF ASSETS IN TOP 10			47.6%

Holdings may combine more than one security from same issuer and related depositary receipts.



COUNTRY ALLOCATION (%)⁵
South Korea			93.6
Cash and Other Assets, Less Liabilities			6.4



SECTOR ALLOCATION (%)⁵
Information Technology			38.0
Consumer Discretionary			10.8
Consumer Staples			9.4
Communication Services			8.6
Financials			7.3
Health Care			6.2
Industrials			5.6
Materials			4.4
Energy			3.3
Cash and Other Assets, Less Liabilities			6.4



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			43.9
Large Cap ($10B-$25B)			9.4
Mid Cap ($3B-10B)			20.5
Small Cap (under $3B)			19.9
Cash and Other Assets, Less Liabilities			6.4

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.


34		Matthews Korea Active ETF

Matthews Korea Active ETF

December 31, 2023

Schedule of Investments

COMMON EQUITIES: 80.5%


	Shares		Value

INFORMATION TECHNOLOGY: 24.9%
Semiconductors & Semiconductor Equipment: 12.6%
SK Hynix, Inc.		38,406		$4,219,620

KoMiCo., Ltd.		28,645		1,434,586

Eugene Technology Co., Ltd.		44,956		1,424,183

LEENO Industrial, Inc.		5,605		881,289

HPSP Co., Ltd.		14,089		479,698

				8,439,376


Electronic Equipment, Instruments & Components: 7.3%
Samsung SDI Co., Ltd.		7,213		2,643,479

Park Systems Corp.		11,177		1,505,714

Samsung Electro-Mechanics Co., Ltd.		6,275		746,432

				4,895,625

Technology Hardware, Storage & Peripherals: 5.0%
Samsung Electronics Co., Ltd.		55,089		3,357,781

Total Information Technology				16,692,782



CONSUMER DISCRETIONARY: 10.8%
Automobiles: 5.5%
Kia Corp.		24,670		1,915,521

Hyundai Motor Co.		11,179		1,766,385

				3,681,906


Automobile Components: 3.4%
Hyundai Mobis Co., Ltd.		10,674		1,964,235

HL Mando Co., Ltd.		11,319		345,836

				2,310,071


Broadline Retail: 1.9%
Coupang, Inc.^a		79,798		1,291,930

Total Consumer Discretionary				7,283,907



CONSUMER STAPLES: 9.4%
Consumer Staples Distribution & Retail: 3.5%
BGF Retail Co., Ltd.		22,789		2,323,314


Tobacco: 3.1%
KT&G Corp.		31,283		2,110,795


Food Products: 2.8%
Orion Corp.		21,030		1,895,786

Total Consumer Staples				6,329,895



COMMUNICATION SERVICES: 8.6%
Interactive Media & Services: 4.9%
NAVER Corp.		13,819		2,403,491

Kakao Corp.		21,539		908,120

				3,311,611

Wireless Telecommunication Services: 2.0%
SK Telecom Co., Ltd.		33,655		1,309,197


Diversified Telecommunication Services: 1.7%
KINX, Inc.		14,964		1,158,406

Total Communication Services				5,779,214



FINANCIALS: 7.3%
Insurance: 2.9%
Samsung Fire & Marine Insurance Co., Ltd.		9,566		1,953,458


	Shares		Value
Capital Markets: 2.2%
Macquarie Korea Infrastructure Fund		153,319		$1,480,929


Banks: 2.2%
KB Financial Group, Inc.		35,095		1,474,213

Total Financials				4,908,600



HEALTH CARE: 6.2%
Life Sciences Tools & Services: 2.8%
Samsung Biologics Co., Ltd.^a,b,c		3,183		1,878,314


Pharmaceuticals: 1.9%
Yuhan Corp.		24,458		1,306,554


Health Care Equipment & Supplies: 1.5%
InBody Co., Ltd.		50,579		995,557

Total Health Care				4,180,425



INDUSTRIALS: 5.6%
Construction & Engineering: 2.4%
Samsung Engineering Co., Ltd.^a		72,760		1,638,357


Machinery: 2.1%
Hyundai Mipo Dockyard Co., Ltd.		21,043		1,387,181


Marine Transportation: 1.1%
Pan Ocean Co., Ltd.		256,269		743,198

Total Industrials				3,768,736



MATERIALS: 4.4%
Chemicals: 2.7%
LG Chem, Ltd.		2,969		1,150,346

PI Advanced Materials Co., Ltd.		28,566		676,499

				1,826,845


Metals & Mining: 1.7%
Korea Zinc Co., Ltd.		2,848		1,101,253

Total Materials				2,928,098



ENERGY: 3.3%
Oil, Gas & Consumable Fuels: 3.3%
S-Oil Corp.		40,697		2,199,325

Total Energy				2,199,325



TOTAL COMMON EQUITIES				54,070,982

(Cost $48,809,246)



PREFERRED EQUITIES: 13.1%

INFORMATION TECHNOLOGY: 13.1%
Technology Hardware, Storage & Peripherals: 13.1%
Samsung Electronics Co., Ltd., Pfd.		182,506		8,828,421

Total Information Technology				8,828,421



TOTAL PREFERRED EQUITIES				8,828,421

(Cost $5,655,001)


				matthewsasia.com \| 833.228.5605			35

Matthews Korea Active ETF

December 31, 2023

Schedule of Investments (continued)

SHORT-TERM INVESTMENTS: 5.2%


	Shares		Value

MONEY MARKET FUNDS: 5.2%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^d		3,455,324		$3,455,324

(Cost $3,455,324)


TOTAL INVESTMENTS: 98.8%				66,354,727
(Cost $57,919,571)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.2%				815,890


NET ASSETS: 100.0%				$67,170,617

a	Non-income producing security.

c	The securities may be resold to qualified foreign investors and foreign institutional buyers under Regulation S of the Securities Act of 1933.

d	Rate shown is the current yield as of December 31, 2023.

Pfd.

Preferred

See accompanying notes to financial statements.


36		Matthews Korea Active ETF

LOGO


PORTFOLIO MANAGERS

Robert Horrocks, PhD		Kenneth Lowe, CFA
Lead Manager		Lead Manager

Siddarth Bhargava		Winnie Chwang
Co-Manager		Co-Manager

Elli Lee
Co-Manager

FUND FACTS

Ticker		ADVE
CUSIP		577130586
Inception Date		09/21/23
Gross Expense Ratio		0.79%
NAV (as of 12/31/23)		$31.63
Market Price (as of 12/31/23)		$31.69
# of Positions		53
Net Assets		$1.6 million
Portfolio Turnover		5.82%
Weight Average Market Cap		$79.3 billion
Benchmark
MSCI AC Asia Pacific Index

OBJECTIVE

Total return with an emphasis on providing current income.

STRATEGY

Under normal circumstances, the 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. Asia consists of all countries and markets in Asia, and includes developed, emerging and frontier countries and markets in the Asian region. The Fund may also invest in convertible debt and equity securities of companies located in Asia.

3	Holdings may combine more than one security from same issuer and related depositary receipts.

4	Not all countries where the Fund may invest are included in the benchmark index.

5	Source: FactSet Research Systems. Percentage values in data are rounded to the nearest tenth of one percent, so the values may not sum to 100% due to rounding. Country allocations and percentage values may be derived from different data sources and may not be consistent with other Fund literature.

Matthews Asia Dividend Active ETF (unaudited)



PERFORMANCE AS OF DECEMBER 31, 2023
			Actual Return, Not Annualized
	3 months		Since Inception		Inception date
Asia Dividend Active ETF (NAV)¹		6.76%		5.83%		09/21/23
Asia Dividend Active ETF (market price)		6.96%		6.03%
MSCI AC Asia Pacific Index²		8.00%		6.91%



TOP TEN HOLDINGS³
Name	Sector	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. ADR	Information Technology	Taiwan		4.6%
Keyence Corp.	Information Technology	Japan		2.8%
HDFC Bank, Ltd. ADR	Financials	India		2.7%
ITOCHU Corp.	Industrials	Japan		2.6%
PT Bank Rakyat Indonesia Persero Tbk	Financials	Indonesia		2.4%
Samsung Electronics Co., Ltd.	Information Technology	South Korea		2.4%
ORIX Corp.	Financials	Japan		2.3%
Tokio Marine Holdings, Inc.	Financials	Japan		2.2%
AIA Group, Ltd.	Financials	Hong Kong		2.2%
Suzuki Motor Corp.	Consumer Discretionary	Japan		2.2%
% OF ASSETS IN TOP 10				26.4%



COUNTRY ALLOCATION (%)^4,5
Japan			31.2
China/Hong Kong			25.1
Australia			9.8
Taiwan			8.5
India			8.2
South Korea			6.2
Singapore			3.4
Indonesia			2.4
Thailand			1.6
Vietnam			1.4
Cash and Other Assets, Less Liabilities			2.1



SECTOR ALLOCATION (%)⁵
Financials			19.3
Information Technology			18.3
Consumer Discretionary			13.5
Communication Services			10.3
Consumer Staples			10.3
Industrials			9.2
Real Estate			4.8
Materials			3.6
Health Care			3.4
Utilities			3.3
Energy			1.9
Cash and Other Assets, Less Liabilities			2.1



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			50.9
Large Cap ($10B-$25B)			20.0
Mid Cap ($3B-10B)			17.2
Small Cap (under $3B)			9.9
Cash and Other Assets, Less Liabilities			2.1


				matthewsasia.com \| 833.228.5605			37

Matthews Asia Dividend Active ETF

December 31, 2023

Schedule of Investments^a

COMMON EQUITIES: 97.9%


	Shares		Value

JAPAN: 31.2%
Keyence Corp.		100		$44,063

ITOCHU Corp.		1,000		40,907

ORIX Corp.		1,900		35,795

Tokio Marine Holdings, Inc.		1,400		35,045

Suzuki Motor Corp.		800		34,235

Shin-Etsu Chemical Co., Ltd.		800		33,576

Nissin Foods Holdings Co., Ltd.		900		31,415

Ajinomoto Co., Inc.		700		27,011

Capcom Co., Ltd.		800		25,853

KDDI Corp.		800		25,456

GLP J-Reit		25		24,915

Disco Corp.		100		24,812

Bandai Namco Holdings, Inc.		1,200		24,059

Kakaku.com, Inc.		1,900		23,531

Nomura Research Institute, Ltd.		800		23,271

Toray Industries, Inc.		4,400		22,880

Hikari Tsushin, Inc.		100		16,584

Total Japan				493,408



CHINA/HONG KONG: 25.1%
AIA Group, Ltd.		4,000		34,859

Tencent Holdings, Ltd.		900		33,840

Inner Mongolia Yili Industrial Group Co., Ltd. A Shares		8,700		32,683

Midea Group Co., Ltd. A Shares		4,000		30,811

NARI Technology Co., Ltd. A Shares		9,100		28,525

Link REIT		4,900		27,517

NetEase, Inc.		1,500		27,009

Wuliangye Yibin Co., Ltd. A Shares		1,300		25,616

Yum China Holdings, Inc.		595		25,246

JD.com, Inc. Class A		1,700		24,492

Minth Group, Ltd.		12,000		24,250

Techtronic Industries Co., Ltd.		2,000		23,833

Guangdong Investment, Ltd.		32,000		23,277

Yuexiu Transport Infrastructure, Ltd.		40,000		21,771

Milkyway Chemical Supply Chain Service Co., Ltd. A Shares		1,800		13,451

Total China/Hong Kong				397,180



AUSTRALIA: 9.9%
Ampol, Ltd.		1,216		29,995

CSL, Ltd.		153		29,926

Breville Group, Ltd.		1,370		25,455

Lottery Corp., Ltd.		7,598		25,093

AUB Group, Ltd.		1,273		24,104

Treasury Wine Estates, Ltd.		2,852		20,979

Total Australia				155,552



TAIWAN: 8.5%
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		700		72,800

Chailease Holding Co., Ltd.		5,000		31,443

Delta Electronics, Inc.		3,000		30,645

Total Taiwan				134,888


	Shares		Value

INDIA: 8.2%
HDFC Bank, Ltd. ADR		633		$42,481
Tata Consultancy Services, Ltd.		721		32,868

Power Grid Corp. of India, Ltd.		10,360		29,531

Hindustan Unilever, Ltd.		786		25,162

Total India				130,042



SOUTH KOREA: 6.2%
Samsung Electronics Co., Ltd.		628		38,278

Macquarie Korea Infrastructure Fund		3,446		33,285

SK Telecom Co., Ltd. ADR		1,259		26,943

Total South Korea				98,506



SINGAPORE: 3.4%
United Overseas Bank, Ltd.		1,400		30,195

Capitaland India Trust		26,900		23,247

Total Singapore				53,442



INDONESIA: 2.4%
PT Bank Rakyat Indonesia Persero Tbk		103,300		38,410

Total Indonesia				38,410



THAILAND: 1.6%
Bangkok Dusit Medical Services Public Co., Ltd. F Shares		30,500		24,595

Total Thailand				24,595



VIETNAM: 1.4%
FPT Corp.		5,600		22,181

Total Vietnam				22,181



TOTAL COMMON EQUITIES				1,548,204

(Cost $1,464,701)


SHORT-TERM INVESTMENTS: 1.9%

MONEY MARKET FUNDS: 1.9%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.25%^b		30,049		30,049

(Cost $30,049)


TOTAL INVESTMENTS: 99.8%				1,578,253
(Cost $1,494,750)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.2%				3,438



NET ASSETS: 100.0%				$1,581,691

a	Certain securities were fair valued under the valuation policies approved by the Board of Trustees (Note 2-A).

b	Rate shown is the current yield as of December 31, 2023.

ADR	American Depositary Receipt

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


38		Matthews Asia Dividend Active ETF

Index Definitions

The MSCI Emerging Markets Index is a free float-adjusted market capitalization-weighted index of the stock markets of Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI Emerging Markets ex China Index is a free float-adjusted market capitalization-weighted index that captures large and mid cap representation across 23 of the 24 Emerging Markets (EM) countries excluding China: Brazil, Chile, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Kuwait, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Saudi Arabia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.

The MSCI All Country Asia ex Japan Index is a free float– adjusted market capitalization-weighted index of the stock markets of China, Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand.

The MSCI China Index is a free float–adjusted market capitalization-weighted index of Chinese equities that includes H shares listed on the Hong Kong exchange, B shares listed on

the Shanghai and Shenzhen ex-exchanges, and Hong Kong-listed securities known as Red Chips (issued by entities owned by national or local governments in China) and P Chips (issued by companies controlled by individuals in China and deriving substantial revenues in China), and foreign listings (e.g., ADRs).

The S&P Bombay Stock Exchange 100 (S&P BSE 100) Index is a free float–adjusted market capitalization–weighted index of 100 stocks listed on the Bombay Stock Exchange.

The MSCI India Index is a free float-adjusted market capitalization-weighted index of Indian equities listed in India.

The MSCI Japan Index is a free float–adjusted market capitalization–weighted index of Japanese equities listed in Japan.

The Korea Composite Stock Price Index (KOSPI) is a market capitalization-weighted index of all common stocks listed on the Korea Stock Exchange.

The MSCI Korea Index is a free float-adjusted market capitalization-weighted index of Korean equities listed in Korea.


				matthewsasia.com \| 833.228.5605			39

Disclosures

to portfolio securities held during the most recent 12-month period ended June 30, is available upon request, at no charge, at the Funds’ website at matthewsasia.com or by calling 833.228.5605, or on the SEC’s website at www.sec.gov.

Disclosure of Fund Expenses (unaudited)

We believe it is important for you to understand the impact of fees regarding your investment. All ETFs have operating expenses. As a shareholder of an ETF, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund’s gross income, directly reduce the investment return of the fund. A fund’s operating expenses are expressed as a percentage of its average net assets. This figure is known as the expense ratio. The following examples are intended to help you understand the ongoing fees (in dollars) of investing in your fund and to compare these costs with those of other ETFs. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period.

This table illustrates your fund’s costs in two ways:

$8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your fund in the first line under the heading entitled “Operating Expenses Paid During Period.”

Hypothetical 5% Return: This section is intended to help you compare your fund’s costs with those of other ETFs. It assumes that the fund had an annual return of 5% before operating expenses, but that the expense ratio is unchanged. In this case, because the return used is not the fund’s actual return, the results do not apply to your investment. This example is useful in making comparisons to other ETFs because the Securities and Exchange Commission requires all registered funds to calculate expenses based on an assumed 5% annual return. You can assess your fund’s costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.

Please note that the operating expenses shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transactional costs. You may pay brokerage commissions on your purchases and sales of fund shares, which are not reflected in the table.


40		MATTHEWS ASIA FUNDS

December 31, 2023

Disclosure of Fund Expenses (unaudited) (continued)



	Beginning Account Value 7/1/23		Ending Account Value 12/31/23		Expense Ratio		Operating Expenses Paid During Period 7/1/23– 12/31/23¹

Matthews Emerging Markets Equity Active ETF
Actual Fund Return		$1,000.00		$1,022.20		0.79%		$4.03
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Emerging Markets ex China Active ETF
Actual Fund Return		$1,000.00		$1,053.20		0.79%		$4.09
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Emerging Markets Sustainable Future Active ETF²
Actual Fund Return		$1,000.00		$1,029.80		0.79%		$2.22
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Pacific Tiger Active ETF²
Actual Fund Return		$1,000.00		$1,014.40		0.79%		$2.20
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Asia Innovators Active ETF
Actual Fund Return		$1,000.00		$1,010.50		0.79%		$4.00
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews China Active ETF
Actual Fund Return		$1,000.00		$934.80		0.79%		$3.85
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews India Active ETF²
Actual Fund Return		$1,000.00		$1,080.00		0.79%		$2.27
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Japan Active ETF²
Actual Fund Return		$1,000.00		$1,057.90		0.79%		$2.25
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02
Matthews Korea Active ETF
Actual Fund Return		$1,000.00		$1,057.50		0.84%		$4.36
Hypothetical 5% Returns		$1,000.00		$1,020.97		0.84%		$4.28
Matthews Asia Dividend Active ETF²
Actual Fund Return		$1,000.00		$1,058.30		0.79%		$2.25
Hypothetical 5% Returns		$1,000.00		$1,021.22		0.79%		$4.02

1	Operating expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 184 days, then divided by 365.

The Fund commenced operations on September 21, 2023. Operating expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 101 days, then divided by 365. The hypothetical expense example is based on the half-year period beginning July 1, 2023, as required by the SEC.


				matthewsasia.com \| 833.228.5605			41

Statements of Assets and Liabilities

December 31, 2023


	Matthews Emerging Markets Equity Active ETF		Matthews Emerging Markets ex China Active ETF		Matthews Emerging Markets Sustainable Future Active ETF		Matthews Pacific Tiger Active ETF

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$55,493,230		$8,812,806		$14,173,612		$83,393,180

Cash		399,606		19,969		39		19,118

Segregated foreign currency at value		159,335		—		5,238		53

Foreign currency at value (B)		20,612		11		3		936,687

Dividends and interest receivable		95,727		18,429		5,398		89,948

Receivable for securities sold		—		—		—		946,556

Receivable for capital shares sold		1,508		—		—		11,186

Other receivable		30,027		1,033		—		—
TOTAL ASSETS		56,200,045		8,852,248		14,184,290		85,396,728

LIABILITIES:

Payable for securities purchased		186,681		—		—		5,448,769

Deferred foreign capital gains tax liability (Note 2-C)		70,495		14,334		22,457		118,545

Due to Advisor (Note 4)		35,856		5,780		7,234		39,796

Accrued other expenses payable		—		845		—		467
TOTAL LIABILITIES		293,032		20,959		29,691		5,607,577

NET ASSETS		$55,907,013		$8,831,289		$14,154,599		$79,789,151

SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)		1,980,000		320,000		550,000		3,150,000

Net asset value, offering price and redemption price		28.24		27.60		25.74		25.33

NET ASSETS CONSISTS OF:

Capital paid-in		$54,698,406		$8,191,671		$13,578,322		$77,678,654

Total distributable earnings/(accumulated loss)		1,208,607		639,618		576,277		2,110,497
NET ASSETS		$55,907,013		$8,831,289		$14,154,599		$79,789,151

(A) Investments at cost:

Unaffiliated Issuers		$52,473,588		$7,991,444		$13,549,125		$80,395,476

(B) Foreign Currency at Cost		$20,611		$11		$3		$936,688

See accompanying notes to financial statements.


42		MATTHEWS ASIA FUNDS

Statements of Assets and Liabilities (continued)

December 31, 2023


	Matthews Asia Innovators Active ETF			Matthews China Active ETF			Matthews India Active ETF

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$83,595,032			$21,719,520			$5,983,096

Cash		68,525			24			—

Segregated foreign currency at value		2,341			94			—

Foreign currency at value (B)		1,245			—			61,462

Dividends and interest receivable		105,047			31,536			126

Receivable for securities sold		6,221,332			—			—

Other receivable		2,728			421			—
TOTAL ASSETS		89,996,250			21,751,595			6,044,684

LIABILITIES:

Cash overdraft		—			—			11,816

Payable for securities purchased		4,801,837			4			—

Deferred foreign capital gains tax liability (Note 2-C)		322,955			—			89,031

Due to Advisor (Note 4)		56,009			14,391			3,924

Accrued other expenses payable		6,046			—			—
TOTAL LIABILITIES		5,186,847			14,395			104,771

NET ASSETS		$84,809,403			$21,737,200			$5,939,913

SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)		3,600,000			1,140,000			220,000

Net asset value, offering price and redemption price		23.56			19.07			27.00

NET ASSETS CONSISTS OF:

Capital paid-in		$94,719,839			$30,738,744			$5,563,942

Total distributable earnings/(accumulated loss)		(9,910,436	)		(9,001,544	)		375,971
NET ASSETS		$84,809,403			$21,737,200			$5,939,913

(A) Investments at cost:

Unaffiliated Issuers		$71,395,881			$28,283,100			$5,499,236

(B) Foreign Currency at Cost		$1,245			$—			$61,462

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			43

Statements of Assets and Liabilities (continued)

December 31, 2023


	Matthews Japan Active ETF		Matthews Korea Active ETF			Matthews Asia Dividend Active ETF

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$1,052,495		$66,354,727			$1,578,253

Cash		—		41,361			2,167

Segregated foreign currency at value		—		—			2,344

Foreign currency at value (B)		—		—			816

Dividends and interest receivable		401		808,713			1,458

Receivable for securities sold		—		517,537			—

Receivable for capital shares sold		—		4,064			—

Other receivable		313		8,099			163
TOTAL ASSETS		1,053,209		67,734,501			1,585,201

LIABILITIES:

Payable for securities purchased		—		479,369			1,049

Deferred foreign capital gains tax liability (Note 2-C)		—		—			1,432

Due to Advisor (Note 4)		688		43,154			1,029

Other liabilities		—		41,361			—
TOTAL LIABILITIES		688		563,884			3,510

NET ASSETS		$1,052,521		$67,170,617			$1,581,691

SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)		40,000		2,553,223	¹		50,000

Net asset value, offering price and redemption price		26.31		26.31			31.63

NET ASSETS CONSISTS OF:

Capital paid-in		$1,000,000		$57,782,663			$1,500,000

Total distributable earnings/(accumulated loss)		52,521		9,387,954			81,691
NET ASSETS		$1,052,521		$67,170,617			$1,581,691

(A) Investments at cost:

Unaffiliated Issuers		$975,593		$57,919,571			$1,494,750

(B) Foreign Currency at Cost		$—		$—			$816

See accompanying notes to financial statements.


44		MATTHEWS ASIA FUNDS

Statements of Operations

Period Ended December 31, 2023


	Matthews Emerging Markets Equity Active ETF			Matthews Emerging Markets ex China Active ETF¹			Matthews Emerging Markets Sustainable Future Active ETF²			Matthews Pacific Tiger Active ETF²

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$1,125,766			$146,415			$13,779			$119,615

Interest		26,630			5,037			1,531			40,832

Foreign withholding tax		(95,855	)		(14,270	)		(2,165	)		(17,203	)
TOTAL INVESTMENT INCOME		1,056,541			137,182			13,145			143,244

EXPENSES:

Investment advisory fees (Note 4)		343,630			41,746			12,124			71,197

Other expenses		108			—			—			—
TOTAL EXPENSES		343,738			41,746			12,124			71,197

NET INVESTMENT INCOME (LOSS)		712,803			95,436			1,021			72,047

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(1,663,985	)		(156,823	)		(1,183	)		(775,477	)

Net realized gain (loss) on in-kind redemptions—Unaffiliated Issuers		316,892			—			—			—

Net realized gain (loss) on foreign currency related transactions		(1,155,971	)		(5,929	)		(22,526	)		(5,805	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		2,995,674			821,362			624,487			2,997,704

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		(70,322	)		(14,334	)		(22,457	)		(118,544	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		2,588			140			48			(869	)
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		424,876			644,416			578,369			2,097,009

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$1,137,679			$739,852			$579,390			$2,169,056

1	The Fund commenced operations on January 10, 2023.

2	The Fund commenced operations on September 21, 2023.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			45

Statements of Operations (continued)

Period Ended December 31, 2023


	Matthews Asia Innovators Active ETF			Matthews China Active ETF			Matthews India Active ETF¹

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$1,499,531			$580,422			$4,188

Interest		95,048			25,302			460

Foreign withholding tax		(179,932	)		(42,630	)		(998	)
TOTAL INVESTMENT INCOME		1,414,647			563,094			3,650

EXPENSES:

Investment advisory fees (Note 4)		950,400			229,548			6,902

NET INVESTMENT INCOME (LOSS)		464,247			333,546			(3,252	)

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(19,889,407	)		(2,385,266	)		(6,588	)

Net realized gain (loss) on in-kind redemptions—Unaffiliated Issuers		2,501,220			(195,202	)		—

Net realized gain (loss) on foreign currency related transactions		(278,659	)		(8,258	)		(9,018	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		9,905,585			(7,009,584	)		483,860

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		(326,321	)		—			(89,031	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		(1,996	)		(570	)		—
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		(8,089,578	)		(9,598,880	)		379,223

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		($7,625,331	)		($9,265,334	)		$375,971

1	The Fund commenced operations on September 21, 2023.

See accompanying notes to financial statements.


46		MATTHEWS ASIA FUNDS

Statements of Operations (continued)

Period Ended December 31, 2023


	Matthews Japan Active ETF¹			Matthews Korea Active ETF²			Matthews Asia Dividend Active ETF¹

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$7,819			$1,475,836			$9,333

Interest		872			79,071			1,046

Foreign withholding tax		(902	)		(228,323	)		(1,110	)
TOTAL INVESTMENT INCOME		7,789			1,326,584			9,269

EXPENSES:

Investment advisory fees (Note 4)		2,153			502,279			3,272

Administration and accounting fees (Note 4)		—			3,124			—

Administration and shareholder servicing fees (Note 4)		—			66,964			—

Accounting out-of-pocket fees		—			16,254			—

Custodian fees		—			24,399			—

Printing fees		—			17,240			—

Intermediary service fees (Note 4)		—			34,044			—

Professional fees		—			24,364			—

Registration fees		—			36,123			—

Transfer agent fees		—			17,667			—

Trustee fees		—			7,280			—

Other expenses		—			30,147			—
TOTAL EXPENSES		2,153			779,885			3,272

NET INVESTMENT INCOME (LOSS)		5,636			546,699			5,997

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(24,334	)		5,109,934			353

Net realized gain (loss) on in-kind redemptions—Unaffiliated Issuers		—			21,103			—

Net realized gain (loss) on foreign currency related transactions		(317	)		(8,632	)		(993	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		76,902			4,454,389			83,503

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		—			—			(1,433	)

Net change in unrealized appreciation/depreciation on foreign currency related translations		12			(2,020	)		82
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		52,263			9,574,774			81,512

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$57,899			$10,121,473			$87,509

1	The Fund commenced operations on September 21, 2023.

The Matthews Korea Active ETF acquired all assets and liabilities of the Matthews Korea Fund (the “Predecessor Fund”) in a reorganization that occurred on July 14, 2023. The performance and financial history of the Predecessor Fund’s Institutional Class have been adopted by the Matthews Korea Active ETF. As a result, the information prior to July 14, 2023 reflects that of the Predecessor Fund. The Predecessor Fund ceased operations as of the date of the reorganization. (See Note 1).

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			47

Statements of Changes in Net Assets


MATTHEWS EMERGING MARKETS EQUITY ACTIVE ETF	Year Ended December 31, 2023			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$712,803			$31,792

Net realized gain (loss) on investments, in-kind redemptions and foreign currency related transactions		(2,503,064	)		(47,523	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		2,998,262			23,964

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(70,322	)		(173	)
Net increase (decrease) in net assets resulting from operations		1,137,679			8,060

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions		(5,917	)		(28,090	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		48,471,365			6,323,916
Total increase (decrease) in net assets		49,603,127			6,303,886
NET ASSETS:

Beginning of period		6,303,886			—
End of period		$55,907,013			$6,303,886

1 The Fund commenced operations on July 13, 2022.

MATTHEWS EMERGING MARKETS EX CHINA ACTIVE ETF				For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)					$95,436

Net realized gain (loss) on investments and foreign currency related transactions					(162,752	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations					821,502

Net change on foreign capital gains taxes on unrealized appreciation/depreciation					(14,334	)
Net increase (decrease) in net assets resulting from operations					739,852

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions					(100,234	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)					8,191,671
Total increase (decrease) in net assets					8,831,289
NET ASSETS:

Beginning of period					—
End of period					$8,831,289

1 The Fund commenced operations on January 10, 2023.

MATTHEWS EMERGING MARKETS SUSTAINABLE FUTURE ACTIVE ETF				For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)					$1,021

Net realized gain (loss) on investments and foreign currency related transactions					(23,709	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations					624,535

Net change on foreign capital gains taxes on unrealized appreciation/depreciation					(22,457	)
Net increase (decrease) in net assets resulting from operations					579,390

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions					(3,113	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)					13,578,322
Total increase (decrease) in net assets					14,154,599
NET ASSETS:

Beginning of period					—
End of period					$14,154,599

1	The Fund commenced operations on September 21, 2023.

See accompanying notes to financial statements.


48		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (continued)


MATTHEWS PACIFIC TIGER ACTIVE ETF				For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)					$72,047

Net realized gain (loss) on investments and foreign currency related transactions					(781,282	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations					2,996,835

Net change on foreign capital gains taxes on unrealized appreciation/depreciation					(118,544	)
Net increase (decrease) in net assets resulting from operations					2,169,056

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions					(58,559	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)					77,678,654
Total increase (decrease) in net assets					79,789,151
NET ASSETS:

Beginning of period					—
End of period					$79,789,151

1 The Fund commenced operations on September 21, 2023.

MATTHEWS ASIA INNOVATORS ACTIVE ETF	Year Ended December 31, 2023			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$464,247			($34,351	)

Net realized gain (loss) on investments and foreign currency related transactions		(17,666,846	)		(1,392,598	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		9,903,589			2,293,574

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(326,321	)		—
Net increase (decrease) in net assets resulting from operations		(7,625,331	)		866,625

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions		(841,608	)		—
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(12,162,685	)		104,572,402
Total increase (decrease) in net assets		(20,629,624	)		105,439,027
NET ASSETS:

Beginning of period		105,439,027			—
End of period		$84,809,403			$105,439,027

1 The Fund commenced operations on July 13, 2022.

MATTHEWS CHINA ACTIVE ETF	Year Ended December 31, 2023			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$333,546			($4,643	)

Net realized gain (loss) on investments and foreign currency related transactions		(2,588,726	)		(47,731	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(7,010,154	)		446,556
Net increase (decrease) in net assets resulting from operations		(9,265,334	)		394,182

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions		(350,744	)		—
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		21,254,398			9,704,698
Total increase (decrease) in net assets		11,638,320			10,098,880
NET ASSETS:

Beginning of period		10,098,880			—
End of period		$21,737,200			$10,098,880

1	The Fund commenced operations on July 13, 2022.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			49

Statements of Changes in Net Assets (continued)


MATTHEWS INDIA ACTIVE ETF				For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)					($3,252	)

Net realized gain (loss) on investments and foreign currency related transactions					(15,606	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations					483,860

Net change on foreign capital gains taxes on unrealized appreciation/depreciation					(89,031	)
Net increase (decrease) in net assets resulting from operations					375,971
CAPITAL SHARE TRANSACTIONS (net) (Note 3)					5,563,942
Total increase (decrease) in net assets					5,939,913
NET ASSETS:

Beginning of period					—
End of period					$5,939,913

1 The Fund commenced operations on September 21, 2023.

MATTHEWS JAPAN ACTIVE ETF				For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)					$5,636

Net realized gain (loss) on investments and foreign currency related transactions					(24,651	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations					76,914
Net increase (decrease) in net assets resulting from operations					57,899

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions					(5,378	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)					1,000,000
Total increase (decrease) in net assets					1,052,521
NET ASSETS:

Beginning of period					—
End of period					$1,052,521

1 The Fund commenced operations on September 21, 2023.

MATTHEWS KOREA ACTIVE ETF¹	Year Ended December 31, 2023			Year Ended December 31, 2022

OPERATIONS:

Net investment income (loss)		$546,699			$1,080,067

Net realized gain (loss) on investments and foreign currency related transactions		5,122,405			(3,280,646	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		4,452,369			(31,168,278	)
Net increase (decrease) in net assets resulting from operations		10,121,473			(33,368,857	)

DISTRIBUTIONS TO SHAREHOLDERS:

Investor Class		—			(7,639,996	)

Institutional Class/Fund		(1,077,132	)		(968,596	)
Net decrease in net assets resulting from distributions		(1,077,132	)		(8,608,592	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		(21,896,480	)		(10,938,083	)
Total increase (decrease) in net assets		(12,852,139	)		(52,915,532	)
NET ASSETS:

Beginning of period		80,022,756			132,938,288
End of period		$67,170,617			$80,022,756

See accompanying notes to financial statements.


50		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (continued)


MATTHEWS ASIA DIVIDEND ACTIVE ETF	For the Period Ended December 31, 2023¹

OPERATIONS:

Net investment income (loss)		$5,997

Net realized gain (loss) on investments and foreign currency related transactions		(640	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		83,585

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(1,433	)
Net increase (decrease) in net assets resulting from operations		87,509

DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions		(5,818	)
CAPITAL SHARE TRANSACTIONS (net) (Note 3)		1,500,000
Total increase (decrease) in net assets		1,581,691
NET ASSETS:

Beginning of period		—
End of period		$1,581,691

1	The Fund commenced operations on September 21, 2023.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			51

Financial Highlights

Matthews Emerging Markets Equity Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31, 2023			Period Ended Dec. 31, 2022¹
Net Asset Value, beginning of Period		$26.27			$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.44			0.23
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		1.53			1.18
Total from investment operations		1.97			1.41
LESS DISTRIBUTIONS FROM:
Net investment income		—	³		(0.14	)
Net Asset Value, end of Period		$28.24			$26.27
TOTAL RETURN		7.51%			5.63%	⁴

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$55,907			$6,304
Ratio of expenses to average net assets (Note 4)		0.79%			0.79%	⁵
Ratio of net investment income (loss) to average net assets		1.64%			1.93%	⁵
Portfolio turnover		54.86%			15.47%	⁴

1	The Fund commenced operations on July 13, 2022.

2	Calculated using the average daily shares method.

3	Less than $0.01 per share.

4	Not annualized.

5	Annualized.

See accompanying notes to financial statements.


52		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Emerging Markets ex China Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.45
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		2.46
Total from investment operations		2.91
LESS DISTRIBUTIONS FROM:
Net investment income		(0.31	)
Net Asset Value, end of Period		$27.60
TOTAL RETURN		11.68%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$8,831
Ratio of expenses to average net assets (Note 4)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		1.81%	⁴
Portfolio turnover		28.64%	³

1	The Fund commenced operations on January 10, 2023.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			53

Financial Highlights (continued)

Matthews Emerging Markets Sustainable Future Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		—	³
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		0.75
Total from investment operations		0.75
LESS DISTRIBUTIONS FROM:
Net investment income		(0.01	)
Net Asset Value, end of Period		$25.74
TOTAL RETURN		2.98%	⁴

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$14,155
Ratio of expenses to average net assets (Note 4)		0.79%	⁵
Ratio of net investment income (loss) to average net assets		0.07%	⁵
Portfolio turnover		0.37%	⁴

1	The Fund commenced operations on September 21, 2023.

2	Calculated using the average daily shares method.

3	Less than $0.01 per share.

4	Not annualized.

5	Annualized.

See accompanying notes to financial statements.


54		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Pacific Tiger Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.05
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		0.31
Total from investment operations		0.36
LESS DISTRIBUTIONS FROM:
Net investment income		(0.03	)
Net Asset Value, end of Period		$25.33
TOTAL RETURN		1.44%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$79,789
Ratio of expenses to average net assets (Note 4)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		0.80%	⁴
Portfolio turnover		12.07%	³

1	The Fund commenced operations on September 21, 2023.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			55

Financial Highlights (continued)

Matthews Asia Innovators Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Year Ended Dec. 31, 2023			Period Ended Dec. 31, 2022¹
Net Asset Value, beginning of Period		$24.24			$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.09			(0.04	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(0.54	)		(0.72	)
Total from investment operations		(0.45	)		(0.76	)
LESS DISTRIBUTIONS FROM:
Net investment income		(0.23	)		—
Net Asset Value, end of Period		$23.56			$24.24
TOTAL RETURN		(1.83%	)		(3.04%	)³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$84,809			$105,439
Ratio of expenses to average net assets (Note 4)		0.79%			0.79%	⁴
Ratio of net investment income (loss) to average net assets		0.39%			(0.33%	)⁴
Portfolio turnover		277.86%			72.56%	³

1	The Fund commenced operations on July 13, 2022.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


56		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews China Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Year Ended Dec. 31, 2023			Period Ended Dec. 31, 2022¹
Net Asset Value, beginning of Period		$24.04			$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.25			(0.03	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(4.91	)		(0.93	)
Total from investment operations		(4.66	)		(0.96	)
LESS DISTRIBUTIONS FROM:
Net investment income		(0.31	)		—
Net Asset Value, end of Period		$19.07			$24.04
TOTAL RETURN		(19.35%	)		(3.84%	)³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$21,737			$10,099
Ratio of expenses to average net assets (Note 4)		0.79%			0.79%	⁴
Ratio of net investment income (loss) to average net assets		1.15%			(0.24%	)⁴
Portfolio turnover		58.98%			12.48%	³

1	The Fund commenced operations on July 13, 2022.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			57

Financial Highlights (continued)

Matthews India Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		(0.03	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		2.03
Total from investment operations		2.00
Net Asset Value, end of Period		$27.00
TOTAL RETURN		8.00%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$5,940
Ratio of expenses to average net assets (Note 4)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		(0.37%	)⁴
Portfolio turnover		14.97%	³

1	The Fund commenced operations on September 21, 2023.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


58		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Japan Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.14
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		1.30
Total from investment operations		1.44
LESS DISTRIBUTIONS FROM:
Net investment income		(0.13	)
Net Asset Value, end of Period		$26.31
TOTAL RETURN		5.79%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$1,053
Ratio of expenses to average net assets (Note 4)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		2.07%	⁴
Portfolio turnover		45.53%	³

1	The Fund commenced operations on September 21, 2023.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			59

Financial Highlights (continued)

Matthews Korea Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Year Ended Dec. 31, 2023^1,2			Year Ended Dec. 31, 2022²			Year Ended Dec. 31, 2021²			Year Ended Dec. 31, 2020²			Year Ended Dec. 31, 2019²
Net Asset Value, beginning of Year		$23.18			$34.53			$37.05			$26.54			$27.68
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)³		0.55			0.36			0.36			0.06			0.06
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		3.00			(9.07	)		(0.42	)		10.75			1.02
Total from investment operations		3.55			(8.71	)		(0.06	)		10.81			1.08
LESS DISTRIBUTIONS FROM:
Net investment income		(0.42	)		—			(0.66	)		(0.30	)		—
Net realized gains on investments		—			(2.64	)		(1.80	)		—			(2.22	)
Total distributions		(0.42	)		(2.64	)		(2.46	)		(0.30	)		(2.22	)
Net Asset Value, end of Year		$26.31			$23.18			$34.53			$37.05			$26.54
TOTAL RETURN		15.41%			(25.39%	)		(0.16%	)		40.76%			4.01%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Year (in 000’s)		$67,171			$9,166			$14,998			$12,192			$23,426
Ratio of expenses to average net assets (Note 4)		0.88%			1.08%			0.98%			1.05%			1.05%
Ratio of net investment income (loss) to average net assets		2.26%			1.20%			0.93%			0.28%			0.29%
Portfolio turnover		31.75%			56.94%			40.18%			39.62%			36.63%

The Matthews Korea Active ETF acquired all assets and liabilities of the Matthews Korea Fund (the “Predecessor Fund”) in a reorganization that occurred on July 14, 2023. The performance and financial history of the Predecessor Fund’s Institutional Class have been adopted by the Matthews Korea Active ETF. As a result, the information prior to July 14, 2023 reflects that of the Predecessor Fund’s Institutional Class. The Predecessor Fund ceased operations as of the date of the reorganization. (See Note 1).

2	On June 23, 2023, the Predecessor Fund effected a reverse share split with a ratio of 1 : 0.166538 (old to new). All per share data has been adjusted to reflect the reverse share split.

3	Calculated using the average daily shares method.

See accompanying notes to financial statements.


60		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Asia Dividend Active ETF

The table below sets forth financial data for a share of beneficial interest outstanding throughout the period presented.


	Period Ended Dec. 31, 2023¹
Net Asset Value, beginning of Period		$30.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.12
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		1.63
Total from investment operations		1.75
LESS DISTRIBUTIONS FROM:
Net investment income		(0.12	)
Net Asset Value, end of Period		$31.63
TOTAL RETURN		5.83%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$1,582
Ratio of expenses to average net assets (Note 4)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		1.45%	⁴
Portfolio turnover		5.82%	³

1	The Fund commenced operations on September 21, 2023.

2	Calculated using the average daily shares method.

3	Not annualized.

4	Annualized.

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			61

Notes to Financial Statements

1.	ORGANIZATION

Matthews International Funds (d/b/a Matthews Asia Funds) (the “Trust”) is an open-end management investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). As of December 31, 2023, the Trust issued twenty-three separate series of shares. This shareholder report pertains to ten of those series (each a “Fund”, and collectively, the “Funds”): Matthews Emerging Markets Equity Active ETF, Mathews Emerging Markets ex China Active ETF, Matthews Emerging Markets Sustainable Future Active ETF, Matthews Pacific Tiger Active ETF, Matthews Asia Innovators Active ETF, Matthews China Active ETF, Matthews India Active ETF, Matthews Japan Active ETF, Matthews Korea Active ETF and Matthews Asia Dividend Active ETF. All of the Funds are considered diversified with the exception of Matthews Emerging Markets Sustainable Future Active ETF and Matthews India Active ETF, which are considered non-diversified. The other thirteen separate series of the Trust are mutual funds and are covered in a separate shareholder report.

The Funds issue and redeem shares at their net asset value per share (NAV) only in large blocks of shares (Creation Units). These transactions are usually in exchange for a basket of securities and/or an amount of cash. As a practical matter, only institutional investors who have entered into an authorized participant agreement may purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the Funds are not redeemable securities.

Individual shares of the Funds trade on national securities exchanges and elsewhere during the trading day and can only be bought and sold at market prices throughout the trading day through a broker-dealer. Because fund shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (premium) or less than NAV (discount). A chart showing the frequency at which each fund’s daily closing market price was at a discount or premium to each fund’s NAV can be found at www.matthewsasia.com.

Pursuant to an Agreement and Plan of Reorganization and Liquidation approved by the Board of Trustees of the Trust, the Matthews Korea Fund (the “Acquired Fund”) was reorganized into the Matthews Korea Active ETF (the “Acquiring Fund”) (the “Reorganization”) on July 14, 2023 (the “Closing Date”).

Following the Reorganization, the Acquired Fund’s Institutional Class performance and financial history were adopted by the Acquiring Fund. In connection with the Reorganization, each shareholder of the Acquired Fund received Acquiring Fund shares equal in value to the number of Acquired Fund shares owned on the Closing Date, including a cash payment in lieu of fractional Acquiring Fund shares. The Acquiring Fund has the same investment advisor, investment objective and fundamental investment policies, and a substantially similar investment strategy, as the Acquired Fund. Effective as of the Closing Date, the Acquired Fund ceased operations.

Costs incurred by the Acquiring Fund and the Acquired Fund associated with the Reorganization (including legal costs) were borne by the Advisor which paid them directly, or waived fees or reimbursed expenses to offset those costs. The management fee of the Acquiring Fund is slightly higher than the advisory fee of the Acquired Fund. The Acquiring Fund, however, employs a unitary fee structure pursuant to which Matthews bears all operating expenses of the Fund subject to limited exceptions, which is expected to result in a lower net expense ratio than each share class of the Acquired Fund. The Reorganization did not materially change the Acquired Fund’s portfolio holdings. There are no material differences in the accounting policies of the Acquired Fund and the Acquiring Fund.

The Acquiring Fund did not purchase or sell securities following the Reorganization for purposes of realigning its investment portfolio. Accordingly, the Reorganization did not affect the Acquiring Fund’s portfolio turnover ratio for the period ended December 31, 2023.

2.	SIGNIFICANT ACCOUNTING POLICIES

SECURITY VALUATION: Pursuant to Rule 2a-5 under the 1940 Act, the Funds’ Board of Trustees (the “Board”) has designated authority to a Valuation Designee, Matthews International Capital Management, LLC (“Matthews”), the Funds’ investment advisor, to make fair valuation determinations under adopted procedures subject to Board oversight. Matthews has formed a Valuation Committee (the “Valuation Committee”) to administer the pricing and valuation of portfolio securities and other assets and liabilities and to ensure that prices determined by Matthews or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value. The value of the Trust’s securities is based on market quotations for those securities, or on their fair value determined by the valuation policies approved by the Board. Market quotations and valuation information are provided by commercial pricing services or securities dealers that are independent of the Funds and Matthews in accordance with procedures established by the Valuation Designee. Foreign exchange-traded securities are valued as of the close of trading on the primary exchange on which they trade. Securities that trade in over-the-counter markets, including most debt securities (bonds), may be valued by other third-party vendors or by using indicative bid quotations from dealers or market makers, or other available market information. Market values for securities are determined based on quotations, market data or other information from the principal (or most advantageous) market on which the security is traded. Market quotations for equity securities used by the Funds include last reported sale prices, or, if such prices are not reported or available, bid and ask prices. The Funds may also utilize independent pricing services to assist them in determining a current market value for each security based on sources believed to be reliable.

The books and records of the Funds are maintained in U.S. dollars. Transactions, portfolio securities, and assets and liabilities denominated in a foreign currency are translated and recorded in U.S. dollars at the prevailing exchange rates. The Fund does not isolate the effect of changes in foreign exchange rates from changes in market prices on securities held. Accordingly, such changes are included within Change in net unrealized appreciation/depreciation on investments on the Statement of Operations. Translation gains or losses resulting from changes in the exchange rate during the reporting period and realized gains and losses on the settlement of foreign currency transactions are reported in the results of operations for the current period. The Funds isolate that portion of gains and losses on investments in fixed income securities that is due to changes in foreign exchange rate from that which is due to changes in market prices of securities.


62		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

Level 1: Unadjusted quoted prices in active markets for identical securities (foreign securities that are valued based on market quotations).

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

On December 31, 2023, securities held by the Matthews Emerging Markets Equity Active ETF, Mathews Emerging Markets ex China Active ETF, Matthews Asia Innovators Active ETF, Matthews China Active ETF, Matthews India Active ETF, Matthews Japan Active ETF and Matthews Korea Active ETF were classified as Level 1, based on the inputs used to determine their fair values.

On December 31, 2023, the following Funds had level 1 and level 2 fair valued securities:


	Matthews Emerging Markets Sustainable Future Active ETF		Matthews Pacific Tiger Active ETF		Matthews Asia Dividend Active ETF
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Australia		$—		$—		$155,552
Brazil		1,092,280		—		—
Chile		105,850		—		—
China/Hong Kong		5,810,695		29,371,866		397,180
Estonia		99,944		—		—
France		—		—		—
India		2,857,710		15,825,174		130,042
Indonesia		—		2,200,395		38,410
Japan		—		—		493,408
Jordan		153,280		—		—
Philippines		—		1,559,059		—
Poland		453,826		—		—
Romania		187,008		—		—
Saudi Arabia		373,222		—		—
Singapore		—		1,208,140		53,442
South Korea		1,059,704		10,596,422		98,506
Switzerland		—		—		—
Taiwan		1,347,094		15,188,683		134,888
United States		513,320		—		—
Vietnam		19,034		749,614		22,181
Preferred Equities:
South Korea		65,134		—		—
Short-Term Investments		26,961		3,771,939		30,049
Total		14,165,062		80,471,292		1,553,658
Level 2: Other Significant Observable Inputs
Common Equities:
Bangladesh		8,550		—		—
Thailand		—		2,921,888		24,595
Total Market Value of Investments		$14,173,612		$83,393,180		$1,578,253

RISKS ASSOCIATED WITH NON-U.S. COMPANIES: Investments by the Funds in the securities of non-U.S. companies may involve investment risks not typically associated with investments in U.S. issuers. These risks include possible political, economic, social and religious instability; inadequate investor protection; changes in laws or regulations of Emerging Market or Asia Pacific countries where the Funds may invest; international relations with other nations; natural disasters; corruption; and military activity. Foreign securities may trade in securities markets that are substantially smaller, less developed, less liquid and more volatile than the major securities markets in the United States. Foreign securities may be subject to greater fluctuations in price than securities of domestic corporations or the U.S. government. Foreign investing may also include the risk of expropriation or confiscatory taxation, limitation on the removal of funds or other assets, currency crises and exchange controls, the imposition of foreign withholding tax on the interest income payable on such instruments, the possible seizure or nationalization of foreign deposits or assets, or the adoption of other foreign government restrictions that might adversely affect the foreign securities held by the Funds. Additionally, Emerging Market and Asia Pacific countries may utilize formal or informal currency exchange controls or “capital controls” that may limit the ability to repatriate investments or income or adversely affect the value of portfolio investments. The economies of many Emerging Market and Asia Pacific countries differ from the economies of more developed countries in many respects, such as their rate of growth, inflation, capital reinvestment, resource self-sufficiency and dependence on other economies, financial system stability, the national balance of payments position and sensitivity to changes in global trade.


				matthewsasia.com \| 833.228.5605			63

Notes to Financial Statements (continued)

D.	DISTRIBUTIONS TO SHAREHOLDERS:

The Funds generally distribute their net investment income once annually in December. Any net realized gain from the sale of portfolio securities and net realized gains from foreign currency transactions are distributed at least once each year unless they are used to offset losses carried forward from prior years. The Funds will declare and pay income and capital gain distributions in cash. Distributions in cash may be reinvested automatically in additional whole shares of the Funds only if the broker through whom you purchased your shares makes such option available. Your broker is responsible for distributing the income and capital gain distributions to you. Distributions are treated the same for tax purposes whether received in cash or reinvested. If you buy shares when a Fund has realized but not yet distributed ordinary income or capital gains, you will be “buying a dividend” by paying the full price of the shares and then receiving a portion of the price back in the form of a taxable dividend.

The tax character of distributions paid for the periods ended December 31, 2023 and December 31, 2022 were as follows:


PERIOD ENDED DECEMBER 31, 2023	Ordinary Income
Matthews Emerging Markets Equity Active ETF		$5,917
Matthews Emerging Markets ex China Active ETF		100,234
Matthews Emerging Markets Sustainable Future Active ETF		3,113
Matthews Pacific Tiger Active ETF		58,559
Matthews Asia Innovators Active ETF		841,608
Matthews China Active ETF		350,744
Matthews Japan Active ETF		5,378
Matthews Korea Active ETF		1,077,132
Matthews Asia Dividend Active ETF		5,818

PERIOD ENDED DECEMBER 31, 2022	Ordinary Income
Matthews Emerging Markets Equity Active ETF		$28,090


64		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

CASH, CASH OVERDRAFTS, AND FOREIGN CURRENCY: When any of the Funds’ cash balances are overdrawn, a Fund is charged an overdraft fee by the custodian of 3% above the effective federal funds rate on outstanding balances. QFI accounts (i.e., the accounts through which the QFI quota is accessed) are required by the local market to maintain a cash reserve. The cash reserve is based upon a fixed ratio of the QFI’s approved investment quota, which is defined as the amount remitted into its special Renminbi (RMB) cash account. These amounts, if any, are included in “Segregated foreign currency at value” on the Statements of Assets and Liabilities. The fixed ratio is set at 0.08 percent for the Shanghai and 0.06 percent for the Shenzhen market.

G.	USE OF ESTIMATES: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

H.	RECENT ACCOUNTING GUIDANCE

The FASB issued Accounting Standards Update (ASU), ASU 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting in March 2020 and ASU 2021-01 in January 2021 which provided further amendments and clarifications to Topic 848. These ASUs provide optional, temporary relief with respect to the financial reporting of contracts subject to certain types of modifications due to the planned discontinuation of the London Interbank Offered Rate (LIBOR), and other interbank-offered based reference rates, through December 31, 2022. In December 2022, FASB issued ASU 2022-06 which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. Management intends to rely upon the relief provided under Topic 848, which is not expected to have a material impact on the Funds’ financial statements.

In June 2022, the FASB issued Accounting Standards Update (ASU), ASU 2022-03, Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments under this ASU are effective for fiscal years beginning after December 15, 2023; however, the Funds opted to early adopt, as permitted, effective December 1, 2022. Adoption of the guidance did not have a material impact on the Funds’ financial statements.

3.	CAPITAL SHARE TRANSACTIONS

Capital shares are issued and redeemed by the Fund only in aggregations of a specified number of shares or multiples thereof (Creation Units) at NAV, in return for securities, other instruments, and/or cash (the Basket). Except when aggregated in Creation Units, shares of the Fund are not redeemable. Transactions in capital shares for the Fund are disclosed in detail in the Statement of Changes in Net Assets. Purchasers and redeemers of Creation Units are charged a transaction fee to cover the estimated cost to the Fund of processing the purchase or redemption, including costs charged to it by the NSCC (National Securities Clearing Corporation) or DTC (Depository Trust Company), and the estimated transaction costs, e.g., brokerage commissions, bid ask spread, and market impact trading costs, incurred in converting the Basket to or from the desired portfolio composition. The transaction fee is determined daily and will be limited to amounts approved by the Board and determined by the Adviser to be appropriate to defray the expenses that the Fund incurs in connection with the purchase or redemption. The purpose of transaction fees is to protect the Fund’s existing shareholders from the dilutive costs associated with the purchase and redemption of Creation Units. The amount of transaction fees will differ depending on the estimated trading costs for portfolio positions and Basket processing costs and other considerations. Transaction fees may include fixed amounts per creation or redemption transactions, amounts varying with the number of Creation Units purchased or redeemed, and varying amounts based on the time an order is placed. The Fund may impose higher transaction fees when cash is substituted for Basket instruments. Higher transaction fees may apply to purchases and redemptions through the DTC than through the NSCC.


	Year Ended December 31, 2023						For the Period Ended December 31, 2022¹
	Shares			Amount			Shares		Amount
MATTHEWS EMERGING MARKETS EQUITY ACTIVE ETF

Shares sold		2,700,000			$73,704,102			240,000		$6,323,916

Shares redeemed		(960,000	)		(25,232,737	)		—		—
Net increase		1,740,000			$48,471,365			240,000		$6,323,916

1	The Fund commenced operations on July 13, 2022.


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS EMERGING MARKETS EX CHINA ACTIVE ETF

Shares sold		320,000		$8,191,671

Shares redeemed		—		—
Net increase		320,000		$8,191,671

1	The Fund commenced operations on January 10, 2023.


				matthewsasia.com \| 833.228.5605			65

Notes to Financial Statements (continued)


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS EMERGING MARKETS SUSTAINABLE FUTURE ACTIVE ETF

Shares sold		550,000		$13,578,322

Shares redeemed		—		—
Net increase		550,000		$13,578,322

1	The Fund commenced operations on September 21, 2023.


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS PACIFIC TIGER ACTIVE ETF

Shares sold		3,150,000		$77,678,654

Shares redeemed		—		—
Net increase		3,150,000		$77,678,654

1	The Fund commenced operations on September 21, 2023.


	Year Ended December 31, 2023						For the Period Ended December 31, 2022¹
	Shares			Amount			Shares		Amount
MATTHEWS ASIA INNOVATORS ACTIVE ETF

Shares sold		1,400,000			$36,516,439			4,350,000		$104,572,402

Shares redeemed		(2,150,000	)		(48,679,124	)		—		—
Net increase (decrease)		(750,000	)		($12,162,685	)		4,350,000		$104,572,402

1	The Fund commenced operations on July 13, 2022.


	Year Ended December 31, 2023						For the Period Ended December 31, 2022¹
	Shares			Amount			Shares		Amount
MATTHEWS CHINA ACTIVE ETF

Shares sold		1,160,000			$30,207,259			420,000		$9,704,698

Shares redeemed		(440,000	)		(8,952,861	)		—		—
Net increase		720,000			$21,254,398			420,000		$9,704,698

1	The Fund commenced operations on July 13, 2022.


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS INDIA ACTIVE ETF

Shares sold		220,000		$5,563,942

Shares redeemed		—		—
Net increase		220,000		$5,563,942

1	The Fund commenced operations on September 21, 2023.


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS JAPAN ACTIVE ETF

Shares sold		40,000		$1,000,000

Shares redeemed		—		—
Net increase		40,000		$1,000,000

1	The Fund commenced operations on September 21, 2023.


66		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)


	Year Ended December 31, 2023¹						Year Ended December 31, 2022
	Shares			Amount			Shares			Amount
MATTHEWS KOREA ACTIVE ETF (FORMERLY INSTITUTIONAL CLASS)²

Shares sold		2,718,906			$70,480,765			81,837			$2,268,597

Reinvestment of distributions		42,186			1,051,693			40,393			953,194

Shares redeemed		(603,244	)		(15,058,183	)		(161,336	)		(4,304,395	)
Net increase (decrease)		2,157,848			$56,474,275			(39,106	)		($1,082,604	)
Investor class

Shares sold		318,248			$1,279,757			1,794,314			$7,344,868

Shares issued through reinvestment of distributions		—			—			1,920,486			7,451,487

Shares redeemed		(18,877,339	)		(79,650,512	)		(5,847,971	)		(24,651,834	)
Net (decrease)		(18,559,091	)		($78,370,755	)		(2,133,171	)		($9,855,479	)

The Matthews Korea Active ETF acquired all assets and liabilities of the Matthews Korea Fund (the “Predecessor Fund”) in a reorganization that occurred on July 14, 2023. The performance and financial history of the Predecessor Fund’s Institutional Class have been adopted by the Matthews Korea Active ETF. As a result, the information prior to July 14, 2023 reflects that of the Predecessor Fund’s Institutional Class. The Predecessor Fund ceased operations as of the date of the reorganization. (See Note 1).

2	On June 23, 2023, the Predecessor Fund’s Institutional Class effected a reverse share split with a ratio of 1 : 0.166538 (old to new). Share amounts transacted prior to June 23, 2023 have been adjusted to reflect the reverse share split.


	For the Period Ended December 31, 2023¹
	Shares		Amount
MATTHEWS ASIA DIVIDEND ACTIVE ETF

Shares sold		50,000		$1,500,000

Shares redeemed		—		—
Net increase		50,000		$1,500,000

1	The Fund commenced operations on September 21, 2023.

4.	INVESTMENT MANAGEMENT FEES

Pursuant to the Investment Management Agreement, as amended, between Matthews and the Trust, Matthews will pay substantially all the expenses of each Fund excluding management fees, interest expenses, taxes, brokerage fees, securities lending fees, payments under a Fund’s 12b-1 plan (if any), acquired fund fees, litigation expenses and any extraordinary expenses.

For the Matthews Korea Active ETF, Matthews has contractually agreed to a fee waiver agreement dated April 28, 2023 (the “Fee Waiver Agreement”), under which Matthews has agreed to waive a portion of the management fee with respect to the Matthews Korea Active ETF if and to the extent that the total annual operating expense ratio of the lowest cost share class of any “Family-Priced Fund” is less than the applicable management fee rate of the Matthews Korea Active ETF. The Family-Priced Funds are the series of the Trust that are operated as mutual funds, other than the Matthews Emerging Markets Small Companies Fund and the Matthews China Small Companies Fund. The Fee Waiver Agreement will remain in effect until terminated by the Board and a majority of the Independent Trustees. Based on the currently applicable expense ratios for the Family-Priced Funds, it is not expected that a waiver under the Fee Waiver Agreement will occur in the foreseeable future.

The investment management fee, accrued daily and paid monthly by the Funds based on the average daily net assets of each Fund, are as follows:


Matthews Emerging Markets Equity Active ETF			0.79%
Matthews Emerging Markets ex China Active ETF			0.79%
Matthews Emerging Markets Sustainable Future Active ETF			0.79%
Matthews Pacific Tiger Active ETF			0.79%
Matthews Asia Innovators Active ETF			0.79%
Matthews China Active ETF			0.79%
Matthews India Active ETF			0.79%
Matthews Japan Active ETF			0.79%
Matthews Korea Active ETF*			0.79%
Matthews Asia Dividend Active ETF			0.79%

Prior to July 14, 2023, Matthews, a registered investment advisor under the 1940 Act, provided the Matthews Korea Active ETF (formerly the Matthews Korea Fund) (the “Korea Fund”) with investment management services pursuant to an Investment Advisory Agreement dated February 1, 2016, as amended (the “Advisory Agreement”), under which the Korea Fund paid Matthews (i) for management and advisory services; and (ii) for certain administrative services, an annual fee as a percentage of average daily net assets. Under the Advisory Agreement, the family-priced Matthews Asia Funds mutual funds (the “Mutual Funds”), including the Korea Fund, paid Matthews 0.75% of their aggregate average daily net assets up to $2 billion, 0.6834% of their aggregate average daily net assets over $2 billion up to $5 billion, 0.65% of their aggregate average daily net assets over $5 billion up to $25 billion, 0.64% of their aggregate average daily net assets over $25 billion up to $30 billion, 0.63% of their aggregate average daily net assets over $30 billion up to $35 billion, 0.62% of their aggregate average daily net assets over $35 billion up to $40 billion, 0.61% of their aggregate average daily net assets over $40 billion up to $45 billion, and 0.60% of their aggregate average daily net assets over $45 billion. The Korea Fund paid Matthews a monthly fee at the annual rate using the applicable management fee calculated based on the actual number of days of that month and based on the its average daily net asset value for the month.

Prior to July 14, 2023, pursuant to an Administration and Shareholder Services Agreement dated August 13, 2004, as amended (the “Services Agreement”), the Mutual Funds, including the Korea Fund, paid an annual administration and shareholder servicing fee to Matthews, as a percentage of the average daily net assets of each fund in aggregate, computed and prorated on a daily basis. Under the Services Agreement, the Mutual Funds in the aggregate paid Matthews 0.25% of their aggregate average daily net assets up to $2 billion, 0.1834% of their aggregate average daily net assets over $2 billion up to $5 billion, 0.15% of their aggregate average daily net assets over $5 billion up to $7.5 billion, 0.125% of their aggregate average daily net assets over $7.5 billion up to $15 billion, 0.11% of their aggregate average daily net assets over $15 billion up to $22.5 billion, 0.10% of their aggregate average daily net assets over $22.5 billion up to $25 billion, 0.09% of their aggregate average daily net assets over $25 billion up to $30 billion, 0.08% of their aggregate average daily net assets over $30 billion up to $35 billion, 0.07% of their aggregate average daily net assets over $35 billion up to $40 billion, 0.06% of their aggregate average daily net assets over $40 billion up to $45 billion, and 0.05% of their aggregate average daily net assets over $45 billion.


				matthewsasia.com \| 833.228.5605			67

Notes to Financial Statements (continued)

As of December 31, 2023, Matthews and its affiliates held significant shares in the Funds as follows:


	Shares held by Matthews and its Affiliates		Percentage of Outstanding Shares
Matthews Japan Active ETF		22,356		56%
Matthews Asia Dividend Active ETF		8,820		18%

5.	INVESTMENTS

For the period ended December 31, 2023, the cost of investments purchased and proceeds from sale of investments (excluding in-kind transactions and short-term investments) were as follows:


	Purchases		Proceeds from Sales
Matthews Emerging Markets Equity Active ETF		$46,800,240		$22,894,986
Matthews Emerging Markets ex China Active ETF		5,424,899		1,583,574
Matthews Emerging Markets Sustainable Future Active ETF		10,097,066		24,409
Matthews Pacific Tiger Active ETF		57,231,055		4,301,500
Matthews Asia Innovators Active ETF		320,844,443		324,845,238
Matthews China Active ETF		41,862,006		16,338,428
Matthews India Active ETF		6,014,104		507,487
Matthews Japan Active ETF		1,363,257		427,725
Matthews Korea Active ETF		21,172,694		45,850,637
Matthews Asia Dividend Active ETF		1,549,091		84,686

For the period ended December 31, 2023, the cost of in-kind purchases and proceeds from in-kind sales were as follows:


	Purchases		Proceeds from Sales
Matthews Emerging Markets Equity Active ETF		$37,912,445		$15,203,686
Matthews Emerging Markets ex China Active ETF		4,129,232		—
Matthews Emerging Markets Sustainable Future Active ETF		3,450,690		—
Matthews Pacific Tiger Active ETF		24,469,455		—
Matthews Asia Innovators Active ETF		13,930,518		21,778,633
Matthews China Active ETF		2,203,227		6,422,647
Matthews Korea Active ETF		129,165		91,186

6.	INCOME TAX INFORMATION

As of December 31, 2023, the components of accumulated earnings/deficit on tax basis were as follows:


	Undistributed Ordinary Income		Capital Loss Carryforwards			Late Year Losses*			Unrealized Appreciation/ (Depreciation)**			Total Accumulated Earnings/ (Deficit)
Matthews Emerging Markets Equity Active ETF		$—		$(821,113	)		$(459,414	)		$2,489,134			$1,208,607
Matthews Emerging Markets ex China Active ETF		24,984		(52,444	)		(95,491	)		762,569			639,618
Matthews Emerging Markets Sustainable Futures Active ETF		26,214		—			—			550,063			576,277
Matthews Pacific Tiger Active ETF		179,396		—			(362,038	)		2,293,139			2,110,497
Matthews Asia Innovators Active ETF		173,283		(15,663,027	)		(4,065,416	)		9,644,724			(9,910,436	)
Matthews China Active ETF		—		(2,191,158	)		(296	)		(6,810,090	)		(9,001,544	)
Matthews India Active ETF		11,252		—			—			364,719			375,971
Matthews Japan Active ETF		5,508		(17,075	)		(6,785	)		70,873			52,521
Matthews Korea Active ETF		2,471,623		—			—			6,916,331			9,387,954
Matthews Asia Dividend Active ETF		7,109		—			—			74,582			81,691

*	The Funds have elected to defer certain qualified late-year losses and recognize such losses in the next fiscal year.

**	The differences between book-basis and tax-basis unrealized appreciation/depreciation is attributable primarily to the tax deferral of losses on wash sales and passive foreign investment company (PFIC) mark to market adjustments.


68		MATTHEWS ASIA FUNDS

Notes to Financial Statements (continued)

As of December 31, 2023, the Funds have capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates as follows:


	Amount With No Expiration
	Short-term Losses		Long-term Losses		Total
Matthews Emerging Markets Equity Active ETF		$807,971		$13,142		$821,113
Matthews Emerging Markets ex China Active ETF		52,444		—		52,444
Matthews Asia Innovators Active ETF		15,537,340		125,687		15,663,027
Matthews China Active ETF		2,071,547		119,611		2,191,158
Matthews Japan Active ETF		17,075		—		17,075

The following Funds utilized capital loss carryforwards in the current year:


	Utilized Capital Loss Carryforwards
Matthews Korea Active ETF		$4,223,076

Under the Regulated Investment Company Modernization Act of 2010, the Funds are permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. However, any losses incurred during those future taxable years will be required to be utilized prior to any losses incurred in pre-enactment taxable years, which generally expire after eight years from when they are incurred. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.


	Increase/(Decrease) Capital paid-in			Increase/(Decrease) Total Distributable Earnings/(Accumulated Loss)
Matthews Emerging Markets Equity Active ETF		$(96,875	)		$96,875
Matthews Asia Innovators Active ETF		2,365,781			(2,365,781	)
Matthews China Active ETF		(215,188	)		215,188
Matthews Korea Active ETF		21,103			(21,103	)

As of December 31, 2023, the tax cost of investments and the related net unrealized appreciation and depreciation were as follows:


	Tax Cost		Gross Unrealized Appreciation		Gross Unrealized Depreciation			Net Unrealized Appreciation/ (Depreciation)
Matthews Emerging Markets Equity Active ETF		$52,936,185		$6,087,592		$(3,530,547	)		$2,557,045
Matthews Emerging Markets ex China Active ETF		8,036,043		1,030,507		(253,744	)		776,763
Matthews Emerging Markets Sustainable Futures Active ETF		13,601,140		833,976		(261,504	)		572,472
Matthews Pacific Tiger Active ETF		80,980,628		3,986,451		(1,573,899	)		2,412,552
Matthews Asia Innovators Active ETF		73,621,999		12,323,660		(2,350,627	)		9,973,033
Matthews China Active ETF		28,529,592		878,648		(7,688,720	)		(6,810,072	)
Matthews India Active ETF		5,529,346		486,908		(33,158	)		453,750
Matthews Japan Active ETF		981,634		82,093		(11,232	)		70,861
Matthews Korea Active ETF		59,442,514		11,116,137		(4,203,924	)		6,912,213
Matthews Asia Dividend Active ETF		1,502,320		107,096		(31,163	)		75,933

7.	OTHER MATTERS

Mergers and Reorganizations—Pursuant to an Agreement and Plan of Reorganization (a “Reorganization Agreement”) between the Matthews Korea Fund (the “Acquired Fund”), and the Matthews Korea Active ETF (the “Acquiring Fund”), that occurred on July 14, 2023, all of the assets and liabilities of the Institutional Class of the Acquired Fund were transferred to the Acquiring Fund in exchange for shares of the Acquiring Fund having an aggregate NAV equal to the NAV of such Acquired Fund as of the time of valuation specified in the applicable Reorganization Agreement, which were then distributed to shareholders of record of such Acquired Fund in a tax-free exchange (the “Reorganization”) as follows:

Acquired Fund/Acquiring Fund

Exchanged Shares
of Acquiring Fund
Issued

Value of Exchanged
Shares

Acquired Fund’s
Shares Outstanding
as of July 14,
2023

Matthews Korea Fund, Institutional Class/Matthews Korea Active ETF

2,493,212

$65,862,730

2,493,212


				matthewsasia.com \| 833.228.5605			69

Notes to Financial Statements (continued)

The Acquiring Fund has been organized solely in connection with the Reorganization to acquire all of the assets and liabilities of the Acquired Fund and continue the business of the Acquired Fund. Therefore, after the Reorganization, the Acquired Fund will remain the “accounting survivor.” This means that the Acquiring Fund will continue to show the historical investment performance and returns of the Acquired Fund (even after conversion of the Acquired Fund).

The following chart shows Acquiring Fund’s and Acquired Fund’s aggregate net assets (immediately before and after the completion of the acquisition) and the Acquired Fund’s unrealized depreciation:


Acquired Fund/Acquiring Fund	Acquiring Fund’s Aggregate Net Assets before acquisition		Acquired Fund’s Aggregate Net Assets before acquisition		Acquiring Fund’s Aggregate Net Assets immediately after acquisition		Acquired Fund’s Unrealized Appreciation (Depreciation)¹		Acquired Fund’s Capital Loss Carryforward²
Matthews Korea Fund, Institutional Class/Matthews Korea Active ETF		—		$65,862,730		$65,862,730		$9,969,616		$4,223,076

1	The Acquiring Fund has elected to carry forward the assets of the Acquired Fund at the Acquired Fund’s historical cost basis for purposes of measuring unrealized depreciation and future realized gain or loss of those acquired assets.

2	Represents Capital Loss Carryforward of Acquired Fund as of December 31, 2022.

8.	SUBSEQUENT EVENTS

On January 10, 2024, the Matthews Emerging Markets Discovery Active ETF and the Matthews China Discovery Active ETF, each a new series of the Trust, were launched.


70		MATTHEWS ASIA FUNDS

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of Matthews International Funds and Shareholders of each of the ten funds listed in the table below:

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of each of the funds indicated in the table below (ten of the funds constituting Matthews International Funds, hereafter collectively referred to as the “Funds”) as of December 31, 2023, the related statements of operations and of changes in net assets for each of the periods indicated in the table below, including the related notes, and the financial highlights for each of the periods indicated therein (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of December 31, 2023, the results of each of their operations and changes in each of their net assets for each of the periods indicated in the table below, and each of the financial highlights for each of the periods indicated therein in conformity with accounting principles generally accepted in the United States of America.


Fund	Statement of Operations	Statement of Changes in Net Assets
Matthews China Active ETF Matthews Asia Innovators Active ETF Matthews Emerging Markets Equity Active ETF	For the year ended December 31, 2023	For the year ended December 31, 2023 and for the period July 13, 2022 (commencement of operations) to December 31, 2022
Matthews Korea Active ETF	For the year ended December 31, 2023	For each of the two years in the period ended December 31, 2023
Matthews Emerging Markets ex China Active ETF	For the period January 10, 2023 (commencement of operations) to December 31, 2023	For the period January 10, 2023 (commencement of operations) to December 31, 2023
Matthews Emerging Markets Sustainable Future Active ETF Matthews Asia Dividend Active ETF Matthews India Active ETF Matthews Pacific Tiger Active ETF Matthews Japan Active ETF	For the period September 21, 2023 (commencement of operations) to December 31, 2023	For the period September 21, 2023 (commencement of operations) to December 31, 2023

Basis for Opinions

PricewaterhouseCoopers LLP

San Francisco, CA

February 23, 2024

We have served as the auditor of one or more investment companies in Matthews International Funds since 2007.


				matthewsasia.com \| 833.228.5605			71

Tax Information (unaudited)

1. Qualified Dividend Income

The Funds report a portion of the ordinary income distributed during the the period ended December 31, 2023 as Qualified Dividend Income (“QDI”) as defined in the Internal Revenue code as follows:


	QDI Portion
Matthews Emerging Markets Equity Active ETF		100.00%
Matthews Emerging Markets ex China Active ETF		54.09%
Matthews Emerging Markets Sustainable Future Active ETF		98.24%
Matthews Pacific Tiger Active ETF		32.65%
Matthews Asia Innovators Active ETF		44.40%
Matthews China Active ETF		100.00%
Matthews Japan Active ETF		47.95%
Matthews Korea Active ETF		100.00%
Matthews Asia Dividend Active ETF		51.46%

2. Dividends Received Deduction

The Funds report a Dividend Received Deduction pursuant to Section 854 of the Internal Revenue Code for the period ended December 31, 2023 as follows:


Matthews Emerging Markets ex China Active ETF			1.24%
Matthews Emerging Markets Sustainable Future Active ETF			3.41%
Matthews Asia Innovators Active ETF			2.12%

3. Foreign Taxes Paid

The Funds have elected to pass through to their shareholders the foreign taxes paid for year ended December 31, 2023 as follows:


	Foreign Source Income		Foreign Taxes Paid/(Credit)
Matthews Emerging Markets Equity Active ETF		$1,127,786		$—
Matthews Emerging Markets ex China Active ETF		145,778		14,269
Matthews Emerging Markets Sustainable Futures Active ETF		12,584		2,165
Matthews Pacific Tiger Active ETF		116,451		17,203
Matthews Asia Innovators Active ETF		1,845,951		179,932
Matthews China Active ETF		604,029		42,630
Matthews India Active ETF		4,188		—
Matthews Japan Active ETF		7,819		902
Matthews Korea Active ETF		1,063,668		228,323
Matthews Asia Dividend Active ETF		9,266		1,110

4. Qualified Interest Income

The Funds report a portion of the net income dividends distributed during the period ended December 31, 2023, as Qualified Interest Income (QII), as defined in the Internal Revenue Code as follows:


	QII Portion
Matthews Emerging Markets Equity Active ETF		0.27%
Matthews Emerging Markets ex China Active ETF		3.08%
Matthews Emerging Markets Sustainable Future Active ETF		8.60%
Matthews Pacific Tiger Active ETF		19.65%
Matthews Asia Innovators Active ETF		5.72%
Matthews China Active ETF		4.12%
Matthews Japan Active ETF		6.25%
Matthews Korea Active ETF		1.62%
Matthews Asia Dividend Active ETF		6.82%


72		MATTHEWS ASIA FUNDS

Tax Information (unaudited) (continued)

5. Qualified Short-Term Capital Gain Dividends

The Funds report a portion of the short term capital gain dividends distributed during the year ended December 31, 2023, as Qualified Short-Term Gain, as defined in the Internal Revenue Code as follows:


	Short-Term Gains
Matthews Asia Dividend Active ETF		100.00%


				matthewsasia.com \| 833.228.5605			73

Approval of Investment Management Agreement (unaudited)

Matthews Emerging Markets ex China Active ETF

The Matthews Emerging Markets ex China Active ETF (the “Fund”), which is a new series of the Trust, has retained Matthews International Capital Management, LLC (“Matthews”) to manage its assets pursuant to the Management Agreement, which has been approved by the Board of Trustees of the Trust, including the Independent Trustees.

At a meeting held on November 15-16, 2022, the Board, including the Independent Trustees of the Trust, approved the Management Agreement, with respect to the Fund, for an initial term of two years. Following the initial term upon the commencement of operations of the Fund, the Management Agreement continues in effect from year-to-year provided that the continuance is specifically approved at least annually by the vote of the holders of at least a majority of the outstanding shares of the Fund, or by the Board of Trustees, and, in either event, by a majority of the Independent Trustees of the Trust casting votes in person at a meeting called for that purpose.

The Independent Trustees reviewed and discussed the information provided by Matthews at that and prior meetings. The Independent Trustees were assisted in their deliberations by their independent legal counsel. Below is a summary of the factors considered by the Board in approving the Management Agreement with respect to the Fund.

1.	The nature, extent and quality of the services to be provided by Matthews under the Management Agreement.

The Trustees considered the services provided to the other series of the Trust pursuant to the Management Agreement and, with respect to those series operated as mutual funds, pursuant to the Investment Advisory Agreement between the Trust, on behalf of each such series, and Matthews. The Trustees further considered the experience and qualifications of the personnel at Matthews who would be responsible for providing services to the Fund and would be responsible for the daily management of the Fund’s portfolio. The Trustees noted Matthews’ on-going commitment to governance, compliance, risk and valuation practices. The Trustees viewed Matthews as well positioned to provide high quality services to the Fund under various market conditions, as demonstrated by the past volatile and challenging securities markets that have caused either contracting revenues or rapidly expanding assets at different times. The Trustees concluded that Matthews has the quality of personnel and other investment resources essential to performing its duties under the Management Agreement, and that the nature, overall quality and extent of such management services are expected to be satisfactory and reliable.

2.	The investment performance of Matthews.

The Trustees are familiar with the short-term and long-term performance of other series of the Trust on both an absolute basis and in comparison to peer funds and benchmark indices. The Trustees noted that the Fund is a new Fund without any prior performance, but that Matthews intends to follow a similar framework and investment process as for the

Matthews Emerging Markets Equity Active ETF and Matthews Emerging Markets Equity Fund. The Board considered the investment performance of those series, while also taking into account relevant distinctions and differences with respect to the investment strategies of the Fund. The Trustees also emphasized longer-term performance goals, which they believe are more important than short isolated periods for purposes of evaluating Matthews’s success in meeting Fund and shareholder objectives. The Trustees concluded that Matthews has the potential to generate acceptable long-term performance for the Fund.

3.	The extent to which Matthews will realize economies of scale as the Fund grows larger and whether Fund investors will benefit from any economies of scale.

Because the Fund is new, it is not expected to recognize economies of scale for some time. The Trustees expect to monitor the Fund’s growth and evaluate economies of scale at future renewals of the Management Agreement in effect at that time. They expect that the Fund will benefit from existing economies of scale through relatively low fee rates established at inception, as well as through additional investment in the Trust’s business and the provision of improved or additional infrastructure and services to the Fund and its shareholders. As a result, the Trustees were satisfied about the extent to which economies of scale would be shared with the Fund and its shareholders.

4.	The costs of the services to be provided by Matthews and others.

The Trustees considered the management fees and expenses of the Fund in comparison to the advisory fees and other fees and expenses of other existing series of the Trust, noting that, as compared to the other series of the Trust that are operated as mutual funds, the Fund has a unitary management fee structure which will cover most of the ordinary operating expenses of the Fund. The Trustees noted that because Matthews would be assuming many of the operating expenses of the Fund, the total expense ratio for the Fund is lower, and in some cases substantially lower, than the total expense ratios of the series of the Trust that are operated as mutual funds. The Trustees further noted that the total expense ratio of the Fund is the same as the total expense ratio of each other series of the Trust that is operated as an exchange-traded fund. The Trustees also considered the fees and expenses of the competitive universe of actively-managed exchange-traded funds, noting that there were a limited number of such funds in the competitive universe for the Fund. The Trustees considered that the total expense ratio to be paid by investors in the Fund, which is most representative of an investor’s net experience, would be reasonable.

5.	The profits to be realized by Matthews and its affiliates from the relationships with the Fund.

The Trustees recognized that, as a new fund with a unitary fee structure, it is unlikely that the Fund will generate profits for Matthews initially and may not do so until the Fund has experienced some significant growth. The Trustees also


74		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited) (continued)

considered that the additional benefits expected to be derived by Matthews from its relationship with the Fund are limited, and largely consist of research benefits received in exchange for “soft dollars.”

No single factor was determinative of the Board’s decision to approve the Management Agreement, but rather the Trustees based their determination on the total mix of information available to them. After considering the factors described above, the Board concluded that the terms of the management arrangements would be fair and reasonable to the Fund in light of the services that Matthews is expected to provide, and that the Fund’s shareholders are expected to receive reasonable value in return for the management fees paid. For these reasons, the approval of the Management Agreement would be in the best interests of the Fund and its shareholders.

The Management Agreement may be terminated by the Trustees on behalf of the Fund or by Matthews upon 60 days’ prior written notice without penalty. The Management Agreement will also terminate automatically in the event of its assignment, as defined in the 1940 Act.


				matthewsasia.com \| 833.228.5605			75

Approval of Investment Management Agreement (unaudited)

Matthews Korea Active ETF

The Fund named above, which is a series of the Trust, has retained Matthews International Capital Management, LLC (“Matthews”) to manage its assets pursuant to an Investment Management Agreement dated as of June 30, 2022, as amended (the “Management Agreement”), which has been approved by the Board of Trustees of the Trust, including all of the Trustees who are not “interested persons” (“Independent Trustees”), within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). Following an initial two-year term with respect to the Fund, the Management Agreement continues in effect from year-to-year provided that the continuance is specifically approved at least annually by the vote of the holders of at least a majority of the outstanding shares of the Funds, or by the Board of Trustees, and, in either event, by a majority of the Independent Trustees of the Trust casting votes in person at a meeting called for that purpose (the “Annual 15(c) Process”).

At a meeting held on February 22-23, 2023 (the “Meeting”), the Board, including all of the Independent Trustees, approved the Management Agreement for an initial two-year term from April 28, 2023 through April 27, 2025 with respect to the Fund.

The Board recognized at the Meeting that the approval of the Management Agreement in connection with the organization of the Fund was related to the proposed reorganization of the Matthews Korea Fund into the Fund, which was also considered and approved at the Meeting.

At the Meeting and at a prior meeting of the Independent Trustees on January 12, 2023, the Board received and considered information (both written and oral) provided to assist it in the review of the Management Agreement and made assessments with respect to the Fund. The Independent Trustees were advised by independent legal counsel with respect to these matters. The Independent Trustees discussed the approval of the Management Agreement with representatives of Matthews and among themselves in private sessions on various occasions at which no representatives of Matthews were present.

In addition, the Board received presentations about the Trust and its other series throughout the year from management. That other information considered by the Board addressed many of the factors discussed below, including, but not limited to, information about the services provided by Matthews, its structure, organization, operations and personnel, the financial condition of Matthews and the profitability to Matthews from the Management Agreement, compliance procedures and resources, investment performance of other series and any similar strategies, expected expenses of the Fund, planned distribution and marketing of the Fund, relationships with Authorized Participants and market makers, and other information considered relevant.

In considering information relating to management fee levels, the Board took into account that the Fund would pay

Matthews a single unitary fee and that Matthews would be responsible for payment of all ordinary fund expenses out of the unitary fee. The Board considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market in which the Fund would operate. The Board noted that the current almost universal practice among exchange-traded funds was to charge a single unitary fee and therefore considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds. The Board also received, and considered to the extent it thought relevant, information provided by Matthews as to Fund management services and fees as compared to advisory services and fees charged by Matthews to its open-end mutual funds, institutional clients and pooled vehicles organized outside of the United States. The Trustees also considered information comparing the proposed fee and expense levels of the Fund to appropriate peer groups of funds, as well as performance data provided by Matthews with respect to unmanaged benchmarks and pooled vehicles or other accounts managed by Matthews with similar investment objectives and/or strategies to the Fund, as applicable.

Furthermore, throughout the course of the year, the Board received a wide variety of materials relating to the services provided by Matthews, and relating to the nature, extent, and quality of services that would be provided by Matthews to the Fund. The Board also considered that, under the Management Agreement and as part of the unitary management fee, Matthews would provide additional services to the Fund that are essential to the operation of the Fund.

In addition to the information furnished by Matthews, the Trustees were provided with advice from their independent legal counsel discussing their fiduciary duties related to their approval of the Management Agreement and discussed these matters with their counsel.

The Trustees’ determinations at the Meeting were made on the basis of each Trustee’s business judgment after consideration of all the information presented. In deciding to recommend the approval of the Management Agreement with respect to the Fund, the Independent Trustees did not identify any single factor or particular piece of information that, in isolation, was controlling. Each Independent Trustee may also have weighed factors differently. This summary describes the most important, but not all, of the factors considered by the Board and the Independent Trustees.

1.	The nature, extent and quality of the services provided by Matthews under the Management Agreement.

The Trustees considered the overall financial strength and long-term stability of Matthews and its ability to provide a high level and high quality of services to the Fund. The Trustees considered that despite recent challenging conditions with respect to revenues and profitability of the organization, which have been caused by contracting revenues and assets under management, a difficult geopolitical environment and market volatility, Matthews has the


76		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited) (continued)

resources to provide high quality services to the Fund. They considered Matthews’ services provided to the Trust and noted that past periods of volatile and challenging securities markets had not resulted in a diminution of services to the Trust and that Matthews has always demonstrated a commitment to employ the resources necessary to maintain the high level of quality and services to the Trust’s family of funds. The Trustees positively viewed Matthews’ emphasis on preserving and enhancing portfolio management team resources, and careful business planning and management.

The Trustees considered the experience and qualifications of the executive and portfolio management personnel at Matthews who are responsible for providing services to the Fund and who would be responsible for the daily management of the Fund’s portfolios. The Trustees noted that Matthews had experienced some turnover at the senior executive and professional staff levels in recent years. In this regard, the Trustees also reviewed with Matthews the efforts undertaken to replace staff where appropriate and to otherwise minimize its impact on the Trust, including enhancements to the portfolio management teams of certain funds. They also reviewed Matthews’ retention strategies and recent personnel developments relevant to the Trust. They discussed efforts by Matthews to provide appropriate support to the Trust, including, but not limited to, appropriate back-up support such as, but not limited to, enhancing the structure of the portfolio management team to better recognize Matthews’ bench of talent, and ensuring succession plans are put in place. Among the improved capabilities noted by the Independent Trustees over the past several years are enhanced risk analytical resources and related professionals, including ongoing enhancements to compliance, risk management, technology, business infrastructure, operations, marketing and client service, as well as enhancements to valuation practices.

The Trustees considered the technical capabilities of Matthews, including the design and implementation of its disaster recovery and business continuity infrastructure. The Trustees also considered the Chief Compliance Officer’s report regarding Matthews’ compliance resources, risk assessment and other compliance initiatives and programs. The Trustees concluded that Matthews has implemented a robust and diligent compliance process, and demonstrates a strong commitment to a culture of compliance. The Independent Trustees took into consideration Matthews’ description of its supervision of the activities of the Fund’s various service providers, as well as supporting the Independent Trustees’ responsibilities and requests and its responsiveness to questions and/or concerns raised by the Trustees throughout the year.

The Trustees concluded that Matthews had the quality of personnel and other investment resources essential to

performing its duties under the Management Agreement, and that the nature, overall quality, cost and extent of such management services are satisfactory.

2.	The investment performance of the Fund.

The Trustees considered the performance of other series of Trust with similar strategies, namely the Korea Fund that would be reorganized into the Fund, on both an absolute basis and in comparison to appropriate peer funds, benchmark indices and to the extent they exist, Matthews’ similarly managed accounts, for various periods. The Trustees considered those investment results in light of the Fund’s objective, strategies and market conditions, noting periods during which there were challenging investment conditions in various Asian and emerging markets. The Board also considered that the Fund has investment objectives, goals and strategies that are nearly identical to the Korea Fund but very different from non-managed broad-based benchmarks, which rendered performance comparisons against such broad-based benchmarks of lesser utility. In this regard, the Board took into account that the Fund is not designed to perform like broad-based indices and therefore that most investors in the Fund likely are not seeking to achieve benchmark-like returns.

After review, the Trustees concluded that the Fund has the potential to achieve acceptable performance. The Trustees also reviewed Matthews’ trading policies and ability to obtain best overall execution for the Fund in the various markets in which the Fund trades securities. The Trustees noted Matthews’ consistent adherence to its long-standing investment approach, which emphasizes fundamental bottom-up driven investment selection in light of its view of regional economic conditions.

3.	The extent to which Matthews realizes economies of scale as the Fund grows larger and whether Fund investors benefit from any economies of scale.

The Trustees considered that, although the Fund would be newly launched, it would be the surviving entity in the reorganization with the Korea Fund, which will give it a larger asset base compared to a typical new fund. However, it would still have limited assets at commencement of operations and, therefore, is not expected to recognize economies of scale for some time. The Trustees noted that they expect to monitor the Fund’s growth and evaluate economies of scale at future renewals of the Management Agreement in effect at that time. The Trustees further noted that the Fund benefits from existing economies of scale through relatively low fee rates established at inception, as well as through additional investment in the Trust’s business and the provision of improved or additional infrastructure and services to the Fund and its shareholders. The Trustees discussed Matthews’ ongoing investment in its technology, systems, staffing and other aspects of its business that can benefit the Fund, noting that all these endeavors are a means by which Matthews is sharing economies of scale with the Fund and its shareholders through reinvestment in products and services that are designed to benefit the Fund and its shareholders. The Trustees considered the new personnel hired over recent years, as


				matthewsasia.com \| 833.228.5605			77

Approval of Investment Management Agreement (unaudited) (continued)

well as planned hiring, and the extent to which that hiring could be expected to benefit shareholders. As a result, the Trustees remain satisfied about the extent to which economies of scale are being and will continue to be shared with the Fund and its shareholders.

4.	The costs of the services provided by Matthews and others.

The Trustees considered the unitary fee, which is the total expense ratio of the Fund. The Board also considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market in which the Fund operates. The Board considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds in the Fund’s relevant peer group.

The Trustees also received, and considered to the extent they thought relevant, information relating to the estimated management fees and total expenses of the Fund in comparison to the advisory fees and other fees and expenses of other existing series of the Trust, noting that, as compared to the other series of the Trust that are operated as mutual funds, the Fund has a unitary management fee structure that covers most of the ordinary operating expenses of the Fund. The Board noted that Matthews has agreed to waive a portion of its management fee for the Fund in certain extraordinary circumstances to the extent necessary to ensure that the advisory fee payable by the Fund is not more than the advisory fee that would have been payable by the Korea Fund if the proposed reorganization did not occur;

The Trustees also compared the Fund’s unitary fee with the advisory or management fee charged by Matthews for its separate accounts and other investment products. The Trustees considered Matthews’ explanations as to the differences in services between these products and the Fund, including the differences in the frequency of net asset value calculations and other operational and compliance activities.

The Trustees’ overall assessment with respect to the Fund was that, taking into account the considerations noted below, the total expense ratio to be paid by investors in the Fund, which is most representative of an investor’s net experience, would be fair and reasonable.

The Trustees recognized that, because the Fund is expected to have relatively limited assets at commencement of operations and with a unitary fee structure, it is unlikely that the Fund will generate profits for Matthews initially and may not do so until the Fund has experienced some significant growth.

The Trustees also reviewed information provided regarding the structure and manner in which Matthews’ investment professionals were compensated and their respective views of the relationship of such compensation to the attraction and retention of quality personnel. The Trustees considered Matthews’ willingness to invest in technology, infrastructure and professional staff to reinforce and offer services and to accommodate changing regulatory requirements and industry practices.

The Trustees noted that Matthews has experienced reduced profitability this past year as overall assets under management have fallen due to continued risk off sentiment in the asset class but still appeared to be sufficiently profitable to operate as a viable investment management firm, able to honor its obligations as a sponsor of the Fund, including the funds that do not generate a profit for Matthews. The Trustees noted that, with fluctuations in asset levels in the Trust in recent years, heightened volatility in revenues and profitability could be expected from time to time in the future, but they also noted the increased cost control measures by Matthews with certain continued expenditures on personnel and other resources where appropriate.

Based on information received, the consensus of the Trustees was that Matthews’ expected overall profitability from the Management Agreement with respect to the Fund would not be excessive in the foreseeable future.

5.	Ancillary benefits.

The Trustees requested and received from Matthews information concerning other benefits received by Matthews as a result of its respective relationship with the Trust, including various service arrangements with Matthews. These potential benefits included, among other things, the use of soft dollars as well as potential benefits resulting from the structure of compensation arrangements between the Trust, the Adviser and financial intermediaries in the areas of shareholder servicing and sub-transfer agency services. The Board concluded that such benefits were consistent with those generally derived by investment advisers to mutual funds or were otherwise not unusual.

6.	Conclusions.

Based on their review, including their consideration of each of the factors referred to above, and assisted by the advice of independent counsel to the Independent Trustees, the Board, including the Independent Trustees, concluded that the Management Agreement would be fair and reasonable with respect to the Fund and its shareholders, and that the approval of the Management Agreement would be in the best interests of the Fund and its shareholders. The Board did not indicate that any single factor was determinative of its decision to approve the Management Agreement, but indicated that the Board based its determination on the total mix of information available to it.


78		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited)

Matthews Emerging Markets Equity Active ETF

Matthews Asia Innovators Active ETF

Matthews China Active ETF

The Funds named above, which are series of the Trust, have retained Matthews International Capital Management, LLC (“Matthews”) to manage their assets pursuant to an Investment Management Agreement dated as of June 30, 2022, as amended (the “Management Agreement”), which has been approved by the Board of Trustees of the Trust, including all of the Trustees who are not “interested persons” (“Independent Trustees”), within the meaning of the Investment Company Act of 1940, as amended (the “1940 Act”). Following an initial two-year term with respect to each Fund, the Management Agreement continues in effect from year-to-year provided that the continuance is specifically approved at least annually by the vote of the holders of at least a majority of the outstanding shares of the Funds, or by the Board of Trustees, and, in either event, by a majority of the Independent Trustees of the Trust casting votes in person at a meeting called for that purpose (the “Annual 15(c) Process”).

At a meeting held on August 23-24, 2023 (the “Meeting”), the Board, including all of the Independent Trustees, approved the continuation of the Management Agreement for an additional one-year term ending June 29, 2025, with respect to each Fund.

At the Meeting and at a prior meeting of the Independent Trustees on August 18, 2023, the Board received and considered information (both written and oral) provided to assist it in the review of the Management Agreement and made assessments with respect to each Fund individually. The Independent Trustees were advised by independent legal counsel with respect to these matters. Prior to the August 18, 2023 meeting, a working group of Independent Trustees and independent legal counsel had met with representatives of Matthews on August 2, 2023 to review relevant information in connection with the Annual 15(c) Process. After the August 2, 2023 and August 18, 2023 meetings, the Independent Trustees asked Matthews to provide certain additional information and to respond to certain additional questions at the Meeting. The Independent Trustees then reviewed this supplemental information, which was provided prior to and at the Meeting. The Independent Trustees discussed the renewal of the Management Agreement with representatives of Matthews and among themselves in private sessions on various occasions at which no representatives of Matthews were present.

In addition, the Board received presentations about the Funds throughout the year from management. Among the information considered by the Board were responses to a detailed information request sent on behalf of the Independent Trustees by their independent legal counsel. Matthews furnished extensive information in response to this request with respect to many subjects relating to the Management Agreement and other related agreements and addressed many of the factors discussed below, including, but not limited to, information about the services provided by Matthews, its structure, organization, operations and

personnel, the financial condition of Matthews and the profitability to Matthews from the Management Agreement, compliance procedures and resources, investment performance of the Funds, expenses of the Funds, brokerage and portfolio transactions, distribution and marketing of the Funds, relationships with Authorized Participants and market makers, and other information considered relevant.

In considering information relating to management fee levels, the Board took into account that the Funds pay Matthews a single unitary fee and that Matthews is responsible for payment of all ordinary fund expenses out of the unitary fee. The Board considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market that the Funds operate in. The Board noted that the current almost universal practice among exchange-traded funds was to charge a single unitary fee and therefore considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds. The Board also received, and considered to the extent they thought relevant, information provided by Matthews as to Fund management services and fees as compared to advisory services and fees charged by Matthews to its open-end mutual funds, institutional clients and pooled vehicles organized outside of the United States. The Trustees also considered information provided by an independent data provider, Broadridge, comparing the investment performance and the fee and expense levels of each Fund to appropriate peer groups of funds, as well as performance data provided by Matthews with respect to unmanaged benchmarks and pooled vehicles or other accounts managed by Matthews with similar investment objectives and/or strategies to the Funds, as applicable.

The Independent Trustees also considered that they had engaged an independent data provider, Broadridge, to assist them in their Annual 15(c) Process. The Independent Trustees considered the work and analysis performed by the independent data provider in selecting appropriate peer groups for the Funds. Furthermore, throughout the course of the year, the Board received a wide variety of materials relating to the services provided by Matthews, including reports on each Fund’s investment results, portfolio composition, portfolio trading practices, and other information relating to the nature, extent, and quality of services provided by Matthews to the Funds. The Board also considered that, under the Management Agreement and as part of the unitary management fee, Matthews provides additional services to the Funds that are essential to the operation of the Funds.

In addition to the information furnished by Matthews, the Trustees were provided with a legal memorandum from their independent legal counsel discussing their fiduciary duties related to their approval of the continuation of the Management Agreement and discussed these matters with their counsel. The Board’s consideration of all this information, both at the Meeting and throughout the year, is part of a systematic process that it has used, and continues to use, with regard to the Annual 15(c) Process.


				matthewsasia.com \| 833.228.5605			79

Approval of Investment Management Agreement (unaudited) (continued)

The Trustees’ determinations at the Meeting were made on the basis of each Trustee’s business judgment after consideration of all the information presented. In deciding to recommend the renewal of the Management Agreement with respect to each Fund, the Independent Trustees did not identify any single factor or particular piece of information that, in isolation, was controlling. Each Independent Trustee may also have weighed factors differently. This summary describes the most important, but not all, of the factors considered by the Board and the Independent Trustees.

1.	The nature, extent and quality of the services provided by Matthews under the Management Agreement.

The Trustees considered the overall financial strength and long-term stability of Matthews and its ability to continue to provide a high level and high quality of services to the Funds. The Trustees considered that despite recent challenging conditions with respect to revenues and profitability of the organization, which have been caused by contracting revenues and assets under management, a difficult geopolitical environment and market volatility, Matthews has continued to provide high quality services to the Funds. They considered Matthews’ services provided to the Trust and noted that past periods of volatile and challenging securities markets had not resulted in a diminution of services to the Trust and that Matthews has always demonstrated a commitment to employ the resources necessary to maintain the high level of quality and services to the Trust’s family of funds. The Trustees positively viewed Matthews’ emphasis on preserving and enhancing portfolio management team resources, and careful business planning and management.

The Trustees considered the experience and qualifications of the executive and portfolio management personnel at Matthews who are responsible for providing services to the Funds and who are responsible for the daily management of the Funds’ portfolios. The Trustees noted that Matthews had experienced some turnover at the senior executive and professional staff levels in recent years. In this regard, the Trustees reviewed with Matthews the efforts undertaken to replace staff where appropriate and to otherwise minimize its impact on the Funds, including enhancements to the portfolio management teams of certain Funds. They also reviewed Matthews’ retention strategies and recent personnel developments relevant to certain of the Funds. They discussed efforts by Matthews to provide appropriate support to the Funds, including, but not limited to, appropriate back-up support for each Fund such as, but not limited to, enhancing the structure of the portfolio management teams to better recognize Matthews’ bench of talent, and ensuring succession plans are put in place. Among the improved capabilities noted by the Independent Trustees over the past several years are enhanced risk analytical resources and related professionals, including ongoing enhancements to compliance, risk management, technology, business infrastructure, operations, marketing and client service, as well as enhancements to valuation practices.

The Trustees considered the technical capabilities of Matthews, including the design and implementation of its disaster recovery and business continuity infrastructure. The Trustees also considered the Chief Compliance Officer’s report regarding Matthews’ compliance resources, risk assessment and other compliance initiatives and programs. The Trustees concluded that Matthews has implemented a robust and diligent compliance process, and demonstrates a strong commitment to a culture of compliance. The Independent Trustees took into consideration Matthews’ description of its supervision of the activities of the Funds’ various service providers, as well as supporting the Independent Trustees’ responsibilities and requests and its responsiveness to questions and/or concerns raised by the Trustees throughout the year.

The Trustees concluded that Matthews had the quality of personnel and other investment resources essential to performing its duties under the Management Agreement, and that the nature, overall quality, cost and extent of such management services are satisfactory.

2.	The investment performance of the Funds.

The Trustees reviewed the performance of each Fund on both an absolute basis and in comparison to appropriate peer funds, benchmark indices and to the extent they exist, Matthews’ similarly managed accounts, for the period since the Funds’ inception through June 30, 2023. The Trustees considered investment results in light of each Fund’s objective, strategies and market conditions, noting periods during which there were challenging investment conditions in various Asian and emerging markets. The Independent Trustees reviewed information as to peer group selections presented by Broadridge. In doing so, the Trustees recognized and took into account that the specialized nature of the Funds made it sometimes difficult to fairly benchmark performance against peers and also took into account that certain funds had a very limited universe of peers. The Board also considered that the Funds had investment objectives, goals and strategies that were very different from non-managed broad-based benchmarks, which rendered performance comparisons against such broad-based benchmarks of lesser utility. In this regard, the Board took into account that the Funds are not designed to perform like broad-based indices and therefore that most investors in the Funds likely are not seeking to achieve benchmark-like returns.

The Trustees reviewed each Fund’s performance on a case-by-case basis and noted that the Funds had commenced operations in July 2022 and therefore had only limited performance history to review. The Board also took into account that each Fund’s track record was measured as of a specific ending date, and that track records can vary as of different measurement dates. Therefore, in reviewing a Fund that is


80		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited) (continued)

currently underperforming, the Trustees also considered the market conditions experienced during the period under review, as well as the outlook for the Fund going forward in light of expected future market conditions.

For Matthews Asia Innovators Active ETF, the Trustees noted that the Fund’s performance ranked in the fifth quintile for the since-inception period. The Trustees also noted that the Fund underperformed the median of its peer group for same period. The Board considered Matthews’ discussion regarding the factors contributing to underperformance and efforts undertaken to improve performance and also noted the limited operating history of the Fund.

For Matthews China Active ETF, the Trustees noted that the Fund’s performance ranked in the second quintile for the since-inception period. The Trustees also noted that the Fund outperformed the median of its peer group for same period. The Board further noted the limited operating history of the Fund.

For Matthews Emerging Markets Equity Active ETF, the Trustees noted that the Fund’s performance ranked in the third quintile for the since-inception period. The Trustees also noted that the Fund outperformed the median of its peer group for same period. The Board further noted the limited operating history of the Fund.

After review, the Trustees concluded that each Fund’s overall performance was satisfactory or was being addressed as needed. The Trustees also reviewed Matthews’ trading policies and efforts to obtain best overall execution for the Funds in the various markets in which the Funds trade securities. The Trustees noted Matthews’ consistent adherence to its long-standing investment approach, which emphasizes fundamental bottom-up driven investment selection in light of its view of regional economic conditions.

3.	The extent to which Matthews realizes economies of scale as the Funds grow larger and whether Fund investors benefit from any economies of scale.

The Trustees considered that because the Funds are newly launched, they are not expected to recognize economies of scale for some time. The Trustees noted that they expect to monitor each Fund’s growth and evaluate economies of scale at future renewals of the Management Agreement in effect at that time. The Trustees further noted that each Fund benefits from existing economies of scale through relatively low fee rates established at inception, as well as through additional investment in the Trust’s business and the provision of improved or additional infrastructure and services to the

Funds and their shareholders. The Trustees discussed Matthews’ ongoing investment in its technology, systems, staffing and other aspects of its business that can benefit the Funds, noting that all these endeavors are a means by which Matthews is sharing economies of scale with the Funds and their shareholders through reinvestment in products and services that are designed to benefit the Funds and their shareholders. The Trustees considered the new personnel hired over recent years, as well as planned hiring, and the extent to which that hiring could be expected to benefit shareholders. As a result, the Trustees remain satisfied about the extent to which economies of scale are being and will continue to be shared with the Funds and their shareholders.

4.	The costs of the services provided by Matthews and others.

The Trustees considered the unitary fee, which was the total expense ratio of each Fund. The Board also considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market that the Funds operate in. The Board considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds in each Fund’s relevant peer group. The Trustees reviewed information developed by Broadridge as to appropriate peer groups for each Fund for these purposes.

The Trustees also received, and considered to the extent they thought relevant, information relating to the estimated management fees and total expenses of the Funds in comparison to the advisory fees and other fees and expenses of other existing series of the Trust, noting that, as compared to the other series of the Trust that are operated as mutual funds, the Funds have a unitary management fee structure that covers most of the ordinary operating expenses of the Funds.

The Trustees also compared the Funds unitary fee with the advisory or management fee charged by Matthews for its separate accounts and other investment products. The Trustees considered Matthews’ explanations as to the differences in services between these products and the Funds, including the differences in the frequency of net asset value calculations and other operational and compliance activities.

The Trustees’ overall assessment with respect to each Fund was that, taking into account the considerations noted below, the total expense ratio to be paid by investors in the Fund, which is most representative of an investor’s net experience, was fair and reasonable.

For the Matthews Asia Innovators Active ETF, the actual management fee was above the peer group median and the contractual management fee was slightly above the peer group median. The actual total expenses were above the peer group median.

For the Matthews China Active ETF, the actual management fee was above the peer group median and the contractual management fee was above the peer group median. The actual total expenses were above the peer group median.


				matthewsasia.com \| 833.228.5605			81

Approval of Investment Management Agreement (unaudited) (continued)

For the Matthews Emerging Markets Equity Active ETF, the actual management fee was above the peer group median and the contractual management fee was above the peer group median. The actual total expenses were slightly below the peer group median.

The Trustees reviewed information provided by Matthews regarding the costs of sponsoring and operating the Funds and information regarding the profitability to Matthews of the Management Agreement both on a fund-by-fund basis and overall for the family of Funds. In considering profitability, the Trustees discussed and considered the methodology employed by Matthews in calculating profit margins but also considered other elements relevant to discussions of profitability, such as the entrepreneurial risk undertaken by Matthews in sponsoring and maintaining the Funds. The Trustees recognized that, as new funds with a unitary fee structure, it is unlikely that a Fund will generate profits for Matthews initially and may not do so until the Fund has experienced some significant growth.

The Trustees noted that Matthews has experienced reduced profitability this past year as overall assets under management have fallen significantly due to continued risk off sentiment in the asset class but still appeared to be sufficiently profitable to operate as a viable investment management firm, able to honor its obligations as a sponsor of the Funds, including the Funds that did not generate a profit for Matthews, without earning excessive profits from any particular Fund or from the overall relationship with the Funds. The Trustees noted that, with fluctuations in asset levels in the Trust in recent years, heightened volatility in revenues and profitability could be expected from time to time in the future, but they also noted the increased cost control measures by Matthews with certain continued expenditures on

personnel and other resources where appropriate. The Board also considered information relating to the profitability of a limited number of publicly traded investment advisers, although the Board noted that this information was of limited utility because it was comprised of a limited universe of advisers, did not provide any information as to how profitability was determined and did not limit profitability analysis to the performance of advisory services to registered investment companies. The Board further noted that these advisers differed significantly from Matthews because they were not solely dedicated to investment in the Asian and emerging markets.

Based on information received, the Trustees noted that Matthews’ overall profitability from the Management Agreement appeared not to be excessive at the current time.

5.	Ancillary benefits.

6.	Conclusions.

Based on their review, including their consideration of each of the factors referred to above, and assisted by the advice of independent counsel to the Independent Trustees, the Board, including the Independent Trustees, concluded that the Management Agreement was fair and reasonable with respect to each Fund and its shareholders, and that the renewal of the Management Agreement would be in the best interests of each Fund and its shareholders. The Board did not indicate that any single factor was determinative of its decision to approve the Management Agreement, but indicated that the Board based its determination on the total mix of information available to it.


82		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited)

Matthews Emerging Markets Sustainable Future Active ETF

Matthews Pacific Tiger Active ETF

Matthews India Active ETF

Matthews Japan Active ETF

Matthews Asia Dividend Active ETF

At a meeting held on August 23-24, 2023 (the “Meeting”), the Board, including all of the Independent Trustees, approved the Management Agreement for an initial two-year term from September 20, 2023 through September 19, 2025 with respect to each Fund.

At the Meeting and at a prior meeting of the Independent Trustees on July 6, 2023, the Board received and considered information (both written and oral) provided to assist it in the review of the Management Agreement and made assessments with respect to each Fund individually. The Independent Trustees were advised by independent legal counsel with respect to these matters. The Independent Trustees discussed the approval of the Management Agreement with representatives of Matthews and among themselves in private sessions on various occasions at which no representatives of Matthews were present.

In addition, the Board received presentations about the Trust and its other series throughout the year from management. That other information considered by the Board addressed many of the factors discussed below, including, but not limited to, information about the services provided by Matthews, its structure, organization, operations and personnel, the financial condition of Matthews and the profitability to Matthews from the Management Agreement, compliance procedures and resources, investment performance of other series and any similar strategies, expected expenses of the Funds, planned distribution and marketing of the Funds, relationships with Authorized Participants and market makers, and other information considered relevant.

In considering information relating to management fee levels, the Board took into account that the Funds would pay Matthews a single unitary fee and that Matthews would be responsible for payment of all ordinary fund expenses out of

the unitary fee. The Board considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market in which the Funds would operate. The Board noted that the current almost universal practice among exchange-traded funds was to charge a single unitary fee and therefore considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds. The Board also received, and considered to the extent it thought relevant, information provided by Matthews as to Fund management services and fees as compared to advisory services and fees charged by Matthews to its open-end mutual funds, institutional clients and pooled vehicles organized outside of the United States. The Trustees also considered information comparing the proposed fee and expense levels of each Fund to appropriate peer groups of funds, as well as performance data provided by Matthews with respect to unmanaged benchmarks and pooled vehicles or other accounts managed by Matthews with similar investment objectives and/or strategies to the Funds, as applicable.

Furthermore, throughout the course of the year, the Board received a wide variety of materials relating to the services provided by Matthews, and relating to the nature, extent, and quality of services that would be provided by Matthews to the Funds. The Board also considered that, under the Management Agreement and as part of the unitary management fee, Matthews would provide additional services to the Funds that are essential to the operation of the Funds.

The Trustees’ determinations at the Meeting were made on the basis of each Trustee’s business judgment after consideration of all the information presented. In deciding to recommend the approval of the Management Agreement with respect to each Fund, the Independent Trustees did not identify any single factor or particular piece of information that, in isolation, was controlling. Each Independent Trustee may also have weighed factors differently. This summary describes the most important, but not all, of the factors considered by the Board and the Independent Trustees.

1.	The nature, extent and quality of the services provided by Matthews under the Management Agreement.

The Trustees considered the overall financial strength and long-term stability of Matthews and its ability to provide a high level and high quality of services to the Funds. The Trustees considered that despite recent challenging conditions with respect to revenues and profitability of the organization, which have been caused by contracting revenues and assets under management, a difficult geopolitical environment and market volatility, Matthews has the resources to provide high quality services to the Funds. They


				matthewsasia.com \| 833.228.5605			83

Approval of Investment Management Agreement (unaudited) (continued)

considered Matthews’ services provided to the Trust and noted that past periods of volatile and challenging securities markets had not resulted in a diminution of services to the Trust and that Matthews has always demonstrated a commitment to employ the resources necessary to maintain the high level of quality and services to the Trust’s family of funds. The Trustees positively viewed Matthews’ emphasis on preserving and enhancing portfolio management team resources, and careful business planning and management.

The Trustees considered the experience and qualifications of the executive and portfolio management personnel at Matthews who would be responsible for providing services to the Funds and who are responsible for the daily management of the Funds’ portfolios. The Trustees noted that Matthews had experienced some turnover at the senior executive and professional staff levels in recent years. In this regard, the Trustees reviewed with Matthews the efforts undertaken to replace staff where appropriate and to otherwise minimize its impact on the Trust, including enhancements to the portfolio management teams of certain funds. They also reviewed Matthews’ retention strategies and recent personnel developments relevant to the Trust. They discussed efforts by Matthews to provide appropriate support to the Trust, including, but not limited to, appropriate back-up support such as, but not limited to, enhancing the structure of the portfolio management team to fully recognize Matthews’ bench of talent, and ensuring succession plans are put in place. Among the improved capabilities noted by the Independent Trustees over the past several years are enhanced risk analytical resources and related professionals, including ongoing enhancements to compliance, risk management, technology, business infrastructure, operations, marketing and client service, as well as enhancements to valuation practices.

The Trustees considered the technical capabilities of Matthews, including the design and implementation of its disaster recovery and business continuity infrastructure. The Trustees also considered the Chief Compliance Officer’s report regarding Matthews’ compliance resources, risk assessment and other compliance initiatives and programs. The Trustees concluded that Matthews has implemented a robust and diligent compliance process, and demonstrates a strong commitment to a culture of compliance. The Independent Trustees took into consideration Matthews’ description of its supervision of the activities of the Funds’ various service providers, as well as supporting the Independent Trustees’ responsibilities and requests and its responsiveness to questions and/or concerns raised by the Trustees throughout the year.

The Trustees concluded that Matthews had the quality of personnel and other investment resources essential to performing its duties under the Management Agreement, and

that the nature, overall quality, cost and extent of such management services are satisfactory.

2.	The investment performance of the Funds.

The Trustees considered the performance of other series of Trust with similar strategies, on both an absolute basis and in comparison to appropriate peer funds, benchmark indices and to the extent they exist, Matthews’ similarly managed accounts, for various periods. The Trustees considered those investment results in light of each Fund’s objective, strategies and market conditions, noting periods during which there were challenging investment conditions in various Asian and emerging markets. The Board also considered that the Funds had investment objectives, goals and strategies that were very different from non-managed broad-based benchmarks, which rendered performance comparisons against such broad-based benchmarks of lesser utility. In this regard, the Board took into account that the Funds are not designed to perform like broad-based indices and therefore that most investors in the Funds likely are not seeking to achieve benchmark-like returns.

After review, the Trustees concluded that each Fund has the potential to achieve acceptable performance. The Trustees also reviewed Matthews’ trading policies and ability to obtain best overall execution for the Funds in the various markets in which the Funds trade securities. The Trustees noted Matthews’ consistent adherence to its long-standing investment approach, which emphasizes fundamental bottom-up driven investment selection in light of its view of regional economic conditions.

3.	The extent to which Matthews realizes economies of scale as the Funds grow larger and whether Fund investors benefit from any economies of scale.

The Trustees considered that because the Funds would be newly launched, they are not expected to recognize economies of scale for some time. The Trustees noted that they expect to monitor each Fund’s growth and evaluate economies of scale at future renewals of the Management Agreement in effect at that time. The Trustees further noted that each Fund benefits from existing economies of scale through relatively low fee rates established at inception, as well as through additional investment in the Trust’s business and the provision of improved or additional infrastructure and services to the Funds and their shareholders. The Trustees discussed Matthews’ ongoing investment in its technology, systems, staffing and other aspects of its business that can benefit the Funds, noting that all these endeavors are a means by which Matthews is sharing economies of scale with the Funds and their shareholders through reinvestment in products and services that are designed to benefit the Funds and their shareholders. The Trustees considered the new personnel hired over recent years, as well as planned hiring, and the extent to which that hiring could be expected to benefit shareholders. As a result, the Trustees remain satisfied about the extent to which economies of scale are being and will continue to be shared with the Funds and their shareholders.


84		MATTHEWS ASIA FUNDS

Approval of Investment Management Agreement (unaudited) (continued)

4.	The costs of the services provided by Matthews and others.

The Trustees considered the unitary fee, which is the total expense ratio of each Fund. The Board also considered that Matthews had aimed to provide an estimate of that portion of the unitary fee that might be considered to constitute payment for advisory services, but noted that such estimates were imprecise and not representative of the different market in which the Funds operate. The Board considered as highly relevant the unitary fees charged by other similarly managed exchange-traded funds in each Fund’s relevant peer group.

The Trustees also compared the Funds unitary fee with the advisory or management fee charged by Matthews’ for its separate accounts and other investment products. The Trustees considered Matthews’ explanations as to the differences in services between these products and the Funds, including the differences in the frequency of net asset value calculations and other operational and compliance activities.

The Trustees recognized that, as new funds with a unitary fee structure, it is unlikely that a Fund will generate profits for Matthews initially and may not do so until the Fund has experienced some significant growth.

The Trustees noted that Matthews has experienced reduced profitability this past year as overall assets under management have fallen due to continued risk off sentiment in the asset class but still appeared to be sufficiently profitable to operate as a viable investment management firm, able to honor its obligations as a sponsor of the Funds, including the funds that do not generate a profit for Matthews. The Trustees noted that, with fluctuations in asset levels in the Trust in recent years, heightened volatility in revenues and profitability could be expected from time to time in the future, but they also noted the increased cost control measures by Matthews with certain continued expenditures on personnel and other resources where appropriate.

Based on information received, the consensus of the Trustees was that Matthews’ expected overall profitability from the Management Agreement with respect to the Funds would not be excessive in the foreseeable future.

5.	Ancillary benefits.

6.	Conclusions.

Based on their review, including their consideration of each of the factors referred to above, and assisted by the advice of independent counsel to the Independent Trustees, the Board, including the Independent Trustees, concluded that the Management Agreement would be fair and reasonable with respect to each Fund and its shareholders, and that the approval of the Management Agreement would be in the best interests of each Fund and its shareholders. The Board did not indicate that any single factor was determinative of its decision to approve the Management Agreement, but indicated that the Board based its determination on the total mix of information available to it.


				matthewsasia.com \| 833.228.5605			85

Statement Regarding Liquidity Risk Management Program

The Board of Trustees (the “Board”) of the Matthews International Funds (the “Funds”) met on November 15, 2023 (the “Meeting”) to review the Program, in accordance with the requirements of the Liquidity Rule. The Board has appointed the Liquidity Risk Management Committee (“LRMC”), a sub-committee of the Enterprise Risk Management Committee of Matthews International Capital Management, LLC, as Program Administrator.

At the Meeting, the LRMC provided the Board with a report that addressed the operation of the Program and assessed its adequacy and effectiveness of implementation, including, if applicable, the operation of the Highly Liquid Investment Minimum (“HLIM”) and any material changes to the Program (the “Report”). The Report covered the period from October 1, 2022, through October 31, 2023 (the “Program Reporting Period”).

The Report included a portfolio liquidity profile of each Fund as of October 31, 2023. The Report also discussed, among other things, the factors and assumptions considered in establishing a Fund’s HLIM and Reasonably Anticipated Trading Size; the results of stress tests designed to assess liquidity under hypothetical stressed scenarios; and the impact of local holidays in non-US jurisdictions. The Board approved revisions to the Funds’ RATS and HLIM at the Meeting


86		MATTHEWS ASIA FUNDS

Trustees and Officers of the Funds (unaudited)

The operations of each Fund are under the direction of the Board of Trustees. The Board of Trustees establishes each Fund’s policies and oversees and reviews the management of each Fund. The Board meets regularly to review the activities of the officers, who are responsible for the day-to-day operations of the Funds. The Statement of Additional Information, which includes additional information about Fund Trustees, is available without charge by calling 833.228.5605 or by visiting the Funds’ website, matthewsasia.com. The Trustees and executive officers of the Funds, their year of birth, business address, principal occupations during the past five years and other trusteeships/directorships are set forth below:


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INDEPENDENT TRUSTEES

GALE K. CARUSO Born 1957 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Chair of the Board of Trustees and Trustee	Trustee since 2015, Vice Chair (2021), and Chair of the Board since 2022	Formerly President and Chief Executive Officer (1999–2003), Zurich Kemper Life (life insurance and annuities); Chairman, President and Chief Executive Officer (1994–1999), Scudder Canada Investor Services, Ltd. (investment management); Managing Director (1986–1999), Scudder Kemper Investments, Inc. (investment management).	23	Trustee (since 2006), Pacific Select Funds (47 Portfolios); Member, Board of Governors (since 2022), Investment Company Institute; Member, Governing Council (since 2016), Independent Directors Council; Director (2005-2012), Make-A-Wish of Maine.

NEAL ANDREWS* Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2024	Managing Director, BlackRock Inc. (2006–2020), Chief Financial Officer BlackRock Funds (2007–2020) and BlackRock iShares (2019); Senior Vice President and Line of Business Head, Accounting and Administration, PFPC Inc. (1992–2006); Senior Auditor, Price Waterhouse LLP (1987–1992).	23	Segall Bryant & Hamill Funds Trust (2023), (16 Portfolios)

CHRISTOPHER LEE Born 1967 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2015	Consultant and Associate Professor (since 2017), Hong Kong University of Science and Technology; Lecturer (part-time) (2013–2019), The Chinese University of Hong Kong; Private Investor and Partner (since 2012), FAA Investments (financial holding company); Managing Director, Asia Region, and Head of Global Markets Investment Products & db-X (2010–2012), Deutsche Bank AG (financial services); Managing Director, Equity Risk Management Products, and Head of Intermediary Business (2002–2010), UBS AG (financial services); Vice President, Global Markets & Investment Bank (2000–2002), Vice President, International Private Clients Group (1997–2000), Associate, Debt and Equity Markets Group (1995–1997), Merrill Lynch & Co., Inc. (brokerage and investment management).	23	Director (since 2017), Hong Kong Securities and Investment Institute; Director (2013–2018), Asian Master Funds (Australia) (1 Portfolio); Trustee (2013-2022), African Wildlife Foundation; Trustee (2010–2016), Oakland Museum of California.

RICHARD K. LYONS Born 1961 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2010	Chief Innovation and Entrepreneurship Officer (since 2020), UC Berkeley; Dean (2008–2018), Haas School of Business, UC Berkeley; Chief Learning Officer (2006–2008), Goldman Sachs (investment banking and investment management).	23	Trustee (since 2018), Syntax ETF Trust; Trustee (2001–2006), Barclays Global Investor Funds and Master Investment Portfolios (15 Portfolios); Trustee (2000–2006), iShares, Inc. (24 Portfolios) and iShares Trust (over 70 Portfolios); Trustee (1994–2006) and Chairman of the Board (2000–2006), Matthews Asia Funds (9 Portfolios).

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.

*	Effective January 1, 2024.


				matthewsasia.com \| 833.228.5605			87

Trustees and Officers of the Funds (unaudited) (continued)


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INDEPENDENT TRUSTEES

RHODA ROSSMAN Born 1958 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Since 2006	Council Member (since 2019), California Catastrophe Response Council; Vice President, Corporate Investment Officer (2007–2010), Senior Vice President and Treasurer (2003–2007), The PMI Group, Inc. (mortgage insurer).	23

JONATHAN F. ZESCHIN Born 1953 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee	Trustee since 2007 and Chair of the Board (2014–2021)	Partner (since 2009), Essential Investment Partners, LLC (investment advisory and wealth management).	23	Trustee (2019), Russell Investment Funds (9 portfolios) and Russell Investment Company (32 portfolios).

Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Trustee	Other Trusteeships/Directorships (number of portfolios) Held by Trustee
INTERESTED TRUSTEES²

JAMES COOPER ABBOTT Born 1969 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Trustee and President	Trustee and President since 2022	Director and Chief Executive Officer (since 2022), Matthews (investment management); Chairman and Chief Executive Officer/President (2009–2022), Carillon Tower Advisers, Inc. and Affiliates (asset management); Chief Executive Officer/President (2009–2022), Eagle Asset Management, Inc. (asset management); President (2003–021), Carillon Family of Funds (mutual fund company); President (2008–2019) Eagle Boston Investment Management, Inc. (asset management); Managing Member (2010–2022) Alternative Strategy Partnerships (asset management).	23	Director (since 2023), Matthews Asia Funds SICAV (Luxembourg)(investments);

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.

2	A trustee is considered an “interested person” of the Trust as defined under the 1940 Act because of an ownership interest in the Advisor or an office held with the Trust or the Advisor.


88		MATTHEWS ASIA FUNDS

Trustees and Officers of the Funds (unaudited) (continued)


Name, Year of Birth, Address and Position(s) Held with Trust	Term of Office and Length of Time Served¹	Principal Occupation(s) During Past 5 Years	Other Trusteeships/ Directorships (number of portfolios) Held by Officer
OFFICERS WHO ARE NOT TRUSTEES

JOHN P. McGOWAN Born 1964 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President and Secretary	Since 2005	Head of Fund Administration (since 2009), Chief Administrative Officer (2007–2008), Chief Operating Officer (2004–2007), Matthews (investment management); Vice President and Secretary (2013–2017), Matthews A Share Selections Fund, LLC (registered investment company); Director (since 2010), Matthews Asia Funds SICAV (Luxembourg) (investments); Director (2010–2020), Matthews Global Investors S.à r.l. (Luxembourg) (investment management); Director (2004–2023), Matthews Asian Selections Funds, PLC (Ireland) (investments).	None

SHAI A. MALKA Born 1973 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Treasurer	Since 2005	Vice President of Fund Accounting and Operations (since 2010), Senior Manager of Fund Accounting and Operations (2004–2009), Matthews (investment management); Treasurer (2013–2017), Matthews A Share Selections Fund, LLC (registered investment company).	None

LISA NICOSIA Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Chief Compliance Officer and Anti-Money Laundering Officer	Since 2023	Chief Compliance Officer and Anti-Money Laundering Officer (since 2023), Matthews Asia Funds (registered investment company); Vice President (2014-2022), Goldman Sachs (investment management).	None

J. DAVID KAST Born 1966 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2018	Chief Compliance Officer and Anti-Money Laundering Officer (since 2018), Global Head of Risk and Compliance (since 2017), Matthews (investment management); Managing Director (2009–2017), Goldman Sachs (investment management).	None

DEEPA DAMRE SMITH Born 1975 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2022	General Counsel (since 2022), Matthews (investment management); Managing Director (2014–2022), Director (2009–2013), BlackRock (investment management); Principal (2004–2009), Barclays Global Investors (investment management).	None

SEAN TAYLOR Born 1967 Four Embarcadero Center Suite 550 San Francisco, CA 94111 Vice President	Since 2023	Portfolio Manager (since 2023), Matthews (investment management); Chief Investment Officer for APAC (2014–2023), Global Head of Emerging Markets (2014-2023), DWS Group (investment management); Head of Emerging Markets (2013-2023), Deutsche Asset and Wealth Management (investment management).	None

1	Each Trustee serves for an indefinite term until his/her successor is elected and qualified or until his/her retirement, death, resignation or removal in accordance with the Trust’s policies. Officers serve at the pleasure of the Board of Trustees.


				matthewsasia.com \| 833.228.5605			89

LOGO


Matthews Asia Funds

INVESTMENT ADVISOR Matthews International Capital Management, LLC Four Embarcadero Center, Suite 550 San Francisco, CA 94111 833.228.5605	ADMINISTRATOR, CUSTODIAN & TRANSFER AGENT BNY Mellon 240 Greenwich St. New York, NY 10007	LEGAL COUNSEL Paul Hastings LLP 101 California Street, 48th Floor San Francisco, CA 94111

LOGO

P.O. Box 9791 | Providence, RI 02940 | matthewsasia.com | 833.228.5605

Matthews Asia Funds are distributed in the United States by Foreside Funds Distributors LLC, Portland, Maine

Matthews Asia Funds are distributed in Latin America by Picton S. A.

LOGO

AR-ETF-1223

(b) Not applicable.

Item 2. Code of Ethics.

(a)

The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

(c)

There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description.

(d)

The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item’s instructions.

Item 3. Audit Committee Financial Expert.

(a)(1)

As of the end of the period covered by the report, the registrant’s board of directors has determined that the registrant has three audit committee financial experts serving on its audit committee.

(a)(2)

The audit committee financial experts are Christopher F. Lee, Jonathan F. Zeschin, and Richard K. Lyons, each of whom is “independent.”

(b)

Mr. Lee is an associate professor (part-time) of science practice in financial mathematics at the Hong Kong University of Science & Technology where he teaches courses in capital markets and risk management. In addition, Mr. Lee was the chairman and currently is a member of the Audit Committee of Hong Kong Securities and Investment Institute (HKSI). HKSI conducts all the licensing examinations and professional development of securities professionals in Hong Kong. Since HKSI receives funding from the Securities and Futures Commission and the Financial Services & Treasury Bureau of Hong Kong, the Audit Committee must provide the oversight in selecting professional auditing firms and preparing annual financial reports that are in compliance with government rules and regulations. Furthermore, Mr. Lee has served as a member of the Audit Committee at other large organizations such as the Oakland Museum of California and the Washington DC based African Wildlife Foundation. Mr. Lee was designated as Chair of the Audit Committee of Matthews International Funds on November 19, 2020.

Mr. Zeschin is Partner of Essential Investment Partners, LLC, a wealth management and investment advisory firm. He is also the portfolio manager for that firm’s Essential Growth Portfolio. Essential Investment Partners, LLC succeeded to the business of Essential Advisers, Inc. Prior to forming Essential Advisers, Inc., Mr. Zeschin held senior executive positions with Founders Asset Management, Inc., Invesco Funds Group, and Stein Roe & Farnham, Inc. Mr. Zeschin holds a Masters of Management from the Kellogg School at Northwestern University, with majors in Finance and Marketing, and a Bachelor in Business Administration in Accounting with distinction from the University of Michigan. He holds a Certified Public Accountant license from the state of Colorado and is a Certified Financial Planner certificant. Mr. Zeschin is a former chair of the ICI’s Accounting Treasurer’s Committee and a former member of the AICPA Investment Companies committee. Mr. Zeschin was previously the chairman of the Board of Trustees of two NYSE listed closed-end funds. He has served on the audit committees of mutual fund boards since 2002. He has experience analyzing and evaluating financial statements at the appropriate level of complexity through his professional activities referenced above. Mr. Zeschin has gained additional accounting expertise as a member of the Audit Committee of Matthews International Funds.

Mr. Lyons is a Professor of Finance and Economics at the Haas School of Business at the University of California, Berkeley, and has served as the university’s Chief Innovation and Entrepreneurship Officer since 2020. Mr. Lyons oversaw the accounting and finance functions at the Haas School of Business when he served as Dean from 2008 to 2018. From 2006 to 2008 Mr. Lyons was on leave from UC Berkeley to serve as Chief Learning Officer at Goldman Sachs. In that role he interacted regularly with the leadership of the Securities Division, which oversees all Sales and Trading at Goldman Sachs. His teaching is primarily in International Finance and Currency Markets in both the MBA and Master’s in Financial Engineering programs. These courses include content on international accounting standards. His research for over two decades has been on the functioning of currency markets and, more recently, on the functioning of cryptocurrency markets.

Item 4. Principal Accountant Fees and Services.

Audit Fees

(a)

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $651,600 in 2022 and $755,200 in 2023.

Audit-Related Fees

(b)

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item are $0 in 2022 and $0 in 2023.

Tax Fees

(c)

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $170,400 in 2022 and $212,120 in 2023. Tax fees include services provided by the principal accountant for tax return preparations.

All Other Fees

(d)

The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 in 2022 and $0 in 2023.

(e)(1)

Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

Pre-Approval of Auditor Services.

Pre-Approval Requirements. Before the Auditor is engaged by the Trust to render audit related or permissible non-audit services, either:

(i)

The Audit Committee shall pre-approve all audit related services and permissible non-audit services (e.g., tax services) to be provided to the Trust; or

(ii)

The Audit Committee shall establish policies and procedures governing the Auditor’s engagement. Any such policies and procedures must (1) be detailed as to the particular service and (2) not involve any delegation of the Audit Committee’s responsibilities to the Adviser. The Audit Committee may delegate to one or more of its members the authority to grant pre-approvals. The pre-approval policies and procedures shall include the requirement that the decisions of any member to whom authority is delegated under this Section 4(e) shall be presented to the full Audit Committee at its next scheduled meeting.

De Minimis Exceptions to Pre-Approval Requirements. Pre-approval for a service provided to the Trust other than audit, review or attest services is not required if: (1) the aggregate amount of all such non-audit services provided to the Trust constitutes not more than 5 percent of the total amount of revenues paid by the Trust to the Auditor during the fiscal year in which the non-audit services are provided; (2) such services were not recognized by the Trust at the time of the engagement to be non-audit services; and (3) such services are promptly brought to the attention of the Audit Committee and are approved by the Audit Committee or by one or more members of the Audit Committee to whom authority to grant such approvals has been delegated by the Audit Committee.

Pre-Approval of Non-Audit Services Provided to the Adviser and Certain Control Persons. With respect to services that have a direct impact on the operations or financial reporting of the Trust, the Audit Committee shall pre-approve all such non-audit services proposed to be provided by the Auditor to (i) the Adviser and (ii) any entity controlling, controlled by, or under common control with the Adviser that provides ongoing services to the Trust.

Application of De Minimis Exception: The de minimis exceptions set forth above under Section 4(e)(ii) apply to pre-approvals under this Section 4(e)(iii) as well, except that the “total amount of revenues” calculation for Section 4(e)(iii) services is based on the total amount of revenues paid to the Auditor by the Trust and any other entity that has its services approved under this Section (i.e., the Adviser or any control person).

(e)(2)

The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:

(b) Not Applicable

(d) Not Applicable

(f)

The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

(g)

The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $277,237 in 2022 and $281,814 in 2023.

(h)

The registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

(i)

Not applicable.

(j)

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a)	Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1(a) of this form.

(b)	Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item.

Item 11. Controls and Procedures.

(a)

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.


(a)(1)		Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto.

(a)(2)		Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(2)(1)		Not applicable.

(a)(2)(2)		Not applicable.

(b)		Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)		Matthews International Funds

By (Signature and Title)*		/s/ J. Cooper Abbott
		J. Cooper Abbott, President
		(principal executive officer)

Date		March 8, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By (Signature and Title)*		/s/ J. Cooper Abbott
		J. Cooper Abbott, President
		(principal executive officer)

Date		March 8, 2024

By (Signature and Title)*		/s/ Shai Malka
		Shai Malka, Treasurer
		(principal financial officer)

Date		March 8, 2024

^*	Print the name and title of each signing officer under his or her signature.

Matthews Korea Active ETF (MKOR) N-CSRCertified annual shareholder report (management investment company)