Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Matthews Asia Total Return Bond and Asia Credit Opportunities Funds to be liquidated

https://www.sec.gov/Archives/edgar/data/923184/000119312523008392/d274034d497.htm

497 1 d274034d497.htm FORM 497
MATTHEWS ASIA FUNDS

SUPPLEMENT DATED JANUARY 13, 2023
TO THE PROSPECTUS FOR
THE MATTHEWS ASIA TOTAL RETURN BOND FUND AND
THE MATTHEWS ASIA CREDIT OPPORTUNITIES FUND

DATED APRIL 28, 2022, AS SUPPLEMENTED (THE “PROSPECTUS”)

For all existing and prospective shareholders of the Matthews Asia Total Return Bond Fund and the Matthews Asia Credit Opportunities Fund:

Liquidation

The Board of Trustees of Matthews International Funds (d/b/a Matthews Asia Funds) (the “Trust”) has approved a Plan of Termination, Dissolution and Liquidation for each of the Matthews Asia Total Return Bond Fund and Matthews Asia Credit Opportunities Fund, each a series of the Trust (each, a “Fund” and together, the “Funds”), pursuant to which the Funds will be liquidated (each, a “Liquidation” and together, the “Liquidations”) on or about March 15, 2023 (the “Liquidation Date”). This date may be changed without notice at the discretion of the Trust’s officers.

Suspension of Sales. Effective January 17, 2023, the Funds will no longer sell shares to new investors or existing shareholders, including through exchanges into the Funds from other series of the Trust.

Mechanics. Each Fund will cease investment operations in accordance with the Fund’s investment objective and policies, and the Fund’s assets will be converted into cash and cash equivalents on or before the Liquidation Date. In connection with the Liquidations, any shares of a Fund outstanding on the Liquidation Date will be automatically redeemed as of the close of business on the Liquidation Date. The proceeds of any such redemption will be equal to the net asset value of those shares after the applicable Fund has paid or covered with reserves all of its charges, taxes, expenses and liabilities. For each Fund, the distribution to shareholders of these liquidation proceeds will occur as soon as practicable, and will be made to all shareholders of the Fund of record at the time of the Liquidation. Additionally, each Fund must declare and distribute to shareholders any realized capital gains and all net investment income no later than the final Liquidation distribution. Matthews International Capital Management, LLC (“Matthews”), investment advisor to the Funds, intends to distribute substantially all of each Fund’s net investment income before the applicable Liquidation. Matthews will bear all extra expenses other than any brokerage commissions in connection with the Liquidations to the extent those expenses with respect to a Fund exceed the amount of the Fund’s normal and customary fees and expenses accrued by the Fund through the Liquidation Date, provided that those accrued amounts are first applied to pay for the Fund’s normal and customary fees and expenses.

Other Alternatives. At any time before the Liquidation Date, shareholders of the Funds may redeem their shares of the Funds and receive the net asset value thereof, pursuant to the procedures set forth under “Investing in the Matthews Asia Funds – Selling (Redeeming) Shares” in the Prospectus. Shareholders may also exchange their shares of the Funds for shares of the same class of any other series of the Trust, as described in and subject to any restrictions set forth under “Investing in the Matthews Asia Funds – Exchanging Shares” in the Prospectus.

U.S. Federal Income Tax Matters. For tax purposes, with respect to shares held in a taxable account, the automatic redemption of shares of a Fund on the Liquidation Date will generally be treated as any other redemption of shares (i.e., as a sale that may result in gain or loss for federal income tax purposes). Instead of waiting until the Liquidation Date, a shareholder may voluntarily redeem his or her shares before the Liquidation Date to the extent that the shareholder wishes to realize any such gains or losses before the Liquidation Date. See “Other Shareholder Information – Taxes” in the Prospectus. Shareholders should consult their tax advisors regarding the tax treatment of the Liquidation.

If you have any questions regarding the Liquidations, please contact the Trust at 1-800-789-ASIA (2742).



Please retain this Supplement with your records.

Comments

  • Sad news. These funds have been killing it this year: MAINX up 9.00% and MICPX up 8.39% YTD. And in the past 3 months, MAINX up 33.43% and MICP up 22.01%. Life has been good in Asian bonds.
  • edited January 14
    I’d be interested in their reasons if anyone knows. Seems odd at a glance. Maybe worried about geo-politics / stability of area? Or, have they replaced these with a better product(s)? I’ve noticed some EM stock funds turning up in recent months - though still negative over full year. If the dollar continues to depreciate it would probably help EM bonds & equities.
  • mainx. a.u.m. down now to 43 million bucks.
  • So apparently the funds were too small to operate profitably.
  • edited January 14
    Thanks @Crash & @carew388

    Neither MAINX (+3% 1 year) or MICPX (-1.65% -1 year) appears to have a terrible one year stretch. Most everything related to EM got clocked last year. Not familiar with Matthews funds - but recall some favorable mentions here over the years. Possibly “fickle” investors fleeing, or maybe (more likely) just the trend out of mutual funds and into ETFs.
  • Matthews personnel turnover. There's a thread here at MFO about it. Maybe 2 or 3. People have been fleeing. If they're paying attention, that is.
  • edited January 14
    The threads below include discussions regarding Matthews Asia developments.
    Link1
    Link2
  • That's odd - MAINX and MICPX have performed better since Teresa Kong left.
  • edited January 15
    No AUM, in either fund, like Crash points out.
  • 2022 was a brutal year for Emerging Market Bond Funds
    FT Article
    "Investors have withdrawn a record $70bn from emerging market bond funds this year(2022)..."
    "Investors head for exit as rising rates in big economies and strong dollar hit sentiment..."

    Multisearch shows 25 Emerging Market Debt funds with AUM less than MICPX and 35 with AUM less than MINCX. Could be a lot of liquidations if AUM is the reason.
  • Not suprised. Teresa Kong, head of fixed income left Matthews last year. Just another senior investment person to leave Matthews Asia in recent years.
Sign In or Register to comment.