U.S. Additionally, investors may have
substantial difficulties bringing legal actions to enforce or protect investors’ rights, which can increase the risks of loss.
U.S. Trade Policy Risk: The Trump administration recently enacted and proposed to enact significant new tariffs on imports
from certain countries. Additionally, President Trump has directed various federal
agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs. There
continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs. These developments, or the
perception that any of them could occur, may have a material adverse effect on global
economic conditions and the stability of global financial markets, and may significantly
reduce global trade and, in particular, trade between the impacted nations and the U.S. Any of these factors could depress economic activity and restrict a portfolio company’s access to suppliers or
customers and have a material adverse effect on its business, financial condition or operations, which in turn could negatively impact the Fund.
Dividend-Paying Securities Risk: The Fund may invest in dividend-paying equity securities. There can be no guarantee that companies that have historically paid dividends will continue to pay them or pay them at the current
rates in the future. The prices of dividend-paying equity securities (and particularly of those issued by Asian companies) can be highly volatile. In addition, dividend-paying equity securities, in
particular those whose market price is closely related to their yield, may exhibit greater
sensitivity to interest rate changes. The Fund’s investment in such securities may
also limit its potential for appreciation during a broad market advance.
Equity Securities Risk: Equity securities may include common stock, preferred stock or other securities representing an
ownership interest or the right to acquire an ownership interest in an issuer. Equity
risk is the risk that stocks and other equity securities generally fluctuate in value more than bonds and may decline in value over short or extended periods. The value of stocks and other equity securities may
be affected by changes in an issuer’s financial condition, factors that affect a particular industry or industries, or as a result of changes in overall market, economic and political conditions
that are not specifically related to a company or industry.
Risks Associated with China and Hong Kong: The Chinese government exercises significant control over China’s economy through its industrial policies
(e.g., allocation of resources and other preferential treatment), monetary policy, management of currency exchange rates, and management of the payment of foreign currency-denominated obligations.
Changes in these policies could adversely impact affected industries or companies in
China. China’s economy, particularly its export-oriented industries, may be adversely impacted by trade or political disputes with China’s major trading partners, including the U.S. In addition, as its consumer
class continues to grow, China’s domestically oriented industries may be especially sensitive to changes in government policy and investment cycles. As demonstrated by Hong Kong protests in recent
years over political, economic, and legal freedoms, and the Chinese government’s
response to them, considerable political uncertainty continues to exist within Hong Kong.
Due to the interconnected nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty in the Hong Kong and Chinese markets. If China were to exert its authority
so as to alter the
economic, political or legal structures or the existing social policy of Hong Kong, investor and
business confidence in Hong Kong could be negatively affected and have an adverse effect on the Fund’s investments.
Depositary Receipts Risk: Although depositary receipts have risks similar to the securities that they represent, they may also
involve higher expenses and may trade at a discount (or premium) to the underlying
security. In addition, depositary receipts may not pass through voting and other shareholder rights, and may be less liquid than the underlying securities listed on an exchange.
Volatility Risk: The smaller size and lower levels of liquidity in emerging markets, as well as other factors, may
result in changes in the prices of Asian securities that are more volatile than those of
companies in more developed regions. This volatility can cause the price of the Fund’s shares to go up or down dramatically. Because of this volatility, this Fund is better suited for long-term investors. If the value of the
Fund’s investments declines, the net asset value of the Fund will decline and investors may lose some or all of the value of their investments.
Convertible Securities Risk: The Fund may invest in convertible preferred stocks, and convertible bonds and debentures. The risks
of convertible bonds and debentures include repayment risk and interest rate risk. Many
Asian convertible securities are not rated by rating agencies. The Fund may invest in convertible debt securities of any maturity and in those that are unrated, or would be below investment grade (referred
to as “junk bonds”) if rated. Therefore, credit risk may be greater for the Fund than for other funds that invest in higher-grade securities. These securities are also subject to greater liquidity
risk than many other types of securities.
Risks Associated with Smaller Companies: Smaller companies may offer substantial opportunities for capital growth; they also involve substantial risks, and investments in smaller companies may be considered speculative. Such
companies often have limited product lines, markets or financial resources. Securities of
smaller companies may trade less frequently and in lesser volume than more widely held
securities and the securities of smaller companies generally are subject to more abrupt or erratic price movements than more widely held or larger, more established companies or the market indices in
general.
Risks Associated with Medium-Size
Companies: Medium-size companies may be subject to a number of risks not associated with larger, more established companies,
potentially making their stock prices more volatile and increasing the risk of loss.
Active Management Risk: The Fund is actively managed by Matthews. There is the risk that Matthews may select securities that underperform the relevant stock
market(s), the Fund’s benchmark index or other funds with similar investment
objectives and investment strategies.
Sector Concentration Risk: To the extent that the Fund emphasizes, from time to time, investments in a particular sector, the Fund will be subject to a greater degree to the risks particular to that sector, including the
sector(s) described below. Market conditions, interest rates, and economic, regulatory, or financial developments could significantly affect a single sector. By focusing its investments in a particular
sector, the Fund may face more risks than if it were diversified broadly over numerous
sectors.
—Consumer Discretionary Sector Risk: As of December 31, 2024, 32% of the Fund’s assets were invested in the consumer discretionary sector. The success of
consumer product
