matthews international capital management

35
Do not give, show or quote to any other person. This document is not for public distribution and is for institutional/professional use only and has not been registered with, or approved by, any regulatory authority in any jurisdiction. © 2012 Matthews International Capital Management, LLC GL.PT006_0512 Seeking Dividends from Asia’s Growth Jesper Madsen, CFA Portfolio Manager May 2012 Performance results and valuations presented are in U.S. dollars. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. The standard fees are described in Part II of Matthews Form ADV. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary. The views and information discussed in this presentation are subject to change and may not reflect the presenter’s current vi ews. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Please see important disclosures at the end of this presentation.

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Page 1: Matthews international capital management

Do not give, show or quote to any other person. This document is not for public distribution and is for institutional/professional use only and has not been registered with, or approved by, any regulatory authority in any jurisdiction.

© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Seeking Dividends from Asia’s Growth Jesper Madsen, CFA

Portfolio Manager

May 2012

Performance results and valuations presented are in U.S. dollars. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. The standard fees are described in Part II of Matthews Form ADV. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.

The views and information discussed in this presentation are subject to change and may not reflect the presenter’s current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews International Capital Management, LLC does not accept any liability for losses either direct or consequential caused by the use of this information. Please see important disclosures at the end of this presentation.

Page 2: Matthews international capital management

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Matthews Overview

About Matthews

Largest dedicated Asia investment specialist in

the United States

Investing in Asia since 1991 through a variety

of market environments

Independent, privately owned firm with significant

employee ownership

Range of Asia investment strategies across the

risk-reward spectrum

Offering a unique investment perspective from a strategic

location in San Francisco

1

Matthews International Capital Management, Inc. (“Matthews”) is the advisor to the Matthews Asia Funds

KEY FACTS

As of March 31, 2012

Total assets under management $17.8 billion

Regional strategies $14.3 billion

Single-country strategies $3.5 billion

Investment team members 33

Page 3: Matthews international capital management

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Matthews History

2

Matthews has chosen to launch new strategies when there are compelling investment opportunities.

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

1991 G. Paul Matthews founds Matthews International Capital Management 1994

Matthews Asia introduces Asia ex-Japan and Asian Growth & Income

1998 China inception

1998 Japan inception

2003 Asia Growth

inception

2005 India inception

2008 Asia Small Companies

inception

2006 Asia Dividend inception

1999 Asia Science and Technology inception

1995 Korea inception

1992 Firm launches an investment vehicle for the Asia ex-Japan region

2009 China Dividend

inception

2010 Matthews Asia

introduces off-shore funds for non-U.S.

investors

2011 China Small Companies

inception

2011 Asia Strategic Income

inception

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Matthews Asia Funds

Asia Dividend

Pacific Tiger

China

India

3

An investment in Matthews Asia Funds may be subject to risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. Please see the Prospectus for a Fund for additional information about the risks of investing in a Fund.

The following Matthews Asia Funds are currently available as Luxembourg-domiciled SICAVs

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Investment Philosophy and Approach

The foundation of Matthews’ investment philosophy is our belief in the long-term economic growth and development of the countries in Asia.

4

Active management

We believe many of the region’s widely used indices are backward looking and are not representative of the

industries and companies that will be successful in the future. We look to invest in companies whose

potential has yet to be fully recognized by the market.

Long-term focus on Asia

We believe a long-term approach is the most effective way to capitalize on Asia’s evolution. Matthews has

been investing in Asia since 1991 and we draw on our experience to identify companies that stand to benefit

from the growth and development of markets throughout the region.

Bottom-up research

We employ a fundamental, bottom-up investment process that seeks to identify companies with sustainable

long-term growth prospects, strong business models, quality management teams and reasonable valuations.

This research process involves more than 2,000 company meetings each year.

Defining Asia’s investment strategies

We strive to provide investors a range of Asia strategies across the risk-reward spectrum and launch new

strategies when there are compelling investment opportunities in the region.

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

5

Page 7: Matthews international capital management

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

A Stock for Its Dividends

6

“Even so spoke the old farmer to his son: A cow for her milk,

a hen for her eggs, and a stock, by heck, for her dividends.”

John Burr Williams The Theory of Investment Value (1938)

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Asia Offers Rare Combination of Income and Growth

7

Benefits of dividend-focused investing

Dividends serve as a means of realizing tangible value from a long-term investment

Dividend-paying companies tend to exhibit lower volatility

Dividends help cut out short-term noise and focus on long-term sustainable growth

Dividends provide a signal that the interests of minority shareholders are valued by management

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Europe Asia Pacific U.S.

Dividends—How Asia Compares to the U.S. and Europe

8

Sources: Factset, MSCI, I/B/E/S, JPMorgan, S&P, Bloomberg

*Index members as of December 2009; Europe (Bloomberg European 500 Index), Asia Pacific (MSCI AC Asia Pacific Index), U.S. (S&P 500 Index). **Dividend yield as of 04/20/2012, calculated by JP Morgan using I/B/E/S estimates for current Index constituents. Europe (MSCI Europe Index), Asia Pacific (MSCI AC Asia Pacific Index), U.S. (MSCI U.S. Index). *** Compound annual growth rate based on index constituents of Europe (Bloomberg European 500 Index), Asia Pacific (MSCI AC Asia Pacific Index), U.S. (S&P 500 Index) as of 12/31/02, excluding those that are no longer in existence as of fiscal year 2010. All performance quoted represents past performance and is no guarantee of future results. Past yields are no guarantee of future yields. It is not possible to invest directly in an index.

(Bil US$)* 2002-2010*** (as of 04/20/2012)**

12%

17%

6%

Dividend Growth

4.3%

3.0%

2.2%

Dividend Yield

$305

$219 $219

Size of Dividend Pool

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Dividend Yield-Focused Strategies Have Historically Outperformed In Asia Total return of strategies based on dividend yield and earnings growth

9

The universe used is the S&P Broad Market Index for Asia Pacific ex Japan. For Dividend Yield and EPS growth factors, companies are ranked monthly by percentile and divided into quintiles. All performance quoted represents past performance and is no guarantee of future results. Past yields are no guarantee of future yields. Source: Citi

ABSOLUTE RETURN (INDEXED)

PRICE INDEX 0

200

400

600

800

1000

05/01/96 05/01/01 05/01/06 05/01/11

Lowest Dividend Yield Quintile Highest Dividend Yield Quintile

Second Highest EPS Growth Quintile Highest EPS Growth Quintile

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Dividends Matter

The Impact of Dividends on Long-Term Returns

10

For periods 12/31/87–3/31/12. 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, Philippines, Singapore, South Korea, Taiwan and Thailand. It is not possible to invest directly in an index.

Sources: MICM, MSCI

GROWTH OF $10,000 FOR THE MSCI ALL COUNTRY ASIA PACIFIC INDEX

$5,000

$7,000

$9,000

$11,000

$13,000

$15,000

$17,000

$19,000

$21,000

$23,000

$25,000

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

DIVIDENDS REINVESTED

PRICE INDEX

~70%

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Dampening Downside Volatility

11

Zephyr StyleADVISORZephyr StyleADVISOR: Mat thews Internat ional Capital Management

DrawdownNovember 2006 - March 2012

-60%

-50%

-40%

-30%

-20%

-10%

0%

Oct 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Mar 2012

Matthews Asia Dividend Investor

MSCI AC ASIA PACIFIC

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews Asia Dividend Fund, which commenced operations on April 30, 2010. For performance information for the Matthews Asia Dividend Fund, please slide 22 or visit matthewsasia.com. Performance results, statistics, portfolio characteristics, and holdings information for the Matthews Asia Dividend Fund may vary from representative account for the strategy. Source: Zephyr

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Asia’s Expanding Dividend Universe

12

Note: Excluding China A-share market. Data represents Asia Pacific dividend-paying stock universe with market cap over US$100 million as of end of 1998 and 2010 respectively. Sources: Factset, MSCI, I/B/E/S, JPMorgan, S&P

Over two-thirds of dividends paid within China/Hong Kong in 2010 were from companies listed after 1998.

1998 US$B

Japan 18.9

Australia 8.7

China/Hong Kong 7.7

Taiwan 1.9

Singapore 1.7

Other 5.0

Total 43.9

2010 US$B

Japan 73.5

China/Hong Kong 65.8

Australia 42.8

Taiwan 29.5

Other 72.6

Total 284.2

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Focus on What Matters: Signal vs. Noise

13

*MSCI AC Asia Pacific Index members as of 12/30/10. To be included, these companies must have had an average operating income during the three previous fiscal years of a minimum of US$50 million. Companies must also have a 10-year financial history. Sources: Factset, MSCI, I/B/E/S, JPMorgan, S&P

0

50

100

150

200

250

300

350

400

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

TOTAL EARNINGS

TOTAL DIVIDENDS

EARNINGS AND DIVIDENDS OF COMPANIES IN ASIA PACIFIC*

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Dividends—Signal of Better Corporate Governance

Important tool to overcome asymmetry in information

Help align minority with majority shareholders

Often signal of better financial reporting

14

Page 16: Matthews international capital management

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

Higher Payout Companies are Generally Better Stewards of Shareholder Capital Return on Invested Capital—MSCI All Country Asia Pacific Index

15

%

2%

4%

6%

8%

10%

12%

14%

16%

2004 2005 2006 2007 2008 2009 2010 2011

Dividend Payout Quartile 1 (highest payout ratio)

Dividend Payout Quartile 4 (lowest payout ratio)

Note: Based on constituents of the MSCI AC Asia Pacific Index; Quartiles adjust each year based on dividend payout ratio; All metrics are trailing 3 year; Outliers beyond 4 standard deviations of the mean are excluded. Source: FactSet

RO

IC

0

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16

Matthews Asia Dividend Fund

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Fund Profile | Asia Dividend

Investment Objective

Total return with an emphasis on providing current income.

Strategy

Seeks to provide a level of income that is higher than the yield

generally available in Asia equity markets over the long term.

Invests primarily in companies that are paying high dividends

relative to their current share price, or are well positioned to do so

in the future.

Lead Manager Co-Manager

Ratings

FUND FACTS

Inception Date Fund: April 30, 2010 Strategy: October 31, 2006

Cap Range All Cap

Number of Holdings 50 to 80

Turnover Range 20% to 50%

Benchmark MSCI All Country Asia Pacific Index

Assets (as of March 31, 2012)

Fund: $96.2 million Strategy: $2.8 billion

JESPER MADSEN, CFA YU ZHANG, CFA

17

Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund.

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18

Matthews Asia Dividend Balances Dividend Yield and Growth

Dividend yield and dividend growth data depicted are for all securities held in the Matthews Asia Dividend Fund. Each point represents a plotting of the portfolio company’s trailing dividend yield as of 03/31/12 and its 3-year annual dividend growth rate based on MICM estimates. Color depiction represents a portfolio company’s dividend payout ratio based on company dividend policy, if available. Otherwise 5-year average payout ratio is utilized (or longest available for companies with less than 5-year history) adjusted for extreme temporary outliers. There is no guarantee that the companies in the portfolio will achieve their forecasted dividend growth rates, maintain or grow their dividend pay-out ratio, or pay dividends. Source: MICM

Bubble sizes are in proportion to the portfolio weight of individual positions.

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0% 2% 4% 6% 8% 10% 12% 14%

Dividend Yield

Dividend Yield vs. Dividend Growth

80% PAYOUT RATIO

Red 80+%

Amber 50-80%

Blue 30-50%

Green 0-30%

3 Y

ear

Div

iden

d G

row

th

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Portfolio Characteristics | Asia Dividend Fund As of March 31, 2012

19

Country Breakdown (%)

China/Hong Kong 28.0%

Japan 22.3%

Singapore 11.2%

Taiwan 9.0%

Australia 8.9%

Thailand 6.7%

South Korea 4.6%

Indonesia 3.2%

United Kingdom 2.8%

Philippines 1.7%

Malaysia 0.1%

India 0.0%

New Zealand 0.0%

Cash and Other 1.5%

Sector Breakdown (%)

Consumer Staples 21.5%

Financials 19.2%

Consumer Discretionary 14.4%

Industrials 10.3%

Telecom Services 9.1%

Utilities 6.9%

Information Technology 5.4%

Energy 4.9%

Health Care 4.9%

Materials 1.9%

Cash and Other 1.5%

Relative to Index (%) Relative to Index (%)

15.4%

-8.2%

1.8%

-3.1%

4.3%

3.6%

-8.2%

-0.3%

1.6%

-8.4%

1.5%

MATTHEWS ASIA DIVIDEND FUND VS. MSCI ALL COUNTRY ASIA PACIFIC INDEX

11.9%

-16.6%

8.0%

2.0%

-6.4%

5.4%

-5.0%

1.5%

2.8%

1.2%

-2.0%

-4.1%

-0.2%

1.5%

The information contained in this presentation does not, in any way, constitute investment advice. Portfolio characteristics for the Fund

may vary from time to time from what is shown.

Sources: FactSet Research Systems, MICM.

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Market Cap Exposure Fund Relative to Index (%)

Large Cap ($5B+) 49.2%

Mid Cap ($1B–$5B) 26.4%

Small Cap (<$1B) 22.9%

Cash and Other 1.5%

Portfolio Characteristics Fund

Weighted Average Market Cap $24.0 billion

P/E using FY1 Estimates 11.8x

P/E using FY2 Estimates 10.7x

Dividend Yield* 3.85%

Portfolio Characteristics | Asia Dividend Fund As of March 31, 2012

20

1.5%

22.8%

10.7%

-35.0%

MATTHEWS ASIA DIVIDEND FUND VS. MSCI ALL COUNTRY ASIA PACIFIC INDEX

Sources: FactSet Research Systems, MICM.

The information contained in this presentation does not, in any way, constitute investment advice. Portfolio characteristics for the Fund

may vary from time to time from what is shown.

*The dividend yield (trailing) for the portfolio is the weighted average sum of the dividend paid per share during the last 12 months divided by the current price. The annualized dividend yield for the Fund is for the equity-only portion of the portfolio. Please note that this is based on gross 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.

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Strategy Performance

21

Zephyr StyleADVISORZephyr StyleADVISOR: Mat thews Internat ional Capital Management

Manager PerformanceNovember 2006 - March 2012 (Single Computation)

40

60

80

100

120

140

160

180

Oct 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Mar 2012

Matthews Asia Dividend InvestorMSCI AC ASIA PACIFIC

Risk / Return TableAnnualized Summary Statistics: November 2006 - March 2012

Matthews Asia Div idend Investor

Return(%)

10.48

MSCI AC ASIA PACIFIC 1.75

Std Dev(%)

17.45

21.32

Alphavs. Market

(%)

8.79

0.00

SharpeRatio

0.5195

0.0156

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews Asia Dividend Fund, which commenced operations on April 30, 2010. For performance information for the Matthews Asia Dividend Fund, please see the previous slide or visit matthewsasia.com. Performance results, statistics, portfolio characteristics, and holdings information for the Matthews Asia Dividend Fund may vary from representative account for the strategy. Annualized summary statistical data for the Matthews Asia Dividend Fund are not available. Source: Zephyr

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11.74%

2.20%

5.79%

12.08%

-4.02%

3.15%

3 Months 1 Year Since Inception (04/30/2010)

Asia Dividend Fund (I Acc, USD)

MSCI AC Asia Pacific Index

Investment Returns | Asia Dividend Fund As of March 31, 2012

22

AVERAGE ANNUAL TOTAL RETURNS

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 the original cost. Current performance may be lower or higher than performance shown. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. Performance details provided are based on a NAV to NAV basis, and are net of management fees and other expenses.

Sources: JP Morgan, Bloomberg, MICM

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Investment Returns | Asia Dividend Strategy As of March 31, 2012

23

AVERAGE ANNUAL TOTAL RETURNS

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews Asia Dividend Fund, which commenced operations on April 30, 2010. For performance information for the Matthews Asia Dividend Fund, please see the previous slide or visit matthewsasia.com. Performance results, portfolio characteristics, and holdings information for the Matthews Asia Dividend Fund may vary from representative account for the strategy.

Sources: BNY Mellon Investment Servicing , Bloomberg, MICM

11.55%

0.77%

24.54%

9.20% 10.49%

12.08%

-4.02%

19.15%

-0.08%

1.75%

3 Months 1 Year 3 Year 5 Year Since Inception (10/31/06)

Asia Dividend Strategy

MSCI AC Asia Pacific Index

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

To learn more about Matthews or how the Matthews Asia Funds can

complement globally diversified portfolios, please visit global.matthewsasia.com

or contact us directly:

Jonathan Schuman James Campion

Executive Vice President Senior Vice President

Head of Global Business Development Head of Asia Business Development

+1-415-984-5366 +852-3901-0888

[email protected] [email protected]

Kate Hitchings

Global Client Relationship Manager

+1-415-954-4525

[email protected]

Contacting Matthews Asia

24

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Appendix I | Investment Team Bios

25

Portfolio Managers

ROBERT J. HORROCKS, PhD

Chief Investment Officer,

Portfolio Manager

Robert Horrocks is Chief Investment Officer at Matthews International Capital Management, LLC and a Portfolio Manager. He manages the firm’s Asian Growth and Income strategy and co-manages the Asia Strategic Income strategy. As Chief Investment Officer, Robert oversees the firm’s investment process and investment professionals and sets the research agenda for the investment team. Before joining Matthews in 2008, Robert was Head of Research at Mirae Asset Management in Hong Kong. From 2003 to 2006, Robert served as Chief Investment Officer for Everbright Pramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securities in Hong Kong before moving on to spend eight years working in several different Asian jurisdictions for Schroders, including stints as Country General Manager in Taiwan, Deputy Chief Investment Officer in Korea and Designated Chief Investment Officer in Shanghai. Robert earned his PhD in Chinese Economic History from Leeds University in the United Kingdom, and is fluent in Mandarin.

RICHARD H. GAO

Portfolio Manager Richard Gao is a Portfolio Manager at Matthews International Capital Management, LLC. He manages the firm’s China, Pacific Tiger and China Small Companies strategies . Richard joined Matthews in 1997 as a China Analyst. He began his career at the Bank of China in 1989, first as a loan officer, then as a FOREX Trader in the Treasury Department. In 1993, he became Assistant Manager at the Bank of China, where he was in charge of FOREX trading for import/export companies. Richard received a B.A. in Literature from Guangdong University of Foreign Studies and an M.B.A. in International Business from the Dominican University of California. He is fluent in Mandarin, Cantonese and Shanghainese.

JESPER O. MADSEN, CFA

Portfolio Manager Jesper Madsen is a Portfolio Manager at Matthews International Capital Management, LLC, and manages the firm’s Asia Dividend and China Dividend strategies. Prior to joining Matthews in 2004 as a Research Analyst, Jesper was an Analyst at Charter Equity Research and also worked with the Fixed Income group at Barclays Global Investors. He has traveled extensively, including living and working in China. Jesper received a B.A. in Politics, Philosophy and Economics from the University of York in the United Kingdom.

SHARAT SHROFF, CFA

Portfolio Manager Sharat Shroff is a Portfolio Manager at Matthews International Capital Management, LLC. He manages the firm’s Pacific Tiger and India strategies and co-manages the Asia Growth strategy. Prior to joining Matthews in 2005 as a Research Analyst, Sharat worked in the San Francisco and Hong Kong offices of Morgan Stanley as an Equity Research Associate. Sharat received a Bachelor of Technology from the Institute of Technology in Varanasi, India and an M.B.A. from the Indian Institute of Management, in Calcutta, India. He is fluent in Hindi and Bengali.

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Appendix II | Client Services Team Bios

26

JONATHAN D. SCHUMAN

Executive Vice President, Head

of Global Business Development

Jonathan Schuman joined Matthews International Capital Management, LLC in 2010 as an Executive Vice President. He is responsible for leading the firm’s international business development strategy, developing relationships with key distribution partners and directing the firm’s global sales efforts. Prior to joining the firm, Jonathan was a Managing Director at PineBridge Investments (formerly AIG Investments) in Tokyo, responsible for institutional sales and client relations, product development, marketing and RFP functions for AIG’s third-party investment management business in Japan. He also served as Assistant General Counsel for Legal and Government Affairs for AIG Companies, Japan and Korea. Jonathan earned a J.D. from Harvard Law School, a M.A.L.D from The Fletcher School of Law and Diplomacy and a B.A. in Asian Studies from Williams College. He has served as Co-Chair of the Financial Services Committee at the American Chamber of Commerce in Japan, and is fluent in Japanese.

JAMES E. CAMPION

Senior Vice President,

Head of Asia Business

Development

James Campion joined Matthews International Capital Management, LLC in 2010 as a Senior Vice President and leads the firm’s business development efforts in Asia. Most recently, James was Head of Asia Distribution for Threadneedle Portfolio Services in Hong Kong, responsible for setting up its Hong Kong office and developing the firm’s Asia distribution strategy. Prior to this, he served as Allianz Global Investor’s Head of Mutual Funds for the Asia Pacific region and was a Managing Director for New Star International. From 1998 to 2004, James also held several positions with Schroder Investment Management (Hong Kong) Limited, including Regional Head of Mutual Funds, Asia ex Japan.

KATE HITCHINGS

Global Client Relationship

Manager

Kate Hitchings joined Matthews International Capital Management, LLC in 2011 as Global Client Relationship Manager. She manages relationships with Matthews’ clients in Europe and Latin America. Prior to joining Matthews, Kate was a Business Development Executive with AllianceBernstein in London, where she was responsible for business development opportunities and client management, primarily within the U.K. Institutional market. She began her tenure with AllianceBernstein in 2005, initially working with private clients, endowments, and foundations out of its Boston-based wealth management office. Kate received a B.A. in English with a minor in Psychology from Dartmouth College, and is a proficient Spanish speaker.

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10.06%

-1.49%

6.43%

13.76%

-6.79%

4.79%

3 Months 1 Year Since Inception (04/30/2010)

Pacific Tiger Fund (I Acc, USD)

MSCI AC Asia ex Japan Index

Appendix III | Pacific Tiger Fund—Investment Returns As of March 31, 2012

27

AVERAGE ANNUAL TOTAL RETURNS

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 the original cost. Current performance may be lower or higher than performance shown. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. Performance details provided are based on a NAV to NAV basis, and are net of management fees and other expenses.

Sources: JP Morgan, Bloomberg, MICM

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Appendix III | Pacific Tiger Strategy—Investment Returns As of March 31, 2012

AVERAGE ANNUAL TOTAL RETURNS

1

1 Index return calculated from 8/31/94.

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews Pacific Tiger Fund, which commenced operations on April 30, 2010. For performance information for the Matthews Pacific Tiger Fund, please see the previous slide or visit matthewsasia.com. Performance results, portfolio characteristics, and holdings information for the Matthews Pacific Tiger Fund may vary from representative account for the strategy.

Sources: BNY Mellon Investment Servicing , Bloomberg, MICM

10.92%

-0.85%

29.43%

8.86%

14.78%

9.05%

13.76%

-6.79%

24.70%

5.34%

11.84%

3.88%

3 Months 1 Year 3 Years 5 Years 10 Years Since Inception

(9/12/94)

Pactific Tiger Strategy

MSCI AC Asia ex Japan Index

28

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9.01%

-8.83%

2.50%

9.92%

-12.65%

0.43%

3 Months 1 Year Since Inception (02/26/2010)

China Fund (I Acc, USD)

MSCI China Index

Appendix III | China Fund — Investment Returns As of March 31, 2012

29

AVERAGE ANNUAL TOTAL RETURN

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 the original cost. Current performance may be lower or higher than performance shown. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. Performance details provided are based on a NAV to NAV basis, and are net of management fees and other expenses.

Sources: JP Morgan, Bloomberg, MICM

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8.97%

-10.68%

20.76%

8.90%

15.53%

11.44% 9.92%

-12.65%

14.78%

5.09%

16.66%

3.04%

3 Months 1 Year 3 Years 5 Years 10 Years Since inception

(2/19/98)

China Strategy

MSCI China Index

Appendix III | China Strategy—Investment Returns As of March 31, 2012

30

AVERAGE ANNUAL TOTAL RETURNS

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews China Fund, which commenced operations on February 26, 2010. For performance information for the Matthews China Fund, please see the previous slide or visit matthewsasia.com. Performance results, portfolio characteristics, and holdings information for the Matthews China Fund may vary from representative account for the strategy.

Sources: BNY Mellon Investment Servicing , Bloomberg, MICM

1 Index return calculated from 2/28/98.

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22.75%

-16.90%

20.78%

-17.57%

3 Months Since Inception (06/30/2011)

India Fund (I Acc, USD)

Bombay Stock Exchange (BSE) 100 Index

Appendix III | India Fund—Investment Returns As of March 31, 2012

31

ACTUAL RETURN, NOT ANNUALIZED

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 the original cost. Current performance may be lower or higher than performance shown. Investors investing in funds denominated in non-local currency should be aware of the risk of currency exchange fluctuations that may cause a loss of principal. Performance details provided are based on a NAV to NAV basis, and are net of management fees and other expenses.

Sources: JP Morgan, Bloomberg, MICM

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Appendix III | India Strategy—Investment Returns As of March 31, 2012

32

AVERAGE ANNUAL TOTAL RETURNS

Performance results are of the largest account in the noted strategy managed by Matthews International Capital Management LLC. The performance results are net of advisory and other fees. Matthews’ advisory fees may vary depending on the size and nature of the assets and account. All performance is in US$ and includes all dividends and interest accrued income, realized and unrealized gains or losses, accrued expenses, and are net of all brokerage commissions and execution costs and advisory and other fees. Individual account performance will vary. Performance quoted represents past performance and is no guarantee of future results. This performance information does not, and it is not intended to, represent performance of the Matthews India Fund, which commenced operations on June 30, 2011. For performance information for the Matthews India Fund, please see the previous slide or visit matthewsasia.com. Performance results, portfolio characteristics, and holdings information for the Matthews India Fund may vary from representative account for the strategy.

Sources: BNY Mellon Investment Servicing , Bloomberg, MICM

23.84%

-16.96%

32.38%

5.85% 11.11%

20.78%

-19.40%

24.25%

4.74%

12.35%

3 Months 1 Year 3 Years 5 Years Since inception (10/31/05)

India Strategy

Bombay Stock Exchange (BSE) 100 Index

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© 2012 Matthews International Capital Management, LLC GL.PT006_0512

These materials are provided solely for use in a private meeting and are intended for informational and discussion purposes only. To the extent that these materials are circulated, it is intended that they be circulated only to persons to whom they may lawfully be distributed and any recipient of these materials should inform themselves about and observe any applicable legal requirements. Persons who do not fall within such descriptions may not act upon the information contained in these materials.

This document is not a prospectus and does not constitute an offer to the public. No public offering or advertising of investment services or securities is intended to have taken effect through the provision of these materials. Nothing in these materials is or shall be considered to be an offer of advisory or investment services to any recipient. The information presented in these materials is believed to be materially correct at the time of compilation, but no representation or warranty (express or implied) is made as to the accuracy or completeness of any of this information. Nothing set out in these materials is or shall be relied as a promise or representation as to the future.

The manager referred to in these materials means a U.S.-based investment adviser registered with the U.S. Securities and Exchange Commission who has not represented and will not represent that it is otherwise registered with any other regulator or regulatory body.

Investors should ascertain from their professional advisers the consequences of investing with Matthews under the relevant laws of the jurisdictions to which they are subject including the tax consequences and any exchange control requirement. Investors should carefully consider the investment objectives, risks, charges and expenses of any strategy before making an investment decision.

An investment in Matthews Asia Funds may be subject to risks, such as social and political instability, market illiquidity, exchange-rate fluctuations, a high level of volatility and limited regulation. In addition, single-country and sector funds may be subject to a higher degree of market risk than diversified funds because of 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 large companies. Please see the Prospectus for a Fund for additional information about the risks of investing in

a Fund. This discussion of the risks associated with investing in Matthews Asia Funds is not exhaustive and prospective investors should consult a Fund’s Prospectus before making an investment decision.

The Board of Directors of the Matthews Asia Funds may, at its discretion, pay dividends out of the capital of this sub-fund. The Board of Directors of the Funds may amend the dividend policy, subject to the SFC’s prior approval and by giving not less than one month prior notice to the shareholders of the Funds. Dividends paid out of capital amount to a return or withdrawal of part of an investor’s original investment, or from any capital gains attributable to that original investment. Such dividends may result in an immediate decrease of the net asset value per share of this sub-fund. The composition of the latest dividends (i.e., the relative amount paid from the income and capital) is available from the Funds upon request and also on its website at matthewsasia.com.

Fund ratings represent an opinion only and are not a recommendation to buy or sell any fund. Fund rating reports are available on matthewsasia.com.

©2012 Morningstar. All Rights Reserved. The information, data, analyses, and opinions contained herein (1) include the proprietary information of Morningstar, (2) may not be copied or redistributed, (3) do not constitute investment advice offered by Morningstar, (4) are provided solely for informational purposes and therefore are not an offer to buy or sell a security, and (5) are not warranted to be correct, complete, or accurate. Morningstar shall not be responsible for any trading decisions, damages, or other losses resulting from, or related to, this information, data, analyses, or opinions or their use. The Morningstar Analyst Rating™ is subjective in nature and reflects Morningstar’s current expectations of future events/behaviour as they relate to a particular fund. Because such events/behaviour may turn out to be different than expected, Morningstar does not guarantee that a fund will perform in line with its Morningstar Analyst Rating. Likewise, the Morningstar Analyst Rating should not be seen as any sort of guarantee or assessment of the creditworthiness of a fund or of its underlying securities and should not be used as the sole basis for making any investment decision.

Important Disclosures

33

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Important Disclosures The shares described in each Fund’s prospectus and the related documents have not been registered or qualified under the laws of, and may not be offered or sold, directly or indirectly, to the public in Austria, Bahrain, Chile, Colombia, Denmark, Egypt, Finland, Germany, Iceland, Israel, Italy, Kuwait, Netherlands, Norway, Peru, Portugal, Qatar, Saudi Arabia, Spain, Sweden, or United Arab Emirates. The Fund’s prospectus and other related materials and documents have not been filed with or approved by the regulatory authorities of Austria, Bahrain, Chile, Colombia, Denmark, Egypt, Finland, Germany, Iceland, Israel, Italy, Kuwait, Netherlands, Norway, Peru, Portugal, Qatar, Saudi Arabia, Spain, Sweden, or United Arab Emirates and are not intended to constitute a public offering in such countries and should not be construed as such. In particular, these materials shall not constitute an offer to sell or a solicitation of an offer to buy the shares described in each Fund’s prospectus and in the related materials and documents and no steps may be taken that would constitute or result in a public offering or distribution of the shares in Austria, Bahrain, Chile, Colombia, Denmark, Egypt, Finland, Germany, Iceland, Israel, Italy, Kuwait, Netherlands, Norway, Peru, Portugal, Qatar, Saudi Arabia, Spain, Sweden, or United Arab Emirates, including by use of any public advertisement of similar public communication.

The shares of the Funds are only available for certain non-U.S. Persons in select transactions outside of the United States, or in limited circumstances, otherwise in transactions which are exempt from the registration requirements of the United States Securities Act of 1933, as amended.

This document does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any Fund (nor shall any such shares be offered or sold to any person) in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities law of that jurisdiction. This document is directed at and intended for institutional investors (as such term is defined in the various jurisdictions). This document is provided on a confidential basis for informational purposes only and may not be reproduced in any form or transmitted to any person without authorization from Matthews International Capital Management, LLC. It is the responsibility of any persons wishing to subscribe for shares to inform themselves of and to observe all applicable laws and regulations of any relevant jurisdictions. Prospective investors should inform themselves as to the legal requirements and tax consequences within the countries of their citizenship, residence, domicile and place of business with respect to the acquisition, holding or disposal of shares, and any foreign exchange restrictions that may be relevant thereto. 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, Philippines, Singapore, South Korea, Taiwan and Thailand. The Asia Dividend Strategy invests in countries that are not included in the MSCI All Country Asia Pacific Index. It is not possible to invest directly in an index.

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 Pacific Tiger Strategy may invest in countries that are not included in the MSCI All Country Asia ex Japan Index. It is not possible to invest directly in an index.

The MSCI China Index is a free float–adjusted market capitalization–weighted index of Chinese equities that include China-affiliated corporations and H shares listed on the Hong Kong exchange, and B shares listed on the Shanghai and Shenzhen exchanges. It is not possible to invest directly in an index.

The Bombay Stock Exchange 100 (BSE 100) Index is a free float-adjusted market capitalization-weighted index of the 100 leading stocks listed on the Bombay Stock Exchange. It is not possible to invest directly in an index

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). It is not possible to invest directly in an index.

The S&P 500 Index is a broad market-weighted index dominated by blue-chip stocks in the U.S. It is not possible to invest directly in an index.

The S&P Broad Market Index is a market-capitalization-weighted index providing a broad measure of the global equities markets. It is not possible to invest directly in an index.

34