Form N-CSRS

Matthews Asia Active ETFs | Semi-Annual Report

June 30, 2023 | matthewsasia.com

GLOBAL EMERGING MARKETS STRATEGIES

Matthews Emerging Markets Equity Active ETF (MEM)

Matthews Emerging Markets ex China Active ETF (MEMX)

ASIA GROWTH STRATEGIES

Matthews Asia Innovators Active ETF (MINV)

Matthews China Active ETF (MCH)

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Listed on the NYSE Arca

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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.

Cover photo: Looking out to brighter and greener pastures (Chiang Mai, Thailand)

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 June 30, 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.


2		MATTHEWS ASIA FUNDS

Contents



Message to Shareholders from the Investment Advisor			4

Fund Characteristics and Schedules of Investments:

GLOBAL EMERGING MARKETS STRATEGIES

Matthews Emerging Markets Equity Active ETF			6

Matthews Emerging Markets ex China Active ETF			9

ASIA GROWTH STRATEGIES
Matthews Asia Innovators Active ETF			12
Matthews China Active ETF			15

Index Definitions			18
Disclosures			19
Disclosure of Fund Expenses			19
Statements of Assets and Liabilities			21
Statements of Operations			22
Statements of Changes in Net Assets			23
Financial Highlights			25
Notes to Financial Statements			29
1. Organization			29
2. Significant Accounting Policies			29
3. Capital Shares Transactions			33
4. Investment Advisory Fees and Other Transactions with Affiliates			34
5. Investments			34
6. Income Tax Information			34
7. Public Health Emergency Risks			35

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.


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Message to Shareholders from the

Investment Advisor

Investment Manager Letter

Interest rate cycles are driving changes in short-term sentiment these days and U.S.—China politics seem to be determining the longer-term mood. In the last quarter it was particularly apparent that neither seem to be working in favor of emerging markets. For many investors, it’s been a signal to sit it out on the sidelines.

Clearly, elevated global interest rates do pose a challenge to the outlook of a growth-orientated asset like emerging markets and geopolitics have weighed heavily on Chinese stocks and on companies in the semiconductor space. Underneath it all, Asia and emerging markets, particularly China, have simply struggled to produce the per-share earnings growth that their economic growth deserved. Meanwhile, markets like the U.S. have been outperforming consistently.

So you could be forgiven for questioning the rationale for staying invested in emerging markets, particularly as China labors in its recovery. Our economic theory and stock-picking patience have certainly been tested recently but we remain convinced of the long-term opportunities of this asset class. Here’s why.

Emerging markets and interest rates

First, let’s take a look at inflation and interest rates. After having obsessed over inflation and its permanence or transience for the past two years I feel confident in saying two things: first, that two-thirds to three-quarters of the inflation spike we endured was transient and due to supply shocks that are now almost entirely behind us. Second, the resulting permanent inflation is probably running at no more than about 3% in the U.S. and is still declining, in part due to interest rate rises that have already been made. So we can probably say with some confidence that interest rates have peaked. So where does this leave emerging market performance relative to developed markets? Typically it’s not been a favorable environment but only because falling rates are usually associated with cyclical economic weakness. However, I wouldn’t assume this to be the unfolding scenario. If the Fed has indeed pulled off the magic trick of a soft landing, a cycle more tilted to growth may play out—and I don’t see many in the market prepared for that. So that could be a tailwind at large for emerging markets.

Growth after a soft landing

The Fed’s rate moves are, of course, are only half the story for emerging markets. What about their central banks? Here there are two plot lines in motion. In the rate hike camp, Brazil got a better start even than the U.S. and Mexico, too, has brought a lot of credibility to macro management over the past few years. So the speed of the decline in interest rates in the U.S. is likely to be matched or even exceeded in these countries as inflation falls rapidly and at the same time the growth prospects of these economies look intact. The other plot line is in Asia, where inflation has been much less of an issue. Countries like Indonesia and India have done a lot to tame exposure to international rate cycles. As for Japan, I’ve always thought that it needed inflation so it’s not a surprise to see its equity markets doing quite well, particularly as the yen has strengthened.

India, Brazil, and Japan have been among the bright spots in emerging and international markets and there is no reason to suspect that any of them will hit harder times if the U.S. dollar remains weak and Fed rates come down.

And what about the elephant in the room, China. The world’s second biggest economy has no inflation. If anything inflation is too low. Core inflation, excluding food and energy, is at 0.4% year-on-year. The inflation rate is low partly due to the fact that China is emerging steadily but cautiously from COVID lockdown. It is emerging cautiously as the government doesn’t want to overstimulate the economy in the way that (arguably) some western nations did.


4		MATTHEWS ASIA FUNDS

China’s challenges

So China is in quite a different macro space and that brings opportunities and challenges. The trick for China is to get incomes (and with it consumer demand) onto a sustainably rising trend, at least in line with nominal gross domestic product growth. I think China understands this and there has been a renewed focus of late in promoting an environment favorable to private enterprise. The private sector is key for the government as it holds in its hands the fate of the vast majority of urban employment and therefore the fate of the China Communist’s Party’s urban popularity, which took a big hit in the later stages of the pandemic.

China may also have to be more aggressive in its attempts to spur quality growth, from the point of view of a balanced macroeconomic policy and return on investment. Just look at the concrete steps taken in India and Mexico, in particular on macroeconomic policy, and in places like Japan and South Korea, in terms of pressure on companies to improve corporate governance and shareholder returns. China has done better on these kind of things of late but it has achieved neither the fanfare nor the practical success that some of its neighbors have.

The other driver of global market sentiment is geopolitics, of course. As we have been at pains to point out there seems little reason to expect things to improve any time soon. Indeed, further sanctions or trade controls seem to be pushing the U.S. and China into separate blocs with the result that economics and investment returns may become less correlated. As investors in emerging markets, I think we have to accept this truth and position portfolios and devise investment strategies that are more in tune with, and cognizant of, the growing importance of domestic policies.

Good businesses at good prices

Ultimately, investing in global and emerging markets is all down to finding companies. And the sluggishness of China’s economic growth and the skepticism towards it, belies the fact that there are still many good companies to be found. The sheer size of the market and the need for a bottom-up portfolio manager to find a tiny portion of good businesses means that short-term skepticism can often lead to good prices for good businesses. From our point of view, China still offers significant opportunities for the long-term investor. So, despite the better performance and perhaps superior short-term outlook in Japan and India, our regional portfolios will more often than not maintain a balance between the major markets.

In recent times, the bigger macro picture has determined to large degrees the trajectory of many equity markets regardless of the performance of their companies. In the falling rate cycle of the pandemic only growth was rewarded, profitable or otherwise. As rates rose, the environment favored more cyclical businesses. I suspect these unusually sharp style cycles are a symptom of the unusually severe and severely unusual inflation and growth cycles we’ve experienced. I think these will dampen down and the inflation cycle will normalize.

It has been a trial for quality growth stock picking and I expect the next few years will be a little easier. And it is quality growth that is shared across all we do. Yes, some of our portfolios are more exposed to emerging businesses and smaller companies. Some portfolios skew to income or established and predictable growth. But the core remains finding good businesses with sensible management, where we can be comfortable with the valuation we are paying. As strategic emerging market investors, we stand by our method, in both favorable times and trying times.

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Robert Horrocks, PhD

Chief Investment Officer

Matthews International Capital Management, LLC


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PORTFOLIO MANAGERS

John Paul Lech		Alex Zarechnak
Lead Manager		Lead Manager

Andrew Mattock, CFA		Peeyush Mittal, CFA
Co-Manager		Co-Manager

FUND FACTS

Ticker		MEM
CUSIP		577125818
Inception Date		07/13/22
Gross Expense Ratio		0.79%
# of Positions		57
Net Assets		$57.5 million
Portfolio Turnover		15.5%
Weight Average Market Cap		$111.5 billion
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 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.

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 Equity Active ETF (unaudited)

PERFORMANCE AS OF JUNE 30, 2023

Actual Return,
Not Annualized

3 Months

YTD

1 Year

Since
Inception

Inception
date

Emerging Markets Equity Active ETF (NAV)¹

2.18%

5.14%

n.a.

11.06%

07/13/22

Emerging Markets Equity Active ETF (market price)

3.11%

5.41%

n.a.

12.06%

MSCI Emerging Markets Index²

1.04%

5.10%

n.a.

5.02%

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.

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 18 for index definition.

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 sold, shares may be worth more or less than their original cost. For the Fund’s most recent month-end performance visit matthewsasia.com.



TOP TEN HOLDINGS³
	Country	% of Net Assets
Samsung Electronics Co., Ltd., Pfd.	South Korea		6.6%
Taiwan Semiconductor Manufacturing Co., Ltd.	Taiwan		5.6%
Tencent Holdings, Ltd.	China		4.1%
Prologis Property Mexico SA de CV REIT	Mexico		3.5%
HDFC Bank, Ltd. ADR	India		3.4%
FPT Corp.	Vietnam		2.9%
Prudential PLC	United Kingdom		2.8%
Woodside Energy Group, Ltd.	Australia		2.6%
AIA Group, Ltd.	Hong Kong		2.5%
ICICI Bank, Ltd. ADR	India		2.5%
Total			36.5%



COUNTRY ALLOCATION (%)^4.5
India			16.6
China/Hong Kong			16.4
Mexico			9.4
Brazil			8.8
South Korea			7.2
Taiwan			6.6
Vietnam			5.1
United States			4.5
France			3.6
United Kingdom			2.8
Australia			2.6
Philippines			2.2
Indonesia			2.1
Poland			1.9
Singapore			1.7
Switzerland			1.4
Zambia			1.3
Kazakhstan			1.2
United Arab Emirates			1.0
Thailand			0.9
Cash and Other Assets, Less Liabilities			2.8



SECTOR ALLOCATION (%)⁵
Financials			23.7
Information Technology			20.7
Consumer Discretionary			13.1
Materials			10.4
Industrials			6.4
Energy			4.8
Real Estate			4.8
Consumer Staples			4.7
Health Care			4.6
Communication Services			4.1
Cash and Other Assets, Less Liabilities			2.8



MARKET CAP EXPOSURE (%)⁵
Mega Cap (over $25B)			55.4
Large Cap ($10B-$25B)			15.2
Mid Cap ($3B-10B)			18.4
Small Cap (under $3B)			8.2
Cash and Other Assets, Less Liabilities			2.8


6		Matthews Emerging Markets Equity Active ETF

Matthews Emerging Markets Equity Active ETF

June 30, 2023

Schedule of Investments^a (unaudited)

COMMON EQUITIES: 91.6%


	Shares		Value

INDIA: 16.6%
HDFC Bank, Ltd. ADR		27,933		$1,946,930
ICICI Bank, Ltd. ADR		62,411		1,440,446
Infosys, Ltd. ADR		75,827		1,218,540
Kotak Mahindra Bank, Ltd.		38,897		875,531
PI Industries, Ltd.		17,357		829,753
Dabur India, Ltd.		118,484		827,505
Restaurant Brands Asia, Ltd.^b		563,905		740,314
UltraTech Cement, Ltd.		7,312		739,322
Indian Hotels Co., Ltd.		112,792		539,650
Divi’s Laboratories, Ltd.		8,760		382,664

Total India				9,540,655



CHINA/HONG KONG: 16.4%
Tencent Holdings, Ltd.		55,000		2,327,285
AIA Group, Ltd.		143,000		1,443,394
H World Group, Ltd. ADR^b		24,485		949,528
Yum China Holdings, Inc.		15,709		887,558
Midea Group Co., Ltd. A Shares		104,400		846,807
JD.com, Inc. Class A		42,400		716,351
NARI Technology Co., Ltd. A Shares		224,640		713,310
BYD Co., Ltd. A Shares		16,500		585,783
CSPC Pharmaceutical Group, Ltd.		652,000		566,588
Innovent Biologics, Inc.^b,c,d		97,000		366,383

Total China/Hong Kong				9,402,987



MEXICO: 9.4%
Prologis Property Mexico SA de CV REIT		543,000		2,013,632
GCC SAB de CV		104,000		889,341
Grupo Financiero Banorte SAB de CV Class O		104,700		862,056
Becle SAB de CV		332,700		812,812
Grupo Aeroportuario del Sureste SAB de CV ADR		2,912		808,633

Total Mexico				5,386,474



BRAZIL: 8.8%
Banco BTG Pactual SA		216,600		1,412,120
Vinci Partners Investments, Ltd. Class A		87,949		819,685
Hapvida Participacoes e Investimentos SA^b,c,d		849,100		770,949
Armac Locacao Logistica E Servicos SA		238,900		741,858
Vale SA ADR		54,388		729,887
WEG SA		77,200		604,125

Total Brazil				5,078,624



TAIWAN: 6.6%
Taiwan Semiconductor Manufacturing Co., Ltd.		167,000		3,088,571
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		7,200		726,624

Total Taiwan				3,815,195



VIETNAM: 5.1%
FPT Corp.		450,700		1,643,426
Military Commercial Joint Stock Bank		818,700		701,197
HDBank		766,625		604,589

Total Vietnam				2,949,212



UNITED STATES: 4.5%
Applied Materials, Inc.		7,368		1,064,971
Globant SA^b		5,216		937,419
Freeport-McMoRan, Inc.		14,136		565,440

Total United States				2,567,830


	Shares		Value

FRANCE: 3.6%
TotalEnergies SE ADR		21,409		$1,234,015
LVMH Moet Hennessy Louis Vuitton SE		896		843,614

Total France				2,077,629



UNITED KINGDOM: 2.8%
Prudential PLC		112,223		1,581,550

Total United Kingdom				1,581,550



AUSTRALIA: 2.6%
Woodside Energy Group, Ltd.		65,762		1,507,593

Total Australia				1,507,593



PHILIPPINES: 2.2%
Wilcon Depot, Inc.		1,511,800		661,419
Ayala Corp.		50,880		576,092

Total Philippines				1,237,511



INDONESIA: 2.1%
PT Bank Rakyat Indonesia Persero Tbk		3,380,000		1,223,045

Total Indonesia				1,223,045



POLAND: 1.8%
Dino Polska SA^b,c,d		9,103		1,063,785

Total Poland				1,063,785



SINGAPORE: 1.7%
CapitaLand Investment, Ltd.		291,700		713,435
TDCX, Inc. ADR^b		32,319		255,643
CapitaLand Ascott Trust		19,254		15,365

Total Singapore				984,443



SOUTH KOREA: 1.6%
LG Chem, Ltd.		1,780		901,044

Total South Korea				901,044



SWITZERLAND: 1.4%
Cie Financiere Richemont SA Class A		4,625		783,973

Total Switzerland				783,973



ZAMBIA: 1.3%
First Quantum Minerals, Ltd.		30,500		722,365

Total Zambia				722,365



KAZAKHSTAN: 1.2%
Kaspi.KZ JSC GDR^d		8,639		687,664

Total Kazakhstan				687,664



UNITED ARAB EMIRATES: 1.0%
Fertiglobe PLC		638,793		577,393

Total United Arab Emirates				577,393


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Matthews Emerging Markets Equity Active ETF

June 30, 2023

Schedule of Investments^a (unaudited) (continued)

COMMON EQUITIES (continued)


	Shares		Value

THAILAND: 0.9%
Bangkok Dusit Medical Services Public Co., Ltd. F Shares		690,200		$540,207

Total Thailand				540,207



TOTAL COMMON EQUITIES				52,629,179

(Cost $51,739,270)


PREFERRED EQUITIES: 5.6%

SOUTH KOREA: 5.6%
Samsung Electronics Co., Ltd., Pfd.		71,480		3,227,762

Total South Korea				3,227,762



TOTAL PREFERRED EQUITIES				3,227,762

(Cost $3,109,384)


SHORT-TERM INVESTMENTS: 1.5%

MONEY MARKET FUNDS: 1.5%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.01%^e		837,126		837,126

(Cost $837,126)


TOTAL INVESTMENTS: 98.7%				56,694,067
(Cost $55,685,780)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.3%				767,781


NET ASSETS: 100.0%				$57,461,848

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 June 30, 2023, the aggregate value is $2,201,117, which is 3.83% 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	Rate shown is the current yield as of June 30, 2023.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

JSC	Joint Stock Co.

Pfd.

Preferred

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


8		Matthews Emerging Markets Equity Active ETF

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PORTFOLIO MANAGERS

John Paul Lech		Alex Zarechnak
Lead Manager		Lead Manager

Peeyush Mittal, CFA
Co-Manager

FUND FACTS

Ticker		MEMX
CUSIP		577125792
Inception Date		01/10/23
Gross Expense Ratio		0.79%
# of Positions		50
Net Assets		$5.3 million
Portfolio Turnover		n.a.
Weight Average Market Cap		$108.4 billion
Benchmark
MSCI Emerging Markets ex China 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 emerging market countries excluding China. 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.

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

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

4	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 ex China Active ETF

(unaudited)

PERFORMANCE AS OF JUNE 30, 2023

Actual Return,
Not Annualized

3 Months

1 Year

Since
Inception

Inception
date

Emerging Markets ex China Active ETF (NAV)

6.38%

n.a.

6.04%

01/10/23

Emerging Markets ex China Active ETF (market price)

6.74%

n.a.

7.08%

MSCI Emerging Markets ex China Index¹

6.23%

n.a.

5.67%



TOP TEN HOLDINGS²
	Country	% of Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd. ADR	Taiwan		9.9%
Samsung Electronics Co., Ltd., Pfd.	South Korea		6.1%
HDFC Bank, Ltd. ADR	India		4.0%
Prologis Property Mexico SA de CV REIT	Mexico		3.6%
FPT Corp.	Vietnam		3.4%
Prudential PLC	United Kingdom		3.0%
Banco BTG Pactual SA	Brazil		3.0%
Woodside Energy Group, Ltd.	Australia		2.9%
Infosys, Ltd. ADR	India		2.8%
ICICI Bank, Ltd. ADR	India		2.7%
Total			41.4%



COUNTRY ALLOCATION (%)^3,4
India			20.9
Brazil			10.3
Mexico			10.0
Taiwan			9.9
South Korea			8.7
Vietnam			5.9
United States			5.0
France			4.0
United Kingdom			3.7
Australia			2.9
Philippines			2.6
Indonesia			2.4
United Arab Emirates			2.4
Poland			2.1
Switzerland			1.7
Zambia			1.3
Kazakhstan			1.3
Singapore			1.2
Thailand			1.0
Turkey			0.2
Cash and Other Assets, Less Liabilities			2.4



SECTOR ALLOCATION (%)⁴
Information Technology			26.1
Financials			24.2
Materials			12.6
Consumer Discretionary			9.6
Consumer Staples			6.1
Energy			5.3
Industrials			5.1
Real Estate			4.9
Health Care			3.8
Cash and Other Assets, Less Liabilities			2.4



MARKET CAP EXPOSURE (%)⁴
Mega Cap (over $25B)			52.3
Large Cap ($10B-$25B)			15.0
Mid Cap ($3B-10B)			21.4
Small Cap (under $3B)			8.8
Cash and Other Assets, Less Liabilities			2.4


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Matthews Emerging Markets ex China Active ETF

June 30, 2023

Schedule of Investments^a (unaudited)

COMMON EQUITIES: 91.5%


	Shares		Value

INDIA: 20.9%
HDFC Bank, Ltd. ADR		3,027		$210,982
Infosys, Ltd. ADR		9,133		146,767
ICICI Bank, Ltd. ADR		6,277		144,873
Kotak Mahindra Bank, Ltd.		4,454		100,255
PI Industries, Ltd.		1,867		89,252
UltraTech Cement, Ltd.		872		88,169
Restaurant Brands Asia, Ltd.^b		62,641		82,237
Dabur India, Ltd.		11,707		81,763
Divi’s Laboratories, Ltd.		1,446		63,166
Indian Hotels Co., Ltd.		13,109		62,720
Hindustan Unilever, Ltd.		1,121		36,596

Total India				1,106,780



BRAZIL: 10.3%
Banco BTG Pactual SA		24,200		157,772
Vinci Partners Investments, Ltd. Class A		9,590		89,379
Vale SA ADR		6,420		86,156
Hapvida Participacoes e Investimentos SA^b,c,d		90,100		81,807
Armac Locacao Logistica E Servicos SA		21,700		67,385
WEG SA		8,300		64,951

Total Brazil				547,450



MEXICO: 10.0%
Prologis Property Mexico SA de CV REIT		52,100		193,205
GCC SAB de CV		10,800		92,354
Grupo Financiero Banorte SAB de CV Class O		11,100		91,393
Becle SAB de CV		33,000		80,621
Grupo Aeroportuario del Sureste SAB de CV ADR		259		71,922

Total Mexico				529,495



TAIWAN: 9.9%
Taiwan Semiconductor Manufacturing Co., Ltd. ADR		5,196		524,380

Total Taiwan				524,380



VIETNAM: 5.9%
FPT Corp.		48,800		177,944
Military Commercial Joint Stock Bank		79,200		67,833
HDBank		84,000		66,245

Total Vietnam				312,022



UNITED STATES: 5.0%
Globant SA^b		591		106,215
Applied Materials, Inc.		732		105,803
Freeport-McMoRan, Inc.		1,371		54,840

Total United States				266,858



FRANCE: 4.0%
TotalEnergies SE ADR		2,188		126,116
LVMH Moet Hennessy Louis Vuitton SE		91		85,680

Total France				211,796



UNITED KINGDOM: 3.0%
Prudential PLC		11,312		159,419

Total United Kingdom				159,419


	Shares		Value

AUSTRALIA: 2.9%
Woodside Energy Group, Ltd.		6,749		$154,721

Total Australia				154,721



SOUTH KOREA: 2.6%
LG Chem, Ltd.		177		89,598
Kia Corp.		748		50,240

Total South Korea				139,838



PHILIPPINES: 2.6%
Wilcon Depot, Inc.		157,000		68,688
Ayala Corp.		5,970		67,596

Total Philippines				136,284



INDONESIA: 2.4%
PT Bank Rakyat Indonesia Persero Tbk		353,900		128,058

Total Indonesia				128,058



UNITED ARAB EMIRATES: 2.4%
Americana Restaurants International PLC		57,390		66,092
Fertiglobe PLC		65,529		59,230

Total United Arab Emirates				125,322



POLAND: 2.1%
Dino Polska SA^b,c,d		951		111,135

Total Poland				111,135



SWITZERLAND: 1.7%
Cie Financiere Richemont SA Class A		538		91,195

Total Switzerland				91,195



ZAMBIA: 1.3%
First Quantum Minerals, Ltd.		2,900		68,684

Total Zambia				68,684



KAZAKHSTAN: 1.3%
Kaspi.KZ JSC GDR^d		849		67,580

Total Kazakhstan				67,580



SINGAPORE: 1.2%
CapitaLand Investment, Ltd.		26,000		63,590
CapitaLand Ascott Trust		1,819		1,452

Total Singapore				65,042



THAILAND: 1.1%
Bangkok Dusit Medical Services Public Co., Ltd. F Shares		70,300		55,023

Total Thailand				55,023



CHILE: 0.7%
Antofagasta PLC		2,037		37,836

Total Chile				37,836


10		Matthews Emerging Markets ex China Active ETF

Matthews Emerging Markets ex China Active ETF

June 30, 2023

Schedule of Investments^a (unaudited) (continued)

COMMON EQUITIES (continued)


	Shares		Value

TURKEY: 0.2%
BIM Birlesik Magazalar AS^b		1,900		$12,426

Total Turkey				12,426



TOTAL COMMON EQUITIES				4,851,344

(Cost $4,590,695)


PREFERRED EQUITIES: 6.1%

SOUTH KOREA: 6.1%
Samsung Electronics Co., Ltd., Pfd.		7,162		323,409

Total South Korea				323,409



TOTAL PREFERRED EQUITIES				323,409

(Cost $312,952)


SHORT-TERM INVESTMENTS: 1.8%

MONEY MARKET FUNDS: 1.8%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.01%^e		96,693		96,693

(Cost $96,693)


TOTAL INVESTMENTS: 99.4%				5,271,446
(Cost $5,000,340)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.6%				30,681


NET ASSETS: 100.0%				$5,302,127

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	Rate shown is the current yield as of June 30, 2023.

ADR	American Depositary Receipt

GDR	Global Depositary Receipt

JSC	Joint Stock Co.

Pfd.

Preferred

REIT	Real Estate Investment Trust

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			11

LOGO


PORTFOLIO MANAGERS

Michael J. Oh, CFA
Lead Manager

Taizo Ishida		Inbok Song
Co-Manager		Co-Manager

FUND FACTS

Ticker		MINV
CUSIP		577125826
Inception Date		07/13/22
Gross Expense Ratio		0.79%
# of Positions		50
Net Assets		$135.4 million
Portfolio Turnover		72.6%
Weight Average Market Cap		$193.6 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.

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

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

4	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 Active ETF (unaudited)

PERFORMANCE AS OF JUNE 30, 2023

Actual Return,
Not Annualized

3 Months

YTD

1 Year

Since
Inception

Inception
date

Asia Innovators Active ETF (NAV)

-4.66%

-2.85%

n.a.

-5.80%

07/13/22

Asia Innovators Active ETF (market price)

-4.16%

-2.35%

n.a.

-5.12%

MSCI AC Asia ex Japan Index¹

-1.14%

3.19%

n.a.

1.71%



TOP TEN HOLDINGS²
Name	Country	% Net Assets
Taiwan Semiconductor Manufacturing Co., Ltd.	Taiwan		8.0%
Samsung Electronics Co., Ltd.	South Korea		6.2%
Tencent Holdings, Ltd.	China		4.4%
HDFC Bank, Ltd.	India		4.3%
Alibaba Group Holding, Ltd. ADR	China		3.9%
NVIDIA Corp.	United States		3.2%
Trip.com Group, Ltd. ADR	China		3.0%
ICICI Bank, Ltd.	India		3.0%
ASML Holding NV	Netherlands		3.0%
Meituan B Shares	China		2.9%
Total			41.9%



COUNTRY ALLOCATION (%)^3,4
China			33.7
India			18.1
United States			11.3
South Korea			11.0
Taiwan			9.5
Netherlands			3.0
Indonesia			2.7
Japan			2.4
France			2.0
Singapore			1.9
Vietnam			1.1
Cash and Other Assets, Less Liabilities			3.1



SECTOR ALLOCATION (%)⁴
Information Technology			30.5
Consumer Discretionary			26.5
Financials			12.8
Communication Services			10.5
Consumer Staples			4.5
Industrials			4.4
Health Care			3.6
Energy			2.1
Real Estate			2.0
Cash and Other Assets, Less Liabilities			3.1



MARKET CAP EXPOSURE (%)⁴
Mega Cap (over $25B)			72.6
Large Cap ($10B-$25B)			11.4
Mid Cap ($3B-10B)			10.3
Small Cap (under $3B)			2.6
Cash and Other Assets, Less Liabilities			3.1


12		Matthews Asia Innovators Active ETF

Matthews Asia Innovators Active ETF

June 30, 2023

Schedule of Investments^a (unaudited)

COMMON EQUITIES: 96.2%


	Shares		Value

CHINA/HONG KONG: 33.7%
Tencent Holdings, Ltd.		139,800		$5,915,535

Alibaba Group Holding, Ltd. ADR^b		62,942		5,246,216

Trip.com Group, Ltd. ADR^b		116,920		4,092,200

Meituan B Shares^b,c,d		251,020		3,917,483

PDD Holdings, Inc. ADR^b		49,292		3,408,049

KE Holdings, Inc. ADR^b		180,619		2,682,192

NARI Technology Co., Ltd. A Shares		637,080		2,022,949

OPT Machine Vision Tech Co., Ltd. A Shares		88,974		2,014,640

Yum China Holdings, Inc.		31,775		1,795,287

BYD Co., Ltd. A Shares		50,500		1,792,851

Contemporary Amperex Technology Co., Ltd. A Shares		56,000		1,761,181

Baidu, Inc. ADR^b		12,448		1,704,256

Proya Cosmetics Co., Ltd. A Shares		100,780		1,557,111

Hundsun Technologies, Inc. A Shares		253,900		1,545,779

China Resources Beer Holdings Co., Ltd.		212,000		1,395,911

BeiGene, Ltd. ADR^b		7,656		1,365,065

Kuaishou Technology^b,c,d		195,700		1,337,281

Innovent Biologics, Inc.^b,c,d		290,500		1,097,262

Legend Biotech Corp. ADR^b		14,582		1,006,595

Total China/Hong Kong				45,657,843



INDIA: 18.1%
HDFC Bank, Ltd.		278,885		5,783,967

ICICI Bank, Ltd.		357,618		4,074,172

Bajaj Finance, Ltd.		41,912		3,658,323

Reliance Industries, Ltd.		91,582		2,846,997

Mahindra & Mahindra, Ltd.		153,185		2,714,284

Titan Co., Ltd.		59,487		2,209,944

Indian Hotels Co., Ltd.		348,116		1,665,551

Ashok Leyland, Ltd.		756,971		1,544,646

Total India				24,497,884



SOUTH KOREA: 10.3%
Samsung Electronics Co., Ltd.		154,272		8,453,260

Samsung SDI Co., Ltd.		4,043		2,052,720

Kia Corp.		26,181		1,758,448

Orion Corp.		18,022		1,641,286

Total South Korea				13,905,714



TAIWAN: 9.5%
Taiwan Semiconductor Manufacturing Co., Ltd.		585,000		10,819,246

Alchip Technologies, Ltd.		36,000		2,074,844

Total Taiwan				12,894,090



UNITED STATES: 9.1%
NVIDIA Corp.		10,349		4,377,834

Netflix, Inc.^b		6,025		2,653,952

Visa, Inc. Class A		9,392		2,230,412

Monolithic Power Systems, Inc.		3,016		1,629,334

Lululemon Athletica, Inc.^b		3,598		1,361,843

Total United States				12,253,375



JAPAN: 3.5%
Keyence Corp.		4,000		1,877,746

Allegro MicroSystems, Inc.^b		32,107		1,449,310

Asahi Intecc Co., Ltd.		73,400		1,427,525

Total Japan				4,754,581


	Shares		Value

NETHERLANDS: 3.0%
ASML Holding NV		5,614		$4,068,747

Total Netherlands				4,068,747



INDONESIA: 2.7%
PT Bank Rakyat Indonesia Persero Tbk		4,353,100		1,575,159

PT Indofood CBP Sukses Makmur Tbk		2,030,500		1,533,794

PT Astra International Tbk		1,280,000		578,423

Total Indonesia				3,687,376



FRANCE: 2.0%
LVMH Moet Hennessy Louis Vuitton SE		2,843		2,676,779

Total France				2,676,779



SINGAPORE: 1.9%
Sea, Ltd. ADR^b		45,034		2,613,773

Total Singapore				2,613,773



BRAZIL: 1.2%
MercadoLibre, Inc.^b		1,392		1,648,963

Total Brazil				1,648,963



VIETNAM: 1.2%
Mobile World Investment Corp.		837,800		1,538,128

Total Vietnam				1,538,128



TOTAL COMMON EQUITIES				130,197,253

(Cost $121,988,712)


PREFERRED EQUITIES: 0.7%

SOUTH KOREA: 0.7%
Samsung Electronics Co., Ltd., Pfd.		21,930		990,274

Total South Korea				990,274



TOTAL PREFERRED EQUITIES				990,274

(Cost $1,004,337)


SHORT-TERM INVESTMENTS: 1.5%


MONEY MARKET FUNDS: 1.5%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.01%^e		2,052,458		2,052,458


(Cost $2,052,458)

TOTAL INVESTMENTS: 98.4%				133,239,985
(Cost $125,045,507)


CASH AND OTHER ASSETS, LESS LIABILITIES: 1.6%				2,179,065


NET ASSETS: 100.0%				$135,419,050


				matthewsasia.com \| 833.228.5605			13

Matthews Asia Innovators Active ETF

June 30, 2023

Schedule of Investments^a (unaudited) (continued)

COMMON EQUITIES (continued)

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	Rate shown is the current yield as of June 30, 2023.

ADR	American Depositary Receipt

Pfd.

Preferred

See accompanying notes to financial statements.


14		Matthews Asia Innovators 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%
# of Positions				48
Net Assets				$29.9 million
Portfolio Turnover				12.5%
Weight Average Market Cap				$97.4 billion
Benchmark
MSCI China Index
MSCI China All Shares Index

OBJECTIVE

Long-term capital appreciation.

STRATEGY

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

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

4	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 Active ETF (unaudited)



PERFORMANCE AS OF JUNE 30, 2023
							Actual Return, Not Annualized
	3 Months		YTD		1 Year		Since Inception		Inception date
China Active ETF (NAV)		-13.80%		-13.73%		n.a.		-17.04%		07/13/22
China Active ETF (market price)		-13.25%		-13.57%		n.a.		-16.44%
MSCI China Index¹		-9.65%		-5.39%		n.a.		-12.59%
MSCI China All Shares Index¹		-9.79%		-5.27%		n.a.		-14.24%



TOP TEN HOLDINGS²
Name	Country	% Net Assets
Alibaba Group Holding, Ltd.	Consumer Discretionary		8.0%
Tencent Holdings, Ltd.	Communication Services		7.8%
PDD Holdings, Inc. ADR	Consumer Discretionary		5.3%
Meituan B Shares	Consumer Discretionary		5.3%
JD.com, Inc. Class A	Consumer Discretionary		4.6%
China Merchants Bank Co., Ltd. A Shares	Financials		4.4%
CITIC Securities Co., Ltd. H Shares	Financials		3.7%
China International Capital Corp., Ltd. H Shares	Financials		3.6%
KE Holdings, Inc. ADR	Real Estate		3.4%
Contemporary Amperex Technology Co., Ltd. A Shares	Industrials		2.9%
Total			49.0%



COUNTRY ALLOCATION (%)^3,4
China/Hong Kong			98.3
Cash and Other Assets, Less Liabilities			1.7



SECTOR ALLOCATION (%)⁴
Consumer Discretionary			31.1
Financials			18.6
Communication Services			13.9
Industrials			8.8
Real Estate			6.5
Information Technology			6.1
Consumer Staples			5.7
Health Care			4.6
Energy			1.8
Utilities			1.2
Cash and Other Assets, Less Liabilities			1.7



MARKET CAP EXPOSURE (%)⁴
Mega Cap (over $25B)			59.9
Large Cap ($10B-$25B)			25.7
Mid Cap ($3B-10B)			7.8
Small Cap (under $3B)			4.9
Cash and Other Assets, Less Liabilities			1.7


				matthewsasia.com \| 833.228.5605			15

Matthews China Active ETF

June 30, 2023

Schedule of Investments^a (unaudited)

COMMON EQUITIES: 98.4%


	Shares		Value

CONSUMER DISCRETIONARY: 31.1%
Broadline Retail: 17.9%

Alibaba Group Holding, Ltd.^b		231,300		$2,396,647

PDD Holdings, Inc. ADR^b		22,846		1,579,572

JD.com, Inc. Class A		81,200		1,371,881

				5,348,100


Hotels, Restaurants & Leisure: 8.2%

Meituan B Shares^b,c,d		100,910		1,574,828

Galaxy Entertainment Group, Ltd.^b		82,000		520,047

H World Group, Ltd. ADR^b		9,090		352,510

				2,447,385


Household Durables: 1.7%

Man Wah Holdings, Ltd.		550,000		367,060

Midea Group Co., Ltd. A Shares		18,800		152,265

				519,325


Automobiles: 1.5%

Yadea Group Holdings, Ltd.^c,d		196,000		445,693


Diversified Consumer Services: 1.0%

China Education Group Holdings, Ltd.^d		367,000		285,672


Specialty Retail: 0.8%
China Tourism Group Duty Free Corp., Ltd. A Shares		16,300		247,655

Total Consumer Discretionary				9,293,830



FINANCIALS: 18.6%
Capital Markets: 9.1%

CITIC Securities Co., Ltd. H Shares		613,000		1,110,762
China International Capital Corp., Ltd. H Shares^c,d		609,600		1,068,819

Hong Kong Exchanges & Clearing, Ltd.		7,800		293,821

East Money Information Co., Ltd. A Shares		122,640		239,387

				2,712,789


Banks: 6.9%

China Merchants Bank Co., Ltd. A Shares		290,800		1,309,535

China Construction Bank Corp. H Shares		1,171,000		757,595

				2,067,130


Insurance: 2.6%

PICC Property & Casualty Co., Ltd. H Shares		428,000		475,701
Ping An Insurance Group Co. of China, Ltd. H Shares		46,500		295,795

				771,496

Total Financials				5,551,415



COMMUNICATION SERVICES: 13.9%
Interactive Media & Services: 9.4%

Tencent Holdings, Ltd.		54,800		2,318,822

Kuaishou Technology^b,c,d		71,600		489,266

				2,808,088


	Shares		Value
Media: 2.9%
Focus Media Information Technology Co., Ltd. A Shares		657,811		615,782

Three’s Co Media Group Co., Ltd. A Shares		21,895		$258,654

				874,436


Entertainment: 1.6%

Tencent Music Entertainment Group ADR^b		43,695		322,469

Bilibili, Inc. ADR^b		9,920		149,792
				472,261

Total Communication Services				4,154,785



INDUSTRIALS: 8.8%
Electrical Equipment: 4.9%
Contemporary Amperex Technology Co., Ltd. A Shares		27,900		877,445

Sungrow Power Supply Co., Ltd. A Shares		36,300		581,964

				1,459,409


Machinery: 2.6%
Shenzhen Inovance Technology Co., Ltd. A Shares		50,400		444,848

Estun Automation Co., Ltd. A Shares		86,600		333,315

				778,163


Transportation Infrastructure: 1.3%
Shanghai International Airport Co., Ltd. A Shares^b		62,552		390,542

Total Industrials				2,628,114



REAL ESTATE: 6.5%
Real Estate Management & Development: 6.5%

KE Holdings, Inc. ADR^b		69,011		1,024,813

Country Garden Services Holdings Co., Ltd.		284,000		366,751

CIFI Holdings Group Co., Ltd.^e		4,668,000		348,346

Times China Holdings, Ltd.^b		2,255,000		204,304

Total Real Estate				1,944,214



INFORMATION TECHNOLOGY: 6.1%
Electronic Equipment, Instruments & Components: 2.4%

Zhejiang Supcon Technology Co., Ltd. A Shares		49,817		429,911

Wingtech Technology Co., Ltd. A Shares		43,200		290,383

				720,294


Semiconductors & Semiconductor Equipment: 2.1%

NAURA Technology Group Co., Ltd. A Shares		7,387		322,549
Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. A Shares		31,603		308,002

				630,551


Software: 1.6%

Shanghai Baosight Software Co., Ltd. A Shares		68,256		476,726

Total Information Technology				1,827,571



CONSUMER STAPLES: 5.7%
Beverages: 4.1%

Wuliangye Yibin Co., Ltd. A Shares		23,200		521,640

Tsingtao Brewery Co., Ltd. H Shares		46,000		417,936
Shanxi Xinghuacun Fen Wine Factory Co., Ltd. A Shares		11,600		295,102

				1,234,678


16		Matthews China Active ETF

Matthews China Active ETF

June 30, 2023

Schedule of Investments^a (unaudited) (continued)

COMMON EQUITIES (continued)


	Shares		Value
Consumer Staples Distribution & Retail: 1.6%
JD Health International, Inc.^b,c,d		73,200		$461,902

Total Consumer Staples				1,696,580



HEALTH CARE: 4.6%
Health Care Equipment & Supplies: 1.8%
Shenzhen Mindray Bio-Medical Electronics Co., Ltd. A Shares		13,000		535,740


Life Sciences Tools & Services: 1.7%
Wuxi Biologics Cayman, Inc.^b,c,d		108,000		517,495


Health Care Providers & Services: 1.1%
Sinopharm Group Co., Ltd. H Shares		104,000		325,141

Total Health Care				1,378,376



ENERGY: 1.9%
Oil, Gas & Consumable Fuels: 1.9%
PetroChina Co., Ltd. H Shares		786,000		543,618

Total Energy				543,618



UTILITIES: 1.2%
Gas Utilities: 1.2%
ENN Energy Holdings, Ltd.		28,700		357,441

Total Utilities				357,441



TOTAL COMMON EQUITIES				29,375,944

(Cost $35,621,036)


SHORT-TERM INVESTMENTS: 1.3%

MONEY MARKET FUNDS: 1.3%
JPMorgan U.S. Government Money Market Fund, Capital Shares, 5.01%^f		395,006		395,006

(Cost $395,006)


TOTAL INVESTMENTS: 99.7%				29,770,950
(Cost $36,016,042)


CASH AND OTHER ASSETS, LESS LIABILITIES: 0.3%				100,972


NET ASSETS: 100.0%				$29,871,922

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 security is $348,346 and 1.17% of net assets.

f	Rate shown is the current yield as of June 30, 2023.

ADR	American Depositary Receipt

See accompanying notes to financial statements.


				matthewsasia.com \| 833.228.5605			17

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 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 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.


18		MATTHEWS ASIA FUNDS

Disclosures

Fund Holdings: The Fund holdings shown in this report are as of June 30, 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 833.228.5605.

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 833.228.5605, 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 833.228.5605.

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:

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 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.

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.


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June 30, 2023

Disclosure of Fund Expenses (unaudited) (continued)



	Beginning Account Value 1/1/23		Ending Account Value 6/30/23		Expense Ratio		Operating Expenses Paid During Period 1/1/23– 6/30/23

Matthews Emerging Markets Equity Active ETF
Actual Fund Return		$1,000.00		$1,054.10		0.79%		$4.02
Hypothetical 5% Returns		$1,000.00		$1,020.88		0.79%		$3.96
Matthews Emerging Markets ex China Active ETF^1,2
Actual Fund Return		$1,000.00		$1,070.80		0.79%		$4.06
Hypothetical 5% Returns		$1,000.00		$1,020.88		0.79%		$3.96
Matthews Asia Innovators Active ETF
Actual Fund Return		$1,000.00		$976.50		0.79%		$3.87
Hypothetical 5% Returns		$1,000.00		$1,020.88		0.79%		$3.96
Matthews China Active ETF
Actual Fund Return		$1,000.00		$864.30		0.79%		$3.65
Hypothetical 5% Returns		$1,000.00		$1,020.88		0.79%		$3.96

1	Annualized from Fund’s inception, January 10, 2023.

The Fund commenced operations on January 10, 2023. Operating expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 171 days, then divided by 365. The hypothetical expense example is based on the half-year period beginning January 1, 2023, as required by the SEC.


20		MATTHEWS ASIA FUNDS

Statements of Assets and Liabilities (unaudited)

June 30, 2023


	Matthews Emerging Markets Equity Active ETF		Matthews Emerging Markets ex China Active ETF		Matthews Asia Innovators Active ETF			Matthews China Active ETF

ASSETS:

Investments at value (A) (Note 2-A):

Unaffiliated issuers		$56,694,067		$5,271,446		$133,239,985			$29,770,950

Cash		1,584,562		22,891		290,907			4,142

Segregated foreign currency at value		80,028		—		37,214			47

Foreign currency at value (B)		28		3		966,078			—

Dividends and interest receivable		81,715		9,096		183,598			120,839

Receivable for securities sold		129,074		13,131		7,698,285			—

Other receivable		449		—		370			—
TOTAL ASSETS		58,569,923		5,316,567		142,416,437			29,895,978

LIABILITIES:

Payable for securities purchased		1,043,245		4,899		6,852,306			4,118

Deferred foreign capital gains tax liability (Note 2-C)		29,138		6,341		56,510			—

Due to Advisor (Note 4)		35,692		3,200		88,571			19,938
TOTAL LIABILITIES		1,108,075		14,440		6,997,387			24,056

NET ASSETS		$57,461,848		$5,302,127		$135,419,050			$29,871,922

SHARES OUTSTANDING:

(shares of beneficial interest issued and outstanding, respectively, unlimited number of shares authorized with a $0.001 par value)		2,080,000		200,000		5,750,000			1,440,000

Net asset value, offering price and redemption price		27.63		26.51		23.55			20.74

NET ASSETS CONSISTS OF:

Capital paid-in		$56,884,532		$5,049,714		$140,979,727			$37,066,091

Total distributable earnings/(accumulated loss)		577,316		252,413		(5,560,677	)		(7,194,169	)

NET ASSETS		$57,461,848		$5,302,127		$135,419,050			$29,871,922

(A) Investments at cost: Unaffiliated Issuers		$55,685,780		$5,000,340		$125,045,507			$36,016,042

(B) Foreign Currency at Cost		$28		$3		$966,078			$—

See accompanying notes to financial statements.


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Statements of Operations (unaudited)

Period Ended June 30, 2023


	Matthews Emerging Markets Equity Active ETF			Matthews Emerging Markets ex China Active ETF			Matthews Asia Innovators Active ETF			Matthews China Active ETF

INVESTMENT INCOME:

Dividends—Unaffiliated Issuers		$489,399			$54,695			$702,612			$268,084

Interest		10,289			886			58,927			16,381

Foreign withholding tax		(39,414	)		(4,882	)		(88,543	)		(16,042	)
TOTAL INVESTMENT INCOME		460,274			50,699			672,996			268,423

EXPENSES:

Investment advisory fees (Note 4)		119,015			13,757			522,775			124,453

NET INVESTMENT INCOME (LOSS)		341,259			36,942			150,221			143,970

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY RELATED TRANSACTIONS, AND FOREIGN CAPITAL GAINS TAXES:

Net realized gain (loss) on investments—Unaffiliated Issuers		(912,571	)		(44,292	)		(12,333,495	)		(1,039,498	)

Net realized gain (loss) on in-kind redemptions—Unaffiliated Issuers		229,519			—			—			—

Net realized gain (loss) on foreign currency related transactions		(15,750	)		(5,020	)		(141,854	)		(6,116	)

Net change in unrealized appreciation/depreciation on investments—Unaffiliated Issuers		984,319			271,106			5,900,912			(6,691,096	)

Net change in deferred foreign capital gains taxes on unrealized appreciation/depreciation		(28,965	)		(6,341	)		(60,495	)		—

Net change in unrealized appreciation/depreciation on foreign currency related translations		(465	)		18			1,750			(775	)
Net realized and unrealized gain (loss) on investments, foreign currency related transactions, and foreign capital gains taxes		256,087			215,471			(6,633,182	)		(7,737,485	)

NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS		$597,346			$252,413			($6,482,961	)		($7,593,515	)

See accompanying notes to financial statements.


22		MATTHEWS ASIA FUNDS

Statements of Changes in Net Assets (unaudited)


MATTHEWS EMERGING MARKETS EQUITY ACTIVE ETF	Six-Month Period Ended June 30, 2023 (Unaudited)			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$341,259			$31,792

Net realized gain (loss) on investments, in-kind redemptions and foreign currency related transactions		(698,802	)		(47,523	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		983,854			23,964

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(28,965	)		(173	)

Net increase (decrease) in net assets resulting from operations		597,346			8,060
DISTRIBUTIONS TO SHAREHOLDERS:

Net decrease in net assets resulting from distributions		—			(28,090	)
CAPITAL SHARE TRANSACTIONS (net) (Note 4)		50,560,616			6,323,916

Total increase (decrease) in net assets		51,157,962			6,303,886
NET ASSETS:

Beginning of period		6,303,886			—
End of period		$57,461,848			$6,303,886

1 The Fund commenced operations on July 13, 2022.


MATTHEWS EMERGING MARKETS EX CHINA ACTIVE ETF	For the Period Ended June 30, 2023¹(Unaudited)

OPERATIONS:

Net investment income (loss)		$36,942

Net realized gain (loss) on investments and foreign currency related transactions		(49,312	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		271,124

Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(6,341	)
Net increase (decrease) in net assets resulting from operations		252,413
CAPITAL SHARE TRANSACTIONS (net) (Note 4)		5,049,714
Total increase (decrease) in net assets		5,302,127
NET ASSETS:

Beginning of period		—
End of period		$5,302,127

1 The Fund commenced operations on January 10, 2023.

See accompanying notes to financial statements.


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Statements of Changes in Net Assets (unaudited) (continued)


MATTHEWS ASIA INNOVATORS ACTIVE ETF	Six-Month Period Ended June 30, 2023 (Unaudited)			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$150,221			($34,351	)

Net realized gain (loss) on investments and foreign currency related transactions		(12,475,349	)		(1,392,598	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		5,902,662			2,293,574
Net change on foreign capital gains taxes on unrealized appreciation/depreciation		(60,495	)		—
Net increase (decrease) in net assets resulting from operations		(6,482,961	)		866,625
CAPITAL SHARE TRANSACTIONS (net) (Note 4)		36,462,984			104,572,402
Total increase (decrease) in net assets		29,980,023			105,439,027
NET ASSETS:

Beginning of period		105,439,027			—
End of period		$135,419,050			$105,439,027

1 The Fund commenced operations on July 13, 2022.


MATTHEWS CHINA ACTIVE ETF	Six-Month Period Ended June 30, 2023 (Unaudited)			For the Period Ended December 31, 2022¹

OPERATIONS:

Net investment income (loss)		$143,970			($4,643	)

Net realized gain (loss) on investments and foreign currency related transactions		(1,045,614	)		(47,731	)

Net change in unrealized appreciation/depreciation on investments and foreign currency related translations		(6,691,871	)		446,556
Net increase (decrease) in net assets resulting from operations		(7,593,515	)		394,182
CAPITAL SHARE TRANSACTIONS (net) (Note 4)		27,366,557			9,704,698
Total increase (decrease) in net assets		19,773,042			10,098,880
NET ASSETS:

Beginning of period		10,098,880			—
End of period		$29,871,922			$10,098,880

1 The Fund commenced operations on July 13, 2022.

See accompanying notes to financial statements.


24		MATTHEWS ASIA FUNDS

Financial Highlights

Matthews Emerging Markets Equity Active ETF

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Six-Month Period Ended June 30, 2023 (Unaudited)			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		0.30			0.23
Net realized gain (loss) and unrealized appreciation/depreciation on investments, foreign currency related transactions and foreign capital gains taxes		1.06			1.18
Total from investment operations		1.36			1.41
LESS DISTRIBUTIONS FROM:
Net investment income		—			(0.14	)
Net Asset Value, end of Period		$27.63			$26.27
TOTAL RETURN		5.18%	³		5.63%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$57,462			$6,304
Ratio of expenses to average net assets (Note 5)		0.79%	⁴		0.79%	⁴
Ratio of net investment income (loss) to average net assets		2.27%	⁴		1.93%	⁴
Portfolio turnover		37.64%	³		15.47%	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.


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Financial Highlights (continued)

Matthews Emerging Markets ex China Active ETF

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Period Ended June 30, 2023 (Unaudited)¹
Net Asset Value, beginning of Period		$25.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss)²		0.25
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		1.26
Total from investment operations		1.51
LESS DISTRIBUTIONS FROM:
Net Asset Value, end of Period		$26.51
TOTAL RETURN		6.04%	³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$5,302
Ratio of expenses to average net assets (Note 5)		0.79%	⁴
Ratio of net investment income (loss) to average net assets		2.12%	⁴
Portfolio turnover		15.00%	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.


26		MATTHEWS ASIA FUNDS

Financial Highlights (continued)

Matthews Asia Innovators Active ETF

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Six-Month Period Ended June 30, 2023 (Unaudited)			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		0.03			(0.04	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(0.72	)		(0 72	)
Total from investment operations		(0.69	)		(0.76	)
Net Asset Value, end of Period		$23.55			$24.24
TOTAL RETURN		(2.85%	)³		(3.04%	)³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$135,419			$105,439
Ratio of expenses to average net assets (Note 5)		0.79%	⁴		0.79%	⁴
Ratio of net investment income (loss) to average net assets		0.23%	⁴		(0.33%	)⁴
Portfolio turnover		117.21%	³		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.


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Financial Highlights (continued)

Matthews China Active ETF

The tables below set forth financial data for a share of beneficial interest outstanding throughout each period presented.


	Six-Month Period Ended June 30, 2023 (Unaudited)			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		0.11			(0.03	)
Net realized gain (loss) and unrealized appreciation/depreciation on investments and foreign currency related transactions		(3.41	)		(0 93	)
Total from investment operations		(3.30	)		(0.96	)
Net Asset Value, end of Period		$20.74			$24.04
TOTAL RETURN		(13.73%	)³		(3.84%	)³

RATIOS/SUPPLEMENTAL DATA
Net assets, end of Period (in 000’s)		$29,872			$10,099
Ratio of expenses to average net assets (Note 5)		0.79%	⁴		0.79%	⁴
Ratio of net investment income (loss) to average net assets		0.91%	⁴		(0.24%	)⁴
Portfolio turnover		36.32%	³		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.


28		MATTHEWS ASIA FUNDS

Notes to Financial Statements (unaudited)

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 June 30, 2023, the Trust issued eighteen separate series of shares. This shareholder report pertains to four of those series (each a “Fund”, and collectively, the “Funds”): Matthews Emerging Markets Equity Active ETF, Matthews Emerging Markets ex China Active ETF, Matthews Innovators Active ETF and Matthews China Active ETF. All four Funds are considered diversified. The other fourteen 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.

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 used for internal purposes 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. 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.

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.

Level 3: Significant unobservable inputs. Level 3 securities are valued based on significant unobservable inputs as determined under the direction of 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.

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.


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Notes to Financial Statements (unaudited) (continued)

Levels for Multi-Country Funds:

Summary of inputs used to determine the fair valuation of multi-country Funds’ investments as of June 30, 2023.


	Matthews Emerging Markets Equity Active ETF		Matthews Emerging Markets ex China Active ETF		Matthews Asia Innovators Active ETF
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Australia		$1,507,593		$154,721		$—
Brazil		5,078,624		547,450		1,648,963
Chile		—		37,836		—
China/Hong Kong		9,402,987		—		45,657,843
France		2,077,629		211,796		2,676,779
India		9,540,655		1,106,780		24,497,884
Indonesia		1,223,045		128,058		3,687,376
Japan		—		—		4,754,581
Kazakhstan		687,664		67,580		—
Mexico		5,386,474		529,495		—
Netherlands		—		—		4,068,747
Philippines		1,237,511		136,284		—
Poland		1,063,785		111,135		—
Singapore		984,443		65,042		2,613,773
South Korea		901,044		139,838		13,905,714
Switzerland		783,973		91,195		—
Taiwan		3,815,195		524,380		12,894,090
Turkey		—		12,426		—
United Arab Emirates		577,393		125,322		—
United Kingdom		1,581,550		159,419		—
United States		2,567,830		266,858		12,253,375
Vietnam		2,949,212		312,022		1,538,128
Zambia		722,365		68,684		—
Preferred Equities:
South Korea		3,227,762		323,409		990,274
Short-Term Investments		837,126		96,693		2,052,458
Level 2: Other Significant Observable Inputs
Common Equities:
Thailand		540,207		55,023		—
Total Market Value of Investments		$56,694,067		$5,271,446		$133,239,985


30		MATTHEWS ASIA FUNDS

Notes to Financial Statements (unaudited) (continued)

Levels for Single Country Funds:

Summary of inputs used to determine the fair valuation of the single country Fund’s investments as of June 30, 2023.


	Matthews China Active ETF
Assets:

Investments:
Level 1: Quoted Prices
Common Equities:
Communication Services		$4,154,785
Consumer Discretionary		9,293,829
Consumer Staples		1,696,581
Energy		543,618
Financials		5,551,414
Health Care		1,378,376
Industrials		2,628,116
Information Technology		1,827,570
Real Estate		1,595,868
Utilities		357,441
Short-Term Investments		395,006
Level 3: Significant Unobservable Inputs
Common Equities:
Real Estate		348,346
Total Market Value of Investments		$29,770,950

Changes in the Balances of Level 3 Securities:

The Funds’ policy is to recognize transfers in and transfers out of Level 3 as of the beginning of the reporting period.


	Matthews China Active ETF
	Common Equities— Real Estate
Balance as of 12/31/22 (market value)		$—

Accrued discounts/premiums		—

Realized gain/(loss)		(91,419	)

Change in unrealized appreciation/(depreciation)		(308,428	)

Purchases		632,333

Sales		(71,867	)

Transfers in to Level 3		187,727

Transfer out of Level 3		—
Balance as of 6/30/23 (market value)		$348,346
Net change in unrealized appreciation/depreciation on Level 3 investments held as of 6/30/23		($308,428	)

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 countries within the Asia Pacific region (including in countries where the Funds may invest, as well as in the broader region); international relations with other nations; natural disasters; corruption; and military activity. 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, 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 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 Asia Pacific countries are highly dependent upon and may be affected by developments in the economies of other countries. 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 are the variable quality and reliability of financial information and related audits of companies. Non-U.S. companies are subject to different accounting, auditing, and financial reporting standards, practices, and requirements than U.S. 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.


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Notes to Financial Statements (unaudited) (continued)

Foreign stock markets may not be as developed or efficient as those in 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 country in the Asia Pacific region 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 issuers of fixed income securities may, therefore, repay principal in advance. This would force the Funds to reinvest the proceeds from the principal prepayments at lower rates, which reduces the Funds’ income.

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 June 30, 2023, the Funds did not hold any Russian securities.

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 period ended December 31, 2022 were as follows:

Ordinary

Income

Matthews Emerging Markets Equity Active ETF

$28,090

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.

CASH, CASH OVERDRAFTS, AND FOREIGN CURRENCY: 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. When any of the Funds’ cash balances are overdrawn, a Fund is charged an overdraft fee by the custodian of 1.00% above the 30-day LIBOR rate on outstanding balances. These amounts, if any, are included in “Other expenses” on the Statements of Operations.


32		MATTHEWS ASIA FUNDS

Notes to Financial Statements (unaudited) (continued)

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.

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 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, early adoption is permitted.

Management is currently evaluating the impact, if any, of applying this ASU.

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.


	Six-Month Period Ended June 30, 2023 (Unaudited)						For the Period Ended December 31, 2022¹
	Shares			Amount			Shares		Amount
MATTHEWS EMERGING MARKETS EQUITY ACTIVE ETF

Shares sold		2,460,000			$67,006,002			240,000		$6,323,916

Shares redeemed		(620,000	)		(16,445,386	)		—		—
Net increase		1,840,000			$50,560,616			240,000		$6,323,916
MATTHEWS ASIA INNOVATORS ACTIVE ETF

Shares sold		5,750,000			$36,462,984			4,350,000		$104,572,402

Shares redeemed		—			—			—		—
Net increase		5,750,000			$36,462,984			4,350,000		$104,572,402
MATTHEWS CHINA ACTIVE ETF

Shares sold		1,440,000			$27,366,557			420,000		$9,704,698

Shares redeemed		—			—			—		—
Net increase		1,440,000			$27,366,557			420,000		$9,704,698


	For the Period Ended June 30, 2023²
	Shares		Amount
MATTHEWS EMERGING MARKETS EX CHINA ACTIVE ETF

Shares sold		200,000		$5,049,714

Shares redeemed		—		—
Net increase		200,000		$5,049,714

1	The Fund commenced operations on July 13, 2022.

2	The Fund commenced operations on January 10, 2023.


				matthewsasia.com \| 833.228.5605			33

Notes to Financial Statements (unaudited) (continued)

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. 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:

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