Gl.pt006 montreux0511.final

For institutional use only. Do not give, show or quote to any other person. Not to be used with retail investors. Do not duplicate or reproduce.

© 2011 Matthews International Capital Management, LLC GL.PT006_Montreux_0511

Seeking Dividends from Asia’s Growth

Robert Horrocks, PhD

Chief Investment Officer

May 2011

Performance results, portfolio characteristics, and holdings information in this presentation are of the largest accounts managed by Matthews International Capital Management LLC. The Performance results are net of advisory and other fees.

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 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.



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

KEY FACTS

As of 31 March 2011

Total assets under management$18.1 billion

Regional strategies$13.8 billion

Single-country strategies$ 4.3 billion

Investment team members25



Matthews History

2

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

1991G. Paul Matthewsfounds MatthewsInternational CapitalManagement 1994

Matthews Asiaintroduces Asia ex-Japan and Asian Growth & Income

1998China inception

1998Japan inception

2003Asia Growth

inception

2005India inception

2008Asia Small Companies

inception

2006Asia Dividend inception

1999Asia Science and Technology inception

1995Korea inception

1992Firm launches an investment vehiclefor the Asiaex-Japan region

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

2009China Dividend

inception

2010Matthews Asia

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

investors



Strategies for Investing in Asia

Matthews Asia offers a range of strategies across the risk-reward spectrum

3

Regional strategy designed for use as a core portfolio holding

Asian Growth and Income

Asia Dividend*

China Dividend

ASIA GROWTH AND INCOME

Asia Growth

Pacific Tiger*

ASIA GROWTH

Asia Science and Technology

ASIA SPECIALTY

Asia Small Companies

ASIA SMALL COMPANY

China*

India

Japan

Korea

Asian strategy designed to complement core portfolio holding

* Strategy currently available as a Luxembourg-domiciled SICAVClosed to most new investors



Investment Philosophy and Approach

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 recognised by the market.

Long-term focus on Asia

We believe a long-term approach is the most effective way to capitalise 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 1,800 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.

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

4



5

The Value of the Pit Stop:

Commonalities between Grand Prix racing and dividend investing



Dividends—Like a Well-executed Pit Stop—are Critical to Investment Performance

Dividends demonstrate discipline in the management of a business and the allocation of capital

Dividends serve as a means of realising tangible value in an investment

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

6



7

Why Dividends Matter: A Case Study



Decides on No Pit Stop

Seems about to win World Championship, then tire blows up

8



Going Too Fast, Too Soon

Dividends put a brake on reckless spending and may signal future growth

9

QUINTILE 1 QUINTILE 2 QUINTILE 3 QUINTILE 4 QUINTILE 5

Payout 109.3 55.4 35.9 21.2 7.0

Trailing yield 5.3 3.4 2.6 2.1 1.3

Next 3-yr EPS Growth

14.9 7.7 8.5 (1.2) 7.8

Source : CLSA. Data represents 10 year average (1997-2006) payout , trailing yield and forward 3-year EPS Growth for companies in CLSA’s Asia ex Japan universe.



Reverses in Pit Lane While Own Crew Blocking the Way

Disqualified from race

10



Corporate Governance

Dividends and corporate governance at the country level

11

Country Dividend YieldCorporate Governance Rank

Singapore 2.7 1

Hong Kong 1.9 2

Japan 1.6 3

Taiwan 3.0 4

Thailand 2.4 4

Malaysia 2.4 6

China 1.1 7

India 1.0 7

South Korea 1.3 9

Indonesia 1.5 10

Philippines 1.4 11

Source: FactSet. Note: Dividend yield represents the average 5 year dividend yield for the period 1/1/2006-31/12/10 and includes companies with market capitalizations of US$5B and over. ACGA Corporate Governance Rank as of September 2010, CLSA.



The Impact of Dividends on Long-term Returns

12

For periods 31/12/87–31/12/10. The MSCI All Country Asia Pacific Index is a free float-adjusted, market capitalisation-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 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

DIVIDENDS REINVESTED

PRICE INDEX



Wheel is not Put on Properly in Pit Stop

Disqualified from race

13



Signal vs. Noise

Dividends as representation of sustainable core earnings growth

14

EARNINGS AND DIVIDENDS OF COMPANIES IN ASIA PACIFIC*

*MSCI AC Asia Pacific Index members as of 30/06/10. 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 ten year financial history.Sources: Matthews, FactSet and Bloomberg

$0

$50

$100

$150

$200

$250

$300

$350

$400

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

US$

B

TOTAL EARNINGS

TOTAL DIVIDENDS



Dividends and Volatility

Dividends may help to reduce volatility

15

Dividend Yield

Volatility

Quintile 1 0.3 7.2

Quintile 2 0.8 7.4

Quintile 3 1.4 5.3

Quintile 4 2.4 4.7

Quintile 5 5.2 4.2

Note: Dividend yield and volatility for companies in Asia ex Japan with market capitalizations of US$5B and over. Average five year dividend yield for the period1/1/2006-31/12/10. Average volatility of stocks in each quintile as expressed by quarterly price changes over a five year period (1/1/2006–31/12/10). Source: FactSet



What This Equates to for Investors

16

No pit stop—Overdoing it and trying to go too fast

Ignoring the crew—Improper alignment of minority shareholders and management

Poor technical skills—Lack of value and sustainability of the business



17

Asia’s Dividend Universe and Portfolio Management



China (MSCI China Index)

Asia (MSCI AC Asia Pacific Index)

U.S. (S&P 500 Index)

Dividends—How Asia Compares to the U.S.

18

$59

$195

Size of Dividend Pool

$212

18%

16%

6%

Dividend Growth

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

*As of 2009.**Dividend growth for MSCI China is derived using index members as of 31/12/05 for improved index representation; for reference S&P 500 andMSCI Asia Pacific Index members grew dividends at 1% CAGR and 10% CAGR, respectively, during the same period.All performance quoted represents past performance and is no guarantee of future results. It is not possible to invest directly in an index.

(Bil US$)* 2002-2009**

3.0%

2.7%

1.9%

Dividend Yield

(as of 2/2011)



Asia’s Dividend-Paying Universe has Grown

19

1998 US$B 2009 US$B

Japan 18.9 Japan 58.7

Australia 8.7 China 43.2

Hong Kong 7.4 Australia 38.1

Taiwan 1.9 Hong Kong 33.1

Singapore 1.7 Taiwan 20.9

Other 5.3 Other 56.6

Total 43.9 Total 250.6

Data represents Asia Pacific dividend-paying stock universe with market cap over US$100 million as of end of 1998 and 2009 respectively.

Sources: FactSet, MICM

Note: Excluding China A-share market.

Two-thirds of dividends paid within China/Hong Kong in 2009 from companies listed after 1998



Crossing the Finish Line Implementing a dividend focused total return strategy

20

-10%

0%

10%

20%

30%

40%

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

3-Y

EA

R D

IVID

EN

D G

RO

WT

H

DIVIDEND YIELD

60%

100% PAYOUT RATIO

Red 80+%

Amber 50-80%

Blue 30-50%

Green 0-30%

Dividend yield and dividend growth data depicted are for all securities held in the largest account managed by Matthews using anAsia Dividend Strategy. Each point represents a plotting of the portfolio company’s trailing dividend yield as of 02/03/11 and its 3-year annual dividend growth rate based on MICM estimates. Color depiction represents a portfolio company’s dividend payout ratiobased on company dividend policy, if available. Otherwise 5-year average payout ratio is utilised (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

DIVIDEND YIELD VS. DIVIDEND GROWTH



21

Matthews Asia Dividend Strategy



Profile | Asia Dividend Strategy

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

22

STRATEGY FACTS

Inception Date31/10/06

Cap RangeAll Cap

Number of Holdings50 to 80

Turnover Range20% to 50%

BenchmarkMSCI All Country Asia Pacific Index

JESPER MADSEN, CFA YU ZHANG, CFA

There is no guarantee that portfolio companies held in the strategy will pay or continue to pay dividends.



Strategy | Asia Dividend Strategy

Current Strategy

— Focus on Asian companies that deliver sustainable dividend growth

through:

• Exposure to rising domestic household income

• Strong competitive position

• Improving dividend policies

Looking Forward

— Asian companies continue to look attractive relative to other regions

based on current dividend yield and growth outlook

— Interdependence of monetary policies in Asia with that of the U.S.,

combined with asymmetric global economic growth, increases the

risk of capital controls in Asia Pacific

— Inflationary pressures arising from asset prices and soft commodities

increase the risk of policy response (i.e. tighter monetary policies

and/or direct price controls)

— Focus on companies that we believe can deliver either:

• Stable, defensive dividend growth to provide a solid pillar for

dividend income (e.g., higher-yielding telecom, utilities and

consumer-related firms)

• Strong growth in dividends as earnings rise, business

investments mature and/or payout ratios expand

23

ASIA GROWTH AND INCOME STRATEGIES



Investment Returns| Asia Dividend Strategy

Annual returns for the years ended 31 December

18.05%

-25.97%

47.59%

22.83%

14.64%

-41.62%

37.86%

17.25%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

2007 2008 2009 2010

Asia Dividend Strategy MSCI AC Asia Pacific Index

24

Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.

Sources: BNY Mellon Investment Servicing, Bloomberg, MICM



-0.39%

11.75%11.33%

12.82%

-0.65%

11.36%

1.73%

3.10%

3 Months 1 Year 3 Year Since Inception

Asia Dividend Strategy

MSCI AC Asia Pacific Index

Investment Returns | Asia Dividend StrategyAs of 31 March 2011

25

AVERAGE ANNUAL TOTAL RETURNS





Dampening Downside Volatility—A Welcome Side-benefit

26

DrawdownNovember 2006 - March 2011

-60%

-50%

-40%

-30%

-20%

-10%

0%

Oct 2006 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Mar 2011

Matthews Asia Dividend

MSCI AC ASIA PACIFIC

Sources: Zephyr Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.



Strategy Performance

27

Manager Performance

November 2006 - March 2011 (Single Computation)

4000

6000

8000

10000

12000

14000

16000

18000

Oct 2006 Jun 2007 Dec 2007 Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Mar 2011

Matthews Asia Dividend

MSCI AC ASIA PACIFIC

Custom TableNovember 2006 - March 2011: Summary Statistics

Matthews Asia Div idend

Return

12.81%

MSCI AC ASIA PACIFIC 3.10%

Standard

Dev iation

18.04%

21.81%

Excess Return

v s.

Market

9.71%

0.00%

Tracking

Error

v s.

Market

7.69%

0.00%

Inf ormation

Ratio

v s.

Market

1.26

0.00

R-Squared

v s.

Market

88.91%

100.00%

Sources: Zephyr Performance results are of the largest account managed by Matthews for this strategy and are net of advisory and other fees. Performance quoted represents past performance and is no guarantee of future results. Individual account performance will vary.



Portfolio Characteristics | Asia Dividend StrategyAs of 31 March 2011

28

Country Breakdown (%)

China/Hong Kong 24.4%

Japan 20.6%

Taiwan 10.6%

Australia 10.3%

South Korea 8.4%

Thailand 8.2%

Singapore 5.0%

Indonesia 4.3%

United Kingdom 3.1%

Philippines 1.6%

Malaysia 0.4%

India 0.0%

New Zealand 0.0%

Cash and Other 3.1%

Sector Breakdown (%)

Financials 17.7%

Consumer Discretionary 17.0%

Consumer Staples 15.5%

Telecom Services 11.4%

Information Technology 9.4%

Utilities 7.0%

Industrials 6.6%

Health Care 6.2%

Energy 4.1%

Materials 2.0%

Cash and Other 3.1%

Source: FactSet Research Systems

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

-9.9%

5.4%

10.0%

7.0%

-3.7%

3.7%

-7.1%

3.1%

-1.7%

-9.9%

3.1%

MATTHEWS ASIA DIVIDEND STRATEGY VS. MSCI AC ASIA PACIFIC INDEX

7.8%

-16.8%

3.5%

-6.0%

-1.0%

7.1%

1.9%

2.7%

3.1%

1.2%

-1.5%

-4.9%

-0.2%

3.1%



Portfolio Characteristics | Asia Dividend StrategyAs of 31 March 2011

29

Market Cap Exposure Strategy Relative to Index (%)

Large Cap ($5B+) 43.5%

Mid Cap ($1B–$5B) 28.2%

Small Cap (<$1B) 25.2%

Cash and Other 3.1%

Portfolio Characteristics Strategy

Assets $2.2 billion

Weighted Average Market Cap $19.2 billion

P/E using FY1 Estimates 11.8x

P/E using FY2 Estimates 10.5x

3.1%

25.1%

13.8%

-42.0%

MATTHEWS ASIA DIVIDEND STRATEGY VS. MSCI AC ASIA PACIFIC INDEX

Source: FactSet Research Systems, MICM



To learn more about Matthews or how our strategies 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 +852-3798-2686

[email protected] [email protected]

Contacting Matthews Asia

30



Appendix I | Investment Team Bios

31

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. 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 EverbrightPramerica in China, establishing its quantitative investment process. He started his career as a Research Analyst with WI Carr Securitiesin 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 and Pacific Tiger strategies and co-manages the China Dividend strategy. 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. inLiterature from Guangdong University of Foreign Studies and an M.B.A. in International Business from the Dominican University ofCalifornia. 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 Asian Growth and Income, 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 Pacific 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 fromthe 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.



Appendix II | Client Services Team Bios

32

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 Headof Mutual Funds, Asia ex Japan.



-0.90%

18.19%

9.18%

12.55%

16.86%

9.68%

1.22%

19.80%

5.32%

11.44%

13.99%

4.56%

3 Months 1 Year 3 Years 5 Years 10 YearsSince Inception

(12/9/94)

Pacific Tiger Strategy

MSCI AC Asia ex Japan Index

Appendix III | Pacific Tiger Strategy Investment ReturnsAs of 31 March 2011

33

1 Index return calculated from 31/8/94.




1



- 1.09%

11.33%10.36%

19.48%

17.66%

13.33%

2.89%

9.58%

4.17%

16.65% 16.12%

4.34%

3 Months 1 Year 3 Years 5 Years 10 YearsSince inception

(19/2/98)

China Strategy

MSCI China Index

1

As of 31 March 2011

34

1 Index is calculated from 28/02/98.




Appendix IV | China Strategy Investment Returns



Disclosure

35

Investing in international markets may involve additional 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

strategies may be subject to a higher degree of market risk than diversified strategies 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.

The information contained in this presentation is for informational purposes only and does not, in any way, constitute

investment advice or an offer to sell or a solicitation of an offer to buy any security or product mentioned herein. No

representation is given that shares, products or services mentioned herein are suitable for any particular investor.

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.

The MSCI All Country Asia Pacific Index is a free float-adjusted market capitalisation–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 capitalisation–weighted index of the stock of 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 capitalisation–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.

Gl.pt006 montreux0511.final

Documents

largest account

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asia dividend

asia dividend

investment

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minority shareholders

llc gl