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MATTHEWS INTERNATIONAL FUNDS
Matthews Pacific Tiger Fund
Matthews Asian Convertible Securities Fund
Matthews Korea Fund
Matthews Dragon Century China Fund
Class I Shares
Supplement dated October 1, 1998
to Prospectus dated December 31, 1997
Effective October 1, 1998, the name of Matthews Asian Convertible Securities
Fund is changed to Matthews Asian Growth and Income Fund.
All information relating to purchases, exchanges and redemption of shares, as
set forth in the Prospectus on the first page, the account application and in
the sections entitled "PROSPECTUS SUMMARY," "EXPENSE INFORMATION," "PURCHASE OF
SHARES," "EXCHANGE OF SHARES," "REDEMPTION OF SHARES AND REDEMPTION FEE" and
"SHAREHOLDER SERVICES" is hereby amended as follows:
Effective September 1, 1998:
* The minimum initial investment for regular accounts increases from
$1,000 to $2,500. Subsequent investments will continue to be accepted
in minimum amounts of $250.
* The minimum initial investment for IRA, 401(k) and 403(b)(7) plans
and other retirement plans increases from $250 to $500. Subsequent
investments to retirement accounts will continue to be accepted in
minimum amounts of $50.
* The redemption fee imposed on redemptions made within 90 days of
purchase increases from 1% to 2%.
The following paragraphs supplement the information contained in the section of
the Prospectus entitled "MANAGEMENT OF THE FUNDS - The Investment Advisor."
Effective June 3, 1998, Matthews International Capital Management, LLC
(the "Advisor"), the investment advisor to the Matthews International Funds (the
"Company"), has entered into a Purchase Agreement pursuant to which William
Hambrecht, the co-founder and former Chairman of the investment bank Hambrecht &
Quist, has acquired a 24.9% interest in the Advisor with a warrant to purchase
additional interests in the Advisor. If the warrant is exercised, Mr.
Hambrecht's ownership interest in the Advisor will increase to 30.4%.
The warrant, if exercised by Mr. Hambrecht, would cause a change in
control of the Advisor. Under the Investment Company Act of 1940, this would
cause an automatic termination of the advisory agreement between the Advisor and
the Company. In order to allow Mr. Hambrecht to exercise the warrant and at the
same time allow the Advisor to continue to advise the Funds, the Board of
Trustees of the Company and the shareholders of each Fund must approve a new
advisory agreement with the Advisor to take effect upon the exercise of the
warrant. Currently, there are no changes anticipated in the investment approach
of the Advisor as a result of Mr. Hambrecht's acquisition. A proxy statement
describing Mr. Hambrecht's acquisition in greater detail and seeking shareholder
approval of a new advisory agreement in the event Mr. Hambrecht exercises the
warrant is expected to be sent to each Fund's shareholders in the near future.
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE.
See reverse side for additional information.
The following paragraph supplements the information contained in the section of
the Prospectus entitled "ADMINISTRATION OF THE FUNDS - The Administrator, Fund
Accounting and Pricing Agent":
Effective February 23, 1998, substantially all of the assets of FPS
Services, Inc. were acquired by First Data Investor Services Group, Inc.
("Investor Services Group") pursuant to an Asset Purchase Agreement. Investor
Services Group, a wholly-owned subsidiary of First Data Corporation, has its
principal business address at 4400 Computer Drive, Westboro, MA 01581. All
references to FPS Services, Inc. or FPS in the Prospectus are hereby replaced
with "Investor Services Group."
INVESTORS SHOULD RETAIN THIS SUPPLEMENT
WITH THE PROSPECTUS FOR FUTURE REFERENCE.
See reverse side for additional information.
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