Matthews Emerging Markets Equity Active ETF

Matthews Emerging Markets Equity Active ETF (MEM) is an actively managed fund. Its managers pick stocks from emerging markets such as South Korea, Taiwan and China, and the fund is measured against the MSCI Emerging Markets Index. Its 0.79% expense ratio is the highest among nine similar funds, which average 0.25%. As of June 30, 2026, it leaned heavily toward Asian technology, and Taiwan Semiconductor alone made up about 15% of assets.

• Over the year to Oct 27, 2026, MEM returned +8.0%, 6th of 9 among similar funds.
• Its worst full calendar year was 2023 (+6.9%); its best was 2025 (+28.4%).
• The deepest fall in its price history was 18.9% (Oct 7, 2024 to Apr 8, 2025), recovered by Jun 24, 2025.

As of Jun 30, 2026, the fund held 71 securities; the ten largest made up 45.31% of assets, and 5.15% sat in cash and money-market holdings.

• Over the three months to Jun 30, 2026, investors withdrew a net $865K (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +16.07%, +9.98%, -2.18%.

MEM does not track an index. It is an actively managed ETF: portfolio managers at Matthews International Capital Management pick the stocks. Normally, at least 80% of net assets go into common and preferred stocks of companies in emerging markets. The prospectus defines these as nearly every country outside the US, Canada, Japan, Australia, New Zealand, Hong Kong, Singapore, Israel and most of Western Europe. Up to 20% may go into developed-market companies. The MSCI Emerging Markets Index serves only as a yardstick (benchmark).

Matthews looks for companies it believes can grow sustainably. It judges balance sheets, cash flow, management quality, corporate governance and product lines. It usually favors medium and large companies. Position sizes reflect the managers' judgment, not an index formula. The managers may also put more than 25% in one country, such as China, and have leeway in deciding where a company is "located."

As of June 30, 2026, the portfolio was concentrated: 71 holdings, with 45% in the top 10. Taiwan Semiconductor Manufacturing was 14.8% and Samsung Electronics 6.7%. South Korea (31%) and Taiwan (24%) were the largest country weights. The fund held no derivatives. Portfolio turnover was 118% in its most recent fiscal year, per the prospectus filed April 30, 2026. That is roughly like replacing every holding once, which can raise trading costs and taxable gains.

• MEM charges 0.79% a year, versus an average of 0.25% for the similar funds below (9th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $81 in the first year and $978 over 10 years (assuming a 5% annual return).

MEM is a concentrated, actively managed emerging markets fund with bigger-than-market swings and a high fee, so it fits better as a small add-on than as a foundation.

MEM adds companies from South Korea, Taiwan and other emerging markets that a US-focused portfolio lacks. It launched in July 2022, so it has no record through the 2008 crisis, the 2020 crash or the full 2022 bear market. Its deepest drop was 18.9%, from October 7, 2024 to April 8, 2025. It recovered by June 24, 2025, about 2.5 months later. Every full calendar year has been positive so far. The weakest was 2023, at 7.51%. Its one-year beta was 1.52 as of October 27, 2026, meaning it has swung about 1.5 times as much as the market. Someone forced to sell in a downturn could lock in steep losses. The trailing 12-month yield was 3.23%, but the fund pays only once a year. Costs add up: the SEC's standard example shows $978 in expenses over 10 years on $10,000. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.