Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Message to Shareholders Regarding COVID-19

The impact of COVID-19 on global populations and health systems is expanding; the economic and financial consequences appear severe, cascading, interwoven, and unpredictable in the short run. Seafarer intends to manage such risks by staying apprised of events as they unfold, by appraising the threats that affect individual portfolio holdings, and by using our knowledge and experience to make decisions that we believe best serve long-term shareholders’ interests. Seafarer has robust business continuity policies and practices in place and thus we are confident that our personnel can conduct all necessary work securely and effectively, even if situated remotely for an extended period.

Message to Shareholders
Seafarer Overseas Growth and Income Fund

Portfolio Review – Fourth Quarter 2019

Wuhan, China

Andrew Foster and Paul Espinosa attribute performance of the Growth and Income Fund and the benchmark index to a year-end surge in large-cap growth stocks, propelled by news of the U.S.-China “Phase 1” trade deal. Andrew provides an update on the transition in the Fund’s growth component holdings. He also discusses how the outbreak of the COVID-19 virus is testing the credibility of President Xi’s administration, and how the work stoppage in China might trigger a payments crisis.

Portfolio Review
Seafarer Overseas Value Fund

Portfolio Review – Fourth Quarter 2019

Incheon, South Korea

Paul Espinosa explains how Value Fund performance was derived from a balance between return of capital to shareholders and changing growth expectations, while the benchmark index’s return was driven by a narrow set of technology companies. Paul discusses a new Fund holding, a South Korea-based provider of marketing and communication services, and why he believes the company is gradually unlocking value embedded in its balance sheet.

Portfolio Review

Letter to Shareholders – Semi-annual Report

São Paulo, Brazil

Paul Espinosa describes how Seafarer’s active, bottom-up investment strategies address a challenge faced by the Funds’ shareholders and by Seafarer: ever-decreasing rates of return on capital. Paul explains that Seafarer continues to derive investment returns from individual companies that display specific Growth and Income or Value characteristics – not from characteristics that relate to geography or sector.

Letter to Shareholders

News and Commentary

Prevailing Winds

The China Investment Dilemma – Part I

China’s Financial Rise

The first installment of The China Investment Dilemma: Risks for U.S. Investors During a Turbulent Time explains how China’s emergence as a major investment destination is driven by the size, depth, and increasing openness of its capital markets.

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A Tale of Two Indices – Part I

How to Design an Index for the Emerging Markets
Warsaw, Poland

Emerging market index providers’ pursuit of scalability and replicability has taken precedence over fidelity to the fundamentals of the underlying markets.

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A Tale of Two Indices – Part II

A Practical Comparison of Indexing Methods
Nanjing, China

An empirical comparison between one major emerging markets index and the underlying equity universe shows clear differences in the representations of capitalization, countries, and industries.

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