Letter to Shareholders – Annual Report

May 2020 – Daniel Duncan offers a perspective on the volatile market environment and explains why he believes most developed market investors can benefit from the diversification offered by investing in the emerging markets. He cautions that while the initial COVID-19-related panic in global capital markets may be over, there could be significant negative economic and market events to come.

April 2020 – Andrew Foster and Paul Espinosa explain that stocks with stable cash flow, substantial accumulated cash, and attractive dividend yields were not defensive in March’s crash. The only evident haven within EM was among high growth (but often loss-making) technology and software stocks. Andrew concludes by noting that the stocks held by the Growth and Income Fund are attractively priced at present, and the underlying companies enjoy healthy balance sheets and resilient prospects.

April 2020 – Paul Espinosa discusses how Value Fund holdings were impacted by the concurrent demand and supply shocks caused by the COVID-19 pandemic. He explains that the Fund exited several positions in order to concentrate the portfolio in higher conviction and higher liquidity securities. Lastly, Paul expresses concern that the developed market policy response to COVID-19 impairs future productivity, and notes that Seafarer searches for EM companies that improve productivity at every downturn.

Field Notes

Penang, Malaysia

Beijing, China

The investment team shares its insights from research trips, including recent visits to Penang and Beijing.