Seafarer®

Pursuing Lasting Progress in Emerging Markets

Letter to Shareholders – Annual Report

May 2016 – In the Annual Report letter, Andrew Foster reviews the Fund’s performance over the past year. Andrew explains how in the first half of the fiscal year, a “mini-bubble” in Chinese stocks popped, and dragged the Fund lower. However, in the second half of the year, a politically driven rally in Brazil’s currency and shares offset some of the Fund’s losses. Yet Andrew notes with frustration that, despite the second half recovery, the Fund finished the year with material losses, though its performance since inception is positive. Andrew concludes by reflecting on the future of Seafarer Capital Partners, touching upon the firm’s plans for scale, strategies, team and culture.

Letter to Shareholders

Introducing the Seafarer Overseas Value Fund

Investor Class SFVLX
Institutional Class SIVLX
Inception Date May 31, 2016

Strategy

The Fund seeks to produce a minimum long-term rate of return by investing in developing country securities priced at a discount to their intrinsic value.

Portfolio Management

Paul Espinosa, Lead Manager
Andrew Foster, Co-Manager

Introduction to the Value Fund

Paul Espinosa defines seven sources of value in emerging markets that may represent viable opportunities for long-term investments.

Seafarer Overseas Growth and Income Fund Portfolio Review – First Quarter 2016

May 2016 – In his latest portfolio review, Andrew Foster discusses the volatile “V-shaped” performance of the market. While the Seafarer Overseas Growth and Income Fund and the benchmark index both produced gains for the quarter, they did so only after China’s markets first dragged both sharply lower, and after Brazil subsequently pushed both higher. Next, Andrew addresses the rationale behind the Fund’s allocation to Brazil, and how it is changing in light of current events. He concludes by discussing the twin forces that are most likely to shape emerging markets over the next 12 to 24 months: falling interest rates versus sluggish growth.

Portfolio Review

Field Notes – Moscow

Fourth Quarter 2015 – Despite a serious financial crisis, a number of Russian companies are planning and investing with a long-term horizon in mind. View the Field Notes.

Field Notes

News and Commentary

Seafarer Overseas Growth and Income Fund Quarterly Briefing – Second Quarter 2016

Daniel Duncan and Andrew Foster discuss developments in Brazil and China that shaped the performance of the emerging markets and the Fund during the second quarter.  Daniel probes the effect of the announcement of Britain’s exit from the European Union on the Fund; Andrew explains that Poland provides the majority of the Fund’s EU exposure, and that this event exacerbates an already challenging economic landscape in Poland. Andrew also notes the elevated financial risks in China, stating that his chief concern is growing illiquidity in the corporate sector, as evident by a dramatic increase in accounts receivable. View the video.

Morningstar: Emerging Markets: Not Quite at the Bottom Yet

Andrew Foster and Jason Stipp of Morningstar discuss valuations and prospects for growth in the emerging markets, along with the "decoupling" that is taking place in monetary and currency policies. View the video.