Pursuing Lasting Progress in Emerging Markets

Seafarer Overseas Growth and Income Fund Portfolio Review – Fourth Quarter 2018

Guangzhou, China

January 2019 – With the Growth and Income Fund’s restructuring complete, Andrew Foster, Paul Espinosa, and Inbok Song discuss the Core, Value, and Growth components of the Fund, respectively. Andrew explains that 2018 bore witness to the decline that followed a “false dawn” in emerging markets, with China at the epicenter of the downturn. He sees signs of an improved outlook in emerging markets in 2019. Still, China’s fortunes remain crucial to the future of the asset class.

Portfolio Review

Seafarer Overseas Value Fund Portfolio Review – Fourth Quarter 2018

Doha, Qatar

January 2019 – Paul Espinosa explains that as asset prices declined in emerging markets during the quarter, the Value Fund holdings’ low valuations and ordinary income did not provide as much capital stability as he expected. He examines several Fund holdings, including Crédito Real and China Foods, that impacted performance. Paul emphasizes continued focus on the operational and financial progress of the Fund’s holdings despite short-term macro pressures on equity valuations.

Portfolio Review

Letter to Shareholders – Semi-annual Report

Lanzhou, China

November 2018 – Andrew Foster explains that despite unsatisfactory performance, he believes the emerging markets still warrant long-term investment, chiefly because of their potential to decouple from the investment cycle of the developed world. Andrew asserts that current U.S. trade policy will push China toward greater economic independence, and the pace of transformation will likely surprise observers. When the transition is complete, the emerging markets will follow a new and differentiated investment cycle, with China at their center.

Letter to Shareholders

News and Commentary

Money Life – Interview with Andrew Foster

In an interview with Money Life’s Chuck Jaffe, Andrew Foster explains three reasons for an improved outlook in emerging markets in 2019: reasonable valuations and stable growth, increasing independence from developed markets, and signs of pragmatic leadership in China. Listen to the interview.

White Paper Discussion China’s Campaign to Develop Advanced Technologies

– Nicholas Borst speaks with Inbok Song about his white paper on China’s campaign to develop advanced technologies. Nicholas describes the government’s desire to move up the economic value chain and reduce dependency on foreign-controlled technology. He also addresses the impact of U.S.-China trade tensions on China’s technology campaign. View the video.

White Paper Discussion China’s Belt and Road Initiative

– Nicholas Borst and Steph Gan examine China’s Belt and Road initiative, the topic of a white paper written by Steph. They discuss China’s motivations behind its ambitious vision for global trade and infrastructure development, as well as the risks of the initiative. View the video.

Prevailing Winds

Looking Back on China’s 2018

China experienced a tumultuous 2018 full of headwinds that drove down equity markets and economic sentiment, but trade growth and private sector resilience remain positive long-term trends.

Tracking China’s External Debt

China leads the emerging markets in external debt, but a closer analysis reveals that China’s foreign borrowing is less risky than it appears, and is manageable relative to the size of the economy.

The Prevailing Winds blog by Nicholas Borst tracks economic and financial developments shaping China. Learn more.