Seafarer Overseas Growth and Income Fund Portfolio Review – Second Quarter 2018
July 2018 – Andrew Foster discusses the two primary factors responsible for the decline in emerging markets during the quarter, as well as the holdings that weighed on the Growth and Income Fund’s performance. He explains that China’s rise as a global hegemon is structurally changing the risk-return profile of the emerging markets. Andrew describes how Seafarer’s approach to balancing the trade-off between growth and income in the Fund is evolving in response.
Seafarer Overseas Value Fund Portfolio Review – Second Quarter 2018
July 2018 – Paul Espinosa discusses how the rise in LIBOR and the anticipation of new tariffs impacted the performance of several Value Fund holdings. He also describes three portfolio holdings at which the operational turnaround strategies appear to be bearing fruit, despite the challenging conditions in emerging markets.
Letter to Shareholders – Annual Report
May 2018 – In the Annual Report letter, Andrew Foster states that despite his concerns over China’s increasingly centralized government control, the country’s growing economic scale and global prominence mean that it cannot be ignored in an investor’s portfolio. In his view, investors must consider a substantial, structural increase in their exposure to China – through dedicated allocation to a broad array of asset classes. Andrew also notes the Growth and Income Fund’s reduction in operating expenses, consistent with Seafarer’s long-term goals.
Field Notes
The investment team shares its insights from research trips, including recent visits to Bangkok, Beijing, and Hyderabad.
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News and Commentary
Prevailing Winds China’s Crackdown on Financial Risks
– Following financial shocks in China in 2015 and 2016, Chinese authorities have taken steps to reduce risks across the financial system and slow the growth rate of credit, particularly in the shadow banking system. View the post.
The Prevailing Winds blog by Nicholas Borst tracks economic and financial developments shaping China. Learn more.
Seafarer Funds Portfolio Briefings – Second Quarter 2018
– View the Portfolio Briefing videos for the Growth and Income Fund and the Value Fund.
One Belt, One Road – Many Motives
– China’s Belt and Road initiative is an ambitious vision for global trade, infrastructure development, and diplomacy. The financial scale of this undertaking dwarfs the U.S. Marshall Plan in current dollar terms, but prompts key questions: how will it be funded, and who will pay for it? View the white paper.