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 Cape Town and Manila.
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News and Commentary
Prevailing Winds How Open Are China’s Capital Markets to Foreign Investment?
– The current stock market correction in China is serving as a useful test case of the commitment of policymakers to maintaining recent financial reforms in the face of financial volatility. View the post.
The Prevailing Winds blog by Nicholas Borst tracks economic and financial developments shaping China. Learn more.
Seafarer Overseas Growth and Income Fund Message to Shareholders – Portfolio Manager Update
– Paul Espinosa and Inbok Song were promoted to Lead Portfolio Managers of the Growth and Income Fund. Andrew Foster remains a Lead Portfolio Manager of the Fund. View the Message to Shareholders and Q&A.
Field Notes
Cape Town
– Until South Africa’s structural problems such as corruption and unemployment are addressed, private sector investment, and especially foreign investment, will likely wait on the sidelines. View the Field Notes.
Manila
– An ambitious infrastructure spending program is underway in the Philippines. While sorely needed, its implementation may have unintended side effects. View the Field Notes.