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.

March 2020 – The impact of COVID-19 on global populations and health systems is expanding; the economic and financial consequences appear severe, cascading, interwoven, and unpredictable in the short run. Seafarer intends to manage such risks by staying apprised of events as they unfold, by appraising the threats that affect individual portfolio holdings, and by using our knowledge and experience to make decisions that we believe best serve long-term shareholders’ interests. Seafarer has robust business continuity policies and practices in place and thus we are confident that our personnel can conduct all necessary work securely and effectively, even if situated remotely for an extended period.

Field Notes

Penang, Malaysia

Beijing, China

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