Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Seafarer Overseas Growth and Income Fund

Portfolio Review – First Quarter 2020

Busan, South Korea

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.

Portfolio Review
Seafarer Overseas Value Fund

Portfolio Review – First Quarter 2020

Dubai, UAE

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.

Portfolio Review

Message to Shareholders Regarding COVID-19

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.

Message to Shareholders

News and Commentary

Prevailing Winds

The China Investment Dilemma – Part II

The Rocky State of the U.S.-China Relationship

In the second installment of The China Investment Dilemma: Risks for U.S. Investors During a Turbulent Time, Nicholas Borst reviews major trends behind the deteriorating trajectory of U.S.-China bilateral relations.

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Prevailing Winds

Has COVID-19 Led to Financial Instability in China?

While China’s financial system weathered the initial stages of the COVID-19 crisis well, heightened risks warrant vigilance.

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Money Life – Interview with Andrew Foster

In an interview with Money Life’s Chuck Jaffe, Andrew Foster discusses three factors shaping the outlook for emerging market countries amid the COVID-19 pandemic.

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A Tale of Two Indices

Warsaw, Poland

Steph Gan examines questions that are fundamental to the emerging market asset class: how are emerging market indices designed, and what are their objectives? In what manners do the benchmarks excel, and what are their limitations?

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Field Notes

Penang

Manufacturers Limited by Customer Concentration

The small Malaysian state of Penang has a skilled workforce, reliable infrastructure, and a long history in the global technology supply chain. One thing that many Penang-based contract manufacturers don’t have is customer diversification.

Penang