Portfolio Review – Fourth Quarter 2015

February 2016 – In his latest portfolio review, Andrew Foster discusses a shift in the Fund’s composition, away from the Asian region, and toward larger stocks at the expense of smaller ones. Next, he speculates as to the cause behind the collapse in China’s capital markets. While he does not offer a definitive explanation, he does suggest that circumstances may be serious enough to warrant attention from investors. He concludes by citing two reasons for optimism, despite China: first, stocks in the emerging markets are cheap enough to be attractive; and second, interest rates in the developing world are diverging from those in the U.S. in a manner that may be conducive to growth.

Portfolio Review

Letter to Shareholders – Semi-annual Report

November 2015 – In his latest address to shareholders, Andrew Foster discusses the challenging environment that impacted both the Fund and the benchmark index over the summer. He cites two factors that weighed on performance: currency losses (led by the Brazilian Real) and a sharp correction in Chinese stocks. Andrew then addresses an important, albeit contentious topic: whether the emerging market asset class is “dead,” as suggested by some analysts. He reviews the main criticisms that surround the category, and then offers his own view on the future of the asset class. Andrew concludes by discussing some of the latest developments at Seafarer Capital Partners, the firm that advises the Fund.

Letter to Shareholders

Field Notes – Moscow

Fourth Quarter 2015 – Despite a serious financial crisis, a number of Russian companies are planning and investing with a long-term horizon in mind. View the Field Notes.

White Paper – On Value in the Emerging Markets

November 2015 – Paul Espinosa examines the universe of value stocks that lie within the emerging markets. Rather than rely on basic quantitative measures to distinguish “cheap” stocks from “expensive” ones, Paul defines seven distinct sources of value that might represent viable opportunities for long-term, value-oriented investments. He applies these seven definitions to the securities universe within the emerging markets and discovers a subset worth $1.4 trillion. Paul then examines each of the seven categories in detail, studying the challenges and opportunities within each. He discusses where value “traps” might lie – and how best to avoid them. Paul concludes by noting the opportunity for value in the developing world is large, diverse, and seemingly untapped by the global investment industry.

On Value in the Emerging Markets

Seafarer Overseas Growth and Income Fund

Investment Objective

The Fund seeks to provide long-term capital appreciation along with some current income; it also seeks to mitigate adverse volatility in returns.

Strategy

The Fund invests primarily in the securities of companies located in developing countries. The Fund invests in several asset classes including dividend-paying common stocks, preferred stocks, convertible bonds, and fixed-income securities. More...

News and Commentary

Quarterly Briefing – First Quarter 2016

Daniel Duncan and Andrew Foster discuss the volatile nature of emerging markets in the first quarter, largely driven by economic and political challenges impacting China and Brazil. In this context, Andrew stresses the importance of finding companies that are survivors – those that can produce attractive rates of profitability and sustained growth even in difficult macroeconomic circumstances. Andrew concludes by describing the factors he considers when managing the weighting of portfolio holdings, especially during periods of market volatility. View the video.

Barron’s: How an Emerging Market Fund Stays on Even Keel

Barron’s profile of the Seafarer Overseas Growth and Income Fund describes the Fund’s strategy of investing in securities that offer sustainable growth and current income. View the profile.

Seafarer Fund

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SFGIX(Investor) $11.44 –$0.02
SIGIX(Institutional) $11.46 –$0.02