Pursuing Lasting Progress in Emerging Markets

Seafarer Overseas Growth and Income Fund Portfolio Review – Fourth Quarter 2018

Guangzhou, China

January 2019 – With the Growth and Income Fund’s restructuring complete, Andrew Foster, Paul Espinosa, and Inbok Song discuss the Core, Value, and Growth components of the Fund, respectively. Andrew explains that 2018 bore witness to the decline that followed a “false dawn” in emerging markets, with China at the epicenter of the downturn. He sees signs of an improved outlook in emerging markets in 2019. Still, China’s fortunes remain crucial to the future of the asset class.

Portfolio Review

Seafarer Overseas Value Fund Portfolio Review – Fourth Quarter 2018

Doha, Qatar

January 2019 – Paul Espinosa explains that as asset prices declined in emerging markets during the quarter, the Value Fund holdings’ low valuations and ordinary income did not provide as much capital stability as he expected. He examines several Fund holdings, including Crédito Real and China Foods, that impacted performance. Paul emphasizes continued focus on the operational and financial progress of the Fund’s holdings despite short-term macro pressures on equity valuations.

Portfolio Review

Letter to Shareholders – Semi-annual Report

Lanzhou, China

November 2018 – Andrew Foster explains that despite unsatisfactory performance, he believes the emerging markets still warrant long-term investment, chiefly because of their potential to decouple from the investment cycle of the developed world. Andrew asserts that current U.S. trade policy will push China toward greater economic independence, and the pace of transformation will likely surprise observers. When the transition is complete, the emerging markets will follow a new and differentiated investment cycle, with China at their center.

Letter to Shareholders

Prevailing Winds

Testimony – What Keeps Xi Up at Night

In testimony to the U.S.-China Economic and Security Review Commission, Nicholas Borst describes the array of challenges facing the Chinese economy and the structural reforms that would help China achieve sustainable economic growth.

Looking Back on China’s 2018

China experienced a tumultuous 2018 full of headwinds that drove down equity markets and economic sentiment, but trade growth and private sector resilience remain positive long-term trends.

The Prevailing Winds blog by Nicholas Borst tracks economic and financial developments shaping China. Learn more.

News and Commentary

White Paper The Evolution of China’s Bond Market

The rapid development of China’s domestic bond market, now the third largest in the world, represents a significant step in the opening up of the country’s capital markets.

Field Notes São Paulo and Rio de Janeiro – Corporate Governance Improves in Brazil

Corporate governance improvements in Brazil include a continued reduction in the number of share classes outstanding.