Seafarer®

Pursuing Lasting Progress in Emerging Markets

Seafarer Overseas Value Fund

Overview

Factsheet Prospectus Annual Report On Value
in the Emerging Markets White Paper

Investment Objective

The Fund seeks to provide long-term capital appreciation.

Strategy

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

The Fund’s portfolio is comprised of securities identified through a bottom-up security selection process based on fundamental research. The Fund seeks to produce a minimum long-term rate of return by investing in securities priced at a discount to their intrinsic value.

Share Classes

Investor Institutional
Ticker SFVLX SIVLX
CUSIP
NAV
30-Day SEC Yield – Subsidized
30-Day SEC Yield – Unsubsidized
Fund Distribution Yield
Net Expense Ratio1
Load
12b-1 Fee
Minimum Initial Investment – Regular Account
Minimum Initial Investment – Automatic Investment Plan2
Minimum Initial Investment – Retirement Account
Minimum Subsequent Investment

Underlying Portfolio Holdings

Holdings
% of Net Assets in Top 10 Holdings
Weighted Average Market Cap
Market Cap of Portfolio Median Dollar
Gross Portfolio Yield3
Price / Book Value3
Price / Earnings34
Earnings Per Share Growth34
  • Gross expense ratio: for Investor Class; for Institutional Class1 All performance is in U.S. dollars with gross (pre-tax) dividends and/or distributions reinvested. The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost.

Geographic Focus

Developing countries including, but not limited to:

Africa
Botswana
Ghana
Kenya
Mauritius
Morocco
Nigeria
Tunisia
South Africa
Zimbabwe
East and South Asia
Bangladesh
China
India
Indonesia
Malaysia
Pakistan
Philippines
South Korea
Sri Lanka
Taiwan
Thailand
Vietnam
Emerging Europe
Bosnia and Herzegovina
Bulgaria
Croatia
Czech Republic
Estonia
Greece
Hungary
Lithuania
Kazakhstan
Poland
Romania
Russia
Serbia
Slovenia
Turkey
Ukraine
Latin America
Argentina
Brazil
Chile
Colombia
Jamaica
Mexico
Peru
Trinidad and Tobago
Middle East
Bahrain
Egypt
Jordan
Kuwait
Lebanon
Oman
Palestine
Qatar
United Arab Emirates

Select developed countries with significant economic and financial linkages to developing countries, including Hong Kong and Singapore.

  • Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer
  • Portfolio holdings are subject to change.
  1. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursements (excluding brokerage expenses, interest expenses, taxes and extraordinary expenses) to and of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement is in effect through .
  2. Shareholders who sign up for an Automatic Investment Plan can request a waiver of the Institutional Class investment minimum. View the waiver program criteria.
  3. Calculated as a harmonic average of the underlying portfolio holdings.
  4. Based on consensus earnings estimates for next year. Excludes securities for which consensus earnings estimates are not available.
  5. The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. It is not possible to invest directly in this or any index.
  6. For a period less than one full year; not annualized.

Performance

Factsheet Historical Fund Data

Total Returns

As of (Prior Month)

2 NAV / Index Level () Annualized Cumulative Inception Date Net Expense Ratio1 Gross Expense Ratio1
YTD 1 Mo 3 Mo 1 Yr 3 Yr 5 Yr Since Inception Since Inception

Gross expense ratio: for Investor Class; for Institutional Class1

As of (Prior Quarter)

2 NAV / Index Level () Annualized Cumulative Inception Date Net Expense Ratio1 Gross Expense Ratio1
YTD 1 Mo 3 Mo 1 Yr 3 Yr 5 Yr Since Inception Since Inception

Gross expense ratio: for Investor Class; for Institutional Class1

Growth of a $10,000 Investment Since Inception

The rates of return are hypothetical and do not represent the returns of any particular investment.

  • All performance is in U.S. dollars with gross (pre-tax) dividends and/or distributions reinvested. The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost.
  • Source: ALPS Fund Services, Inc.

Return Characteristics

The Fund was first offered on May 31, 2016. The Fund’s return characteristics are not yet available.

  1. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver/Expense Reimbursements (excluding brokerage expenses, interest expenses, taxes and extraordinary expenses) to and of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement is in effect through .
  2. The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF. It is not possible to invest directly in this or any index.

Composition

Factsheet Historical Fund Data

Holdings Portfolio Composition

Top 10 Holdings as of

Holding Sector Country Issuer Mkt Cap ($B) Yield1 Price/ Book Price/ Earnings23 EPS Growth23

Portfolio holdings are subject to change.
Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer

View all Holdings

Portfolio Composition by Region as of

All Holdings ADRs, Common & Preferred Equities Only
% Net Assets Price / Earnings67 EPS Growth67
Region # of Holdings Fund +/− vs. Index4 Avg Mkt Cap ($B)5 Gross Yield6 Price / Book6 Prior Year This Year Next Year This Year Next Year

Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer

Portfolio Composition by Sector as of

All Holdings ADRs, Common & Preferred Equities Only
% Net Assets Price / Earnings67 EPS Growth67
Sector # of Holdings Fund +/− vs. Index4 Avg Mkt Cap ($B)5 Gross Yield6 Price / Book6 Prior Year8 This Year9 Next Year9 This Year89 Next Year9

Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer

30-Day SEC Yield: subsidized SFVLX ; SIVLX / unsubsidized SFVLX ; SIVLX ()
The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.

Portfolio Composition by Asset Class as of

Asset Class % Net Assets

Source: ALPS Fund Services, Inc.

Portfolio Composition by Market Capitalization as of

Market Capitalization % Net Assets +/− vs. Index4

Sources: ALPS Fund Services, Inc., Seafarer

Due to rounding, percentage values may not sum to 100%. Values less than 0.5% may be rounded to 0%.

  1. Yield = dividend yield for common and preferred stocks and yield to maturity for bonds.
  2. Based on consensus earnings estimates for next year.
  3. Consensus estimates for earnings and EPS growth are not available for this security.
  4. The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF.
  5. Weighted Average Market Capitalization of Issuer.
  6. Calculated as a harmonic average of the underlying portfolio holdings.
  7. Based on consensus earnings estimates. Excludes securities for which consensus earnings estimates are not available.
  8. The Information Technology sector’s pronounced Price to Earnings ratio for the prior year and EPS Growth forecast for this year are influenced by a single constituent company. This company reported very low earnings over the previous twelve months, pushing the Price to Earnings ratio to an extreme level. Profit at this company is forecast to recover this year, and this sharp swing in profit causes consolidated earnings for the sector to rise substantially.
  9. The Telecommunications Services sector is comprised of a single constituent company, and consensus estimates for earnings and EPS growth are not available for this security.

Distributions

Year-end 2017 Distribution Estimates

Please note that these estimates are subject to change.1 Due to the Fund's small size, the actual distributions may vary from the estimates to a greater degree than is typical for most mutual funds.

Record
Date
Ex, Pay and
Reinvest Date
Ordinary
Income
Short Term
Capital Gains
Long Term
Capital Gains
Total Distrib.
Per Share
SFVLX (Investor Class) 12/13/17 12/14/17 $0.422 $0.000 $0.000 $0.422
SIVLX (Institutional Class) 12/13/17 12/14/17 $0.412 $0.000 $0.000 $0.412

Actual distribution amounts will be available on this page on or after the ex-date.

All shareholders of record on December 13, 2017 will receive the year-end distribution. On December 14, 2017 the share price of the Fund will be reduced by the amount of the distribution (net of any market performance), and the distribution will either be paid or reinvested as of market close (per the shareholder's previously established account settings).

Should you have any questions, please contact Shareholder Services at (855) 732-9220 (Mon–Fri 9am–8pm ET).

The estimates shown above should not be used in the computation of federal or state income taxes.

  1. Estimates are based on Fund shares outstanding as of November 14, 2017.

2017 Distribution Dates

Distribution frequency: Annual

Please note: future dates are subject to change.


Record Date
Ex, Pay and
Reinvest Date
Year-end Distribution 12/13/17 12/14/17

To be notified of distribution estimates, sign up for Seafarer email updates.

Historical Distributions

Ex, Pay and
Reinvest Date
Reinvest
NAV
Ordinary
Income
Short Term
Capital Gains
Long Term
Capital Gains
Total Distrib.
Per Share
Cumulative Distrib.
Per Share Since Inception
SFVLX (Investor Class)
SIVLX (Institutional Class)

For more information on the Fund’s distribution policies, please see the “Dividends and Distributions” section of the Prospectus.

Past performance is no guarantee of future results. There is no guarantee that the Fund will pay or continue to pay distributions.

Portfolio Review

Seafarer Overseas Value Fund Portfolio ReviewThird Quarter 2017

Portfolio Review Portfolio Review Archives

During the third quarter of 2017, the Seafarer Overseas Value Fund returned 3.89%.1 The Fund’s benchmark, the MSCI Emerging Markets Total Return Index, rose 8.04%. By way of broader comparison, the S&P 500 Index gained 4.48%.

The Fund began the quarter with a net asset value of $11.82 per share. The Fund paid no distributions during the quarter, and it finished the period with a value of $12.28 per share.2

Performance

The Value Fund delivered a total return of 3.89% during the third quarter of 2017. While I consider this return to be attractive in an absolute sense for a quarter, it nevertheless lagged the benchmark’s return of 8.04%.

As has been the case in previous quarters, the drivers of returns for the Value strategy and the benchmark are very different. The top contributors to the performance of the Value strategy during the quarter include a Brazilian insurance broker (Structural Shift category of value), a Chinese coke bottler (Asset Productivity), a Russian port company (Asset Productivity), a Korean battery manufacturer (Breakup Value), and an Asian holding company (Breakup Value). On the other hand, Chinese internet names continue to drive the benchmark’s performance.

At a portfolio level, it is important to note that last quarter’s theme of partial value realization through a change in the shareholder base of Greatview Aseptic and Tabreed (please refer to the second quarter 2017 portfolio review) continued in the third quarter with a change in control at another portfolio holding: Pegas Nonwovens. Pegas Nonwovens is a Czech manufacturer of nonwoven, absorbent textiles. The investment vehicle of a Czech industrialist acquired an 88% stake in the company through a tender offer. The Value Fund did not participate in the tender, as I am more interested in the long-term value the new controller plans to create at Pegas Nonwovens than in the short-term gain implied by the tender offer. I am planning a trip to Eastern Europe in December, when I expect to meet with management and discuss its future plans.

Allocation

I did not add any new holdings to the portfolio during the quarter. Allocation during this period consisted of deploying steady fund inflows, taking advantage of individual share price weakness whenever possible.

Outlook

Among the various subjects I discussed in the Value Fund’s second quarter 2017 portfolio review was China’s efforts to rein in credit growth by suppressing foreign mergers and acquisitions (M&A). In August, Beijing announced new rules governing foreign M&A. Specifically, it defined three categories of foreign investment:

  1. Banned: gambling and anything else contrary to national security;
  2. Restricted: property, hotel, film, entertainment, and sports; and
  3. Encouraged: One Belt One Road-related, research and development, technical standards, oil and mining, as well as agriculture and fishing.

I already discussed last quarter my views on how China’s various measures to tame credit growth relate to an underlying interest in preserving the value of the Chinese renminbi; which itself relates to the inclusion of the renminbi by the International Monetary Fund in its Special Drawing Rights (SDR), and the partial inclusion by MSCI (index provider) of Chinese A-shares in its benchmark indices. The more profound question raised by this latest official pronouncement about foreign M&A concerns the true extent of state control of the economy. China has long operated as a mixed economy with private companies co-existing alongside state enterprises. This latest policy development moves the pendulum toward state control of the whole economy, as it impacts both private and public enterprises.

A similar question applies to Brazil, whose government announced during the month of August that it would divest a total of 57 companies, including the bellwether Electrobras (a utilities company). The Brazilian government aims to raise 40 billion reais (approximately 12.5 billion U.S. dollars) by December 2018. In a parallel to the question surrounding the extent of the Chinese government’s control of private companies, it remains to be seen how independent these newly-privatized Brazilian companies will be even if the government is no longer a shareholder or a minority one. More than the divestment announcement itself, it is this future test on company independence that will mark whether Brazil is truly embarking on long-term economic progress.

Note that Brazil’s privatization announcement comes after numerous corruption scandals in the country (another parallel with China). One could view this privatization drive as not just aimed at addressing the fiscal deficit (the intended purpose), but as a critical step in reducing corruption in the long-term by transferring assets to the private sector. At the present time of intense industry focus on ESG-related issues, the message on governance should not be lost on investors, even if the intended purpose was to temporarily relieve Brazil’s budget crisis.

A global theme that reared its head within the Value portfolio this quarter is the impact on stock prices of index-inclusion news and related passive flows. Portfolio holding WH Group, a Chinese hog company, appreciated 5.73% from August 15 to September 30, on news that it would be included in Hong Kong’s Hang Seng Index. Another fund holding, Pacific Basin, a dry bulk shipping company, appreciated 4.14% from August 15 to the end of the quarter on news that it would be eligible for southbound flows (from the Chinese Mainland to Hong Kong) related to the Stock Connect program, and be included in the Hang Seng Stock Connect Hong Kong Index.

I have not compiled data on passive fund flows to and within emerging markets, but to the extent they follow the trend set by the switch from active to passive management in the United States, one could expect stock prices to undergo significant movement, spurred by their addition, deletion or re-weighting within passive indices.

I would like to end this commentary by going full circle, and making reference to the three companies within the Value Fund that have experienced significant changes in the shareholder base. Tabreed, Greatview Aseptic, and Pegas Nonwovens are relatively unknown emerging market companies that are expanding globally. They have capital expenditure (CAPEX) programs to pursue growth that is largely independent of the overall outlook for emerging markets. Another portfolio company, Samsung SDI, also has ambitious CAPEX plans. And finally, two other holdings, Shangri-La and Hang Lung Properties, displayed early signs of revenue acceleration in China based on their first half of 2017 results.

The reason I make these observations regarding several of the Value Fund’s holdings is that they may represent incipient signs at the portfolio level of what my colleague, Andrew Foster, has identified as an earnings recovery in emerging markets even as global trade remains soft (please refer to Seafarer’s Emerging Markets Briefing).

Thank you for entrusting us with your capital. We are honored to serve as your investment adviser in the developing world.

Paul Espinosa Seafarer Capital Partners, LLC
  • The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.
  • The MSCI Emerging Markets Total Return Index, Standard (Large+Mid Cap) Core, Gross (dividends reinvested), USD is a free float-adjusted market capitalization index designed to measure equity market performance of emerging markets. Index code: GDUEEGF.
  • The S&P 500 Total Return Index is a stock market index based on the market capitalizations of 500 large companies with common stock listed on the NYSE or NASDAQ.
  • The Hang Seng Index is a market capitalization-weighted index of 40 of the largest companies that trade on the Hong Kong Exchange. The Hang Seng Stock Connect Hong Kong Index is a benchmark for the performance of equities listed in Hong Kong that are eligible for trading via the southbound trading link of the Stock Connect.
  • It is not possible to invest directly in an index.
  • The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect the writer's current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Seafarer does not accept any liability for losses either direct or consequential caused by the use of this information.
  • As of September 30, 2017, Greatview Aseptic Packaging Co., Ltd. comprised 1.5% of the Seafarer Overseas Value Fund, Tabreed (National Central Cooling Co. PJSC) comprised 2.2% of the Fund, Pegas Nonwovens SA comprised 2.6% of the Fund, WH Group, Ltd. comprised 3.7% of the Fund, Pacific Basin Shipping, Ltd. comprised 1.7% of the Fund, Samsung SDI Co. Ltd. comprised 3.2% of the Fund, Shangri-La Asia, Ltd. comprised 3.1% of the Fund, and Hang Lung Properties, Ltd. comprised 2.1% of the Fund. The Fund had no economic interest in Eletrobras. View the Fund’s Top 10 Holdings. Holdings are subject to change.
  1. References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIVLX). The Investor share class (ticker: SFVLX) returned 3.80% during the quarter.
  2. The Fund’s Investor share class began the quarter with a net asset value of $11.84 per share; it finished the quarter with a value of $12.29 per share.