Fixing China’s Broken Balance Sheets
– China’s approach to repairing weak balance sheets and preventing financial instability reflects lessons learned from past crises and the current priorities of Xi Jinping.
Fixing China’s Broken Balance SheetsPortfolio Review –
– Kate Jaquet notes that China was the primary contributor to volatility in EM equities in the quarter. She explains that the Growth and Income Fund was not invested in Russia due to corporate governance risks, and she introduces a new Fund holding in Poland.
Portfolio ReviewPortfolio Review –
– Paul Espinosa discusses how the Value Fund’s positive performance was driven by holdings that are diversified across Seafarer’s seven sources of value. He reviews the Fund’s limited exposure to the Russia-Ukraine conflict.
Portfolio ReviewPortfolio Briefing –
– Kate Jaquet reports that the Growth and Income Fund’s performance was primarily driven by the Fund’s lack of direct exposure to Russia and underweight position in China. She explains that the Fund was not invested in Russia due to corporate governance and control party risks identified during the bottom-up security selection process.
Portfolio BriefingPortfolio Briefing –
– Paul Espinosa attributes the Value Fund’s performance to a geographically diverse set of holdings outside of China, and explains that stock selection allowed the Fund to avoid the brunt of the falling Chinese market. He discusses the Value Fund’s limited exposure to the Russia-Ukraine conflict.
Portfolio BriefingCan Value Investing Work in Emerging Markets?
– Paul Espinosa reviews the evolution of the emerging markets asset class over the past 40 years. He notes that growth remains the dominant strategy employed by investors, leaving fertile ground for value investors to extract returns.
MoreMessage to Shareholders Regarding the Conflict in Ukraine
– The conflict in Ukraine is of material consequence for both investors generally and shareholders of the Seafarer Funds, and as such Seafarer is monitoring events closely. Seafarer provides a summary of the exposures of the Seafarer Funds to first- and second-order impacts of the conflict.
MorePrevailing Winds
Learn MoreHow Strong is China’s Household Balance Sheet?
– China’s household balance sheet is stronger than commonly thought, but it is still vulnerable to shifts in the real estate market.
How Strong is China’s Household Balance Sheet?China’s National Balance Sheet – A Framework for Analysis
– The risks of China’s economy and debt levels should be evaluated in the context of its national balance sheet – taking into account the interconnected assets and liabilities between households, corporations, financial institutions, and the government.
China’s National Balance Sheet – A Framework for AnalysisRisks and Opportunities: The U.S.-China Financial Relationship
– In an Asia Society Conference panel, Nicholas Borst explains why the U.S. and China share responsibility for the current state of the deteriorating bilateral investment relationship.
Risks and Opportunities: The U.S.-China Financial RelationshipNews and Commentary
Money Life – Interview with Paul Espinosa
– In an interview with Money Life’s Chuck Jaffe, Paul Espinosa explains that the past ten years may have been a lost decade for emerging market investors, but not for EM corporates, which accumulated retained earnings and grew dividends. : As of December 31, 2021, Ambev SA comprised 2.7% of the Seafarer Overseas Growth and Income Fund and 3.4% of the Seafarer Overseas Value Fund. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change. Listen
MoreEmerging Markets Briefing
– Seafarer addresses key questions about emerging markets investing and how U.S. investors can integrate the asset class into long-term portfolios.
Emerging Markets BriefingCould Smaller Emerging Markets Hold Value Opportunities?
– Daniel Duncan explains why a selective value approach – not a top-down search for growth – may be well suited for finding equity returns in frontier markets.
MoreLetter to Shareholders
– Paul Espinosa writes that, despite the past decade of modest EM corporate earnings growth, Seafarer finds opportunities in the form of strengthened balance sheets (retained earnings) and improved corporate governance (higher dividends).
Letter to ShareholdersThe Diplomat – The Idiosyncrasies of China’s Bond Market
– In The Diplomat, Seafarer’s Kate Jaquet writes that China’s bond market appears hampered by unpredictable default mechanisms, non-standardized bond covenants, and unreliable bond ratings.
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