Portfolio Briefing –
– Andrew Foster reports that the consensus estimate for 2021 EM corporate earnings growth has accelerated sharply, and explains why the current 59% estimate is highly questionable. He provides an update on the Growth and Income Fund’s cash level and discusses China’s stock market valuations.
Portfolio BriefingPortfolio Briefing –
– Paul Espinosa highlights portfolio holdings based in Hong Kong, Brazil, and Vietnam to illustrate how the Value Fund’s performance was driven by company-specific factors, not simply a “value rotation.” He explains that the Value team is finding potential opportunities with companies that actively improved their operations during the pandemic.
Portfolio BriefingThe Future of China within the Emerging Market Asset Class
– As China’s economic might is ever more fraught with political and moral dilemmas, Andrew Foster weighs the merits of carving out China as an independent asset class.
MoreManaging Currency Risk in the Emerging Markets
– Andrew Foster and Kate Jaquet describe how Seafarer utilizes its proprietary macro currency model to manage currency risks within the construct of a diversified portfolio of foreign securities.
MoreParty Committees in Chinese Companies
– Renewed efforts to expand the Chinese Communist Party’s role in companies are antithetical to China’s desire to be treated as a modern market-based economy.
SOE Reform in China – Implications for Policymakers and InvestorsPortfolio Review –
– Andrew Foster explains that amid sharp volatility in EM stocks, the Growth and Income Fund’s performance was relatively stable and more diversified than that of the benchmark. He reports that the Fund’s decision to exit Taiwan Semiconductor was driven by the company’s outsized growth in capital expenditures. Additionally, Andrew urges caution for investors navigating an EM asset class that is bifurcated between nations mired in the pandemic, and those that have moved beyond it.
Portfolio ReviewPortfolio Review –
– Paul Espinosa describes two broad categories of stocks that explain the Value Fund’s quarterly performance: holdings that appreciated due to stock-specific developments, and holdings that rose as the market re-assessed the pandemic’s financial impact on the companies. Paul discusses examples in each category, including Moneta Money Bank in the Czech Republic.
Portfolio ReviewPrevailing Winds
Learn MoreSOE Reform in China – Implications for Policymakers and Investors
– A rules-based and transparent approach to managing state-owned enterprises is in China's economic interest and will provide clarity for foreign investors.
SOE Reform in China – Implications for Policymakers and InvestorsRebalancing the U.S.-China Economic Relationship
– In an Asia Society Conference panel titled Rebalancing the U.S.-China Economic Relationship: Trade, Investment, and Technology, Nicholas Borst explains how the increase in holdings of Chinese securities by U.S. investors has emerged as a major source of conflict in the U.S.-China economic relationship.
Rebalancing the U.S.-China Economic RelationshipHow Exposed Are U.S. Investors to China?
– U.S. investors have invested more in China than the official statistics indicate, but remain less important as a financing source for Chinese companies than policymakers and the media may imagine.
How Exposed Are U.S. Investors to China?News and Commentary
The Evolution of China’s Bond Market
– The rapid development of China’s domestic bond market, now the second largest in the world, represents a significant step in the opening up of the country’s capital markets.
MoreAdvisorpedia – Understanding the Trade-offs in Emerging Markets Indices
– In Advisorpedia, Seafarer’s Steph Gan writes that as leading emerging market indices pursue scalability and replicability, they favor large-capitalization companies and are overweight several scale-dependent sectors. : As of March 31, 2021, Samsung Electronics Co., Ltd. comprised 4.5% of the Seafarer Overseas Growth and Income Fund and Ping An Insurance Group Co. of China, Ltd. comprised 3.6% of the Fund. The Seafarer Funds did not own shares in the other entities referenced in this commentary. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change.
MoreLetter to Shareholders
– As China’s economic might is ever more fraught with political and moral dilemmas, Andrew Foster weighs the merits of carving out China as an independent asset class.
Letter to ShareholdersThe Wire China – The Party on the Inside: The CCP and Chinese Companies
– In The Wire China, Seafarer’s Nicholas Borst writes that China’s effort to entrench the Chinese Communist Party within companies is incompatible with its desire to be treated as a modern market-based economy.
MoreThe Interpreter – Has China Given Up On SOE Reform?
– In the Lowy Institute’s The Interpreter, Seafarer’s Nicholas Borst discusses why the lack of transparency around Chinese state-owned enterprises has contributed to growing levels of distrust, both within and outside of China, about the government’s intentions.
MoreFund Resources
Field Notes
Explore Our MapPenang
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.
PenangBeijing
Technology Reigns
– Beijing’s technology companies are focused on smart city initiatives, big data, and artificial intelligence.
MoreDelhi
Smoked Out
– Hazardous air pollution in Delhi exposes the politics of India’s environmental ambitions.
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