Portfolio 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 ReviewNavigating the Complexities of SOEs in Emerging Markets
– Nicholas Borst, Paul Espinosa, and Andrew Foster explain that when evaluating emerging market companies, state control matters, more so than state ownership. Andrew outlines “exception” cases in which it can make sense to invest alongside a state control party, but explains that he wants to see state control decline over time, as more commercially oriented actors take greater control.
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 InvestorsPortfolio Briefing –
– Paul Espinosa provides examples of two categories of Value component stocks that led performance of the Growth and Income Fund in the quarter. He also describes the decision-making process behind the Fund’s increased exposure to the Value component in recent quarters.
Portfolio BriefingPortfolio Briefing –
– Paul Espinosa attributes the Value Fund’s performance to holdings that were directly impacted by the pandemic but proved resilient, and rose when the market re-assessed their risks. Holdings that increased due to stock-specific reasons, such as Pacific Basin and Moneta Money Bank, also contributed to performance.
Portfolio BriefingPrevailing Winds
Learn MoreRebalancing 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?Tracking China’s Foreign Debt
– China leads the emerging markets in foreign debt, but a closer analysis reveals that China’s foreign borrowing is less risky than it appears, and is manageable relative to the size of the economy.
Tracking China’s Foreign DebtNews and Commentary
The 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.
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.
MoreMoney Life – Interview with Andrew Foster
– In an interview with Money Life’s Chuck Jaffe, Andrew Foster compares three countries that dominate EM – China, Taiwan, and South Korea – with other EM countries in terms of valuations and the path to pandemic-related “normalization.” He also discusses China’s evolving role within the EM asset class. Listen
MoreLetter to Shareholders
– Kate Jaquet discusses how Seafarer’s team has adapted to remote work this year. She describes two risks in China that she is closely monitoring: indebted property developers and the troubled banking sector.
Letter to ShareholdersChina’s Indebted Residential Property Development Sector
– As the Chinese economy faces headwinds on multiple fronts, its residential property sector – rife with opaque financing and cross-currency debt – presents risks to Chinese authorities.
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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