Portfolio Review –
– Andrew Foster reports that a rapid rise in consensus expectations for EM corporate profits lifted stocks higher in the quarter. He suggests that the market rewarded some Growth and Income Fund holdings for producing durable earnings growth amid the pandemic. Lastly, in light of the uncertain path to “normalization” in EM, high prices on stocks generally, and a pronounced bubble in large swathes (but not all) of China, Andrew advises investors to tread cautiously in the EM asset class.
Portfolio ReviewPortfolio Review –
– Paul Espinosa explains that Value Fund performance was led by companies that had sold off earlier in 2020 due to the pandemic, while EM benchmark performance was led by technology companies headquartered in China, Taiwan, and South Korea. Paul also introduces a new Fund holding, a Southeast Asia-focused conglomerate operating in the real estate, auto, and food retail industries.
Portfolio ReviewRebalancing 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 RelationshipPortfolio Briefing –
– Andrew Foster attributes the performance of the Growth and Income Fund to companies that offer resilient and durable earnings and cash flow growth despite the pandemic. He describes how the Fund’s positioning and cash levels changed over the course of a volatile year for emerging markets.
Portfolio BriefingPortfolio Briefing –
– Paul Espinosa discusses how Value Fund performance was led by a strong comeback of holdings that had sold off earlier in the year due to the pandemic. He describes the current risks associated with investment in the Fund and other asset classes, and notes that risk management requires diversification of the drivers of investment return.
Portfolio BriefingLetter to Shareholders – Semi-annual Report
– 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. Lastly, Kate explains that accelerated digitalization and evolving capital markets create investment opportunities in the developing world for the long-term investor.
Letter to ShareholdersPrevailing Winds
Learn MoreHow 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 DebtHave Foreign-listed Chinese Stocks Been a Bad Deal for Investors?
– Contrary to the assertions of many critics, foreign-listed Chinese firms – particularly those listed in the U.S. – have provided attractive returns for investors over the past decade.
MoreNews and Commentary
Emerging Markets Briefing
– Seafarer addresses key questions about emerging markets investing and how U.S. investors can integrate the asset class into long-term portfolios.
MoreChina’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.
MoreA Tale of Two Indices – Discussion with Steph Gan
– Steph Gan speaks with Andrew Foster about her commentary A Tale of Two Indices, which examines how countries and industries that represent the next leg of the developing world’s emergence are likely to be under-represented in leading emerging market indices.
MoreThe China Investment Dilemma
Risks for U.S. Investors During a Turbulent Time
– China’s rise as an investment destination has occurred amidst a significant deterioration in the U.S.-China relationship. Nicholas Borst examines how U.S. investors can navigate the dilemma of investing in China, a market that is too big to ignore but full of new and complicated risks.
MoreA Tale of Two Indices
– Steph Gan examines questions that are fundamental to the emerging market asset class: how are emerging market indices designed, and what are their objectives? In what manners do the benchmarks excel, and what are their limitations?
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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