Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Seafarer Overseas Value Fund

Portfolio 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 Briefing

Navigating 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.

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Seafarer Overseas Growth and Income Fund

Portfolio Review

Seoul, South Korea

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 Review
Seafarer Overseas Value Fund

Portfolio Review

Ho Chi Minh City, Vietnam

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 Review

Prevailing Winds

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Prevailing Winds

Rebalancing 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 Relationship
Prevailing Winds

How 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?
Prevailing Winds

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 Debt

News 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.

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Money 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

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Letter to Shareholders

Guiyang, China

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 Shareholders

China’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.

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Market Commentary

A 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.

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Field Notes

Explore Our Map
Field Notes

Penang

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.

Penang
Field Notes

Beijing

Technology Reigns

Beijing’s technology companies are focused on smart city initiatives, big data, and artificial intelligence.

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Field Notes

Delhi

Smoked Out

Hazardous air pollution in Delhi exposes the politics of India’s environmental ambitions.

Delhi