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Pursuing Lasting Progress in Emerging Markets®

Prevailing Winds

Testimony – China’s Economy: Implications for Investors

In testimony to the U.S.-China Economic and Security Review Commission, Nicholas Borst discusses the causes of China’s economic slowdown and the risks of local government debt.

Testimony – China’s Current Economy
Seafarer Overseas Growth and Income Fund

Portfolio Review

Jakarta, Indonesia

Andrew Foster explains that as EM stocks traded sideways, the Growth and Income Fund produced gains from disparate underlying holdings such as XP, Inc., Richter Gedeon, and CD Projekt. While weak demand constrains the Chinese economy, he suggests that no investor should dismiss China altogether, as it has entrepreneurial strength and the sovereign authority to enact reform.

Portfolio Review
Seafarer Overseas Value Fund

Portfolio Review

Rio de Janeiro, Brazil

Brent Clayton discusses how idiosyncratic company-specific developments helped the Value Fund outpace its benchmark, and he describes the competitive positioning of a new Middle East holding. Brent explains how the Fund remains focused on corporate fundamentals as it navigates an uncertain macroeconomic environment.

Portfolio Review
Seafarer Overseas Growth and Income Fund

Portfolio Briefing – Second Quarter 2023

Andrew Foster reports that the Growth and Income Fund’s performance was driven by a diverse group of stocks, and he highlights four recent portfolio additions. Andrew describes China’s weak consumer and industrial demand, and the steps China’s leaders could take to offset the malaise. Paul Espinosa discusses a value holding in Brazil.

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Seafarer Overseas Value Fund

Portfolio Briefing – Second Quarter 2023

Brent Clayton introduces a new Value Fund holding, Fertiglobe, a Middle Eastern fertilizer manufacturer. He illustrates how the Fund manages volatility using the example of Fund holding XP, Inc. Paul Espinosa discusses the Fund’s exposure to China and how he evaluates the associated geopolitical risk.

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Letter to Shareholders – Annual Report

Tianjin, China

Lydia So explains that the current environment presents opportunities to invest in durable businesses that can consolidate and gain market share, as less competitive companies either fail or retreat from markets. She describes the characteristics she seeks in growth securities.

Letter to Shareholders
Field Notes

Mumbai: Cashless is King

A national digital payments platform in India is changing how individuals and merchants transact.

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Field Notes

Dubai: A New Beacon for Capital

Dubai is ascending as a global financial center as policies attract foreign capital and companies demonstrate improved corporate governance.

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Prevailing Winds

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Prevailing Winds

China’s Reopening and Corporate Expansion Overseas

After a recent trip to China, Nicholas Borst reports on China’s reopening, the operating environment for the country’s private sector, and Chinese companies’ efforts to expand internationally.

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Prevailing Winds

Of Profits and Peril: Corporate China’s Push Abroad

Chinese companies are making an unprecedented effort to expand internationally, yet they face growing restrictions in the U.S. and other global markets.

Of Profits and Peril: Corporate China’s Push Abroad
Prevailing Winds

China’s Balance Sheet Challenge

In an article for China Leadership Monitor, Nicholas Borst examines the scale of China’s debt problem and how policymakers can put the country’s balance sheet on firmer footing.

China’s Balance Sheet Challenge

News and Commentary

Seafarer Overseas Growth and Income Fund

Value Investor Insight – Roads Less Traveled

In an interview with Value Investor Insight, Andrew Foster explains that he searches for companies that can grow with sustainable profitability, and whose stocks are cheap enough to make them relatively immune to economic and cyclical risks.

Value Investor Insight Interview
Seafarer Overseas Value Fund

Mutual Fund Observer – Seafarer Overseas Value Fund

In Mutual Fund Observer’s profile of the Value Fund, Paul Espinosa describes EM corporates that are expanding internationally, led by management teams with experience in navigating challenging market conditions. : As of March 31, 2023, Samsung Biologics Co., Ltd. comprised 4.3% of the Seafarer Overseas Growth and Income Fund, Samsung Electronics Co., Ltd., Pfd. comprised 3.5% of the Fund, Samsung SDI Co., Ltd. comprised 2.6% of the Fund, Samsung C&T Corp. comprised 1.4% of the Fund, Samsung Electronics, Co., Ltd. comprised 1.4% of the Fund, WH Group, Ltd. comprised 1.3% of the Fund, Ambev SA comprised 2.1% of the Fund, Anheuser-Busch InBev SA comprised 2.2% of the Fund, and DFI Retail Group Holdings, Ltd. comprised 1.4% of the Fund. As of March 31, 2023, Samsung SDI Co., Ltd. comprised 3.1% of the Seafarer Overseas Value Fund, Samsung C&T Corp. comprised 2.0% of the Fund, Samsung C&T Corp., Pfd. comprised 0.2% of the Fund, WH Group, Ltd. comprised 2.7% of the Fund, Ambev SA comprised 2.3% of the Fund, Anheuser-Busch InBev SA comprised 2.8% of the Fund, Melco International Development, Ltd. comprised 3.5% of the Fund, Shangri-La Asia, Ltd. comprised 3.3% of the Fund, and DFI Retail Group Holdings, Ltd. comprised 2.4% of the Fund. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. As of March 31, 2023, the Seafarer Funds did not own shares in the other securities referenced in this commentary. Holdings are subject to change.

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CSIS ChinaPower Podcast – Interview with Nicholas Borst

In an interview with the CSIS ChinaPower Podcast, Nicholas Borst discusses how growing debt levels in China – concentrated among local governments, real estate developers, and state-owned enterprises – stem from an imbalanced fiscal system, and why they are a source of financial risk. Listen

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Field Notes

Mexico City: Corporate Underinvestment

One reason for Mexico’s slow economic growth is that companies are underinvesting, largely in response to the country’s current political environment.

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Ask Seafarer

What is Control Party Analysis?

Seafarer defines Control Party Analysis as an empirical means to assess the governance of a company, used in lieu of subjective attempts to determine “the quality of management.”

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