Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Letter to Shareholders – Semi-annual Report

Tianjin, China

In light of volatile markets and changing sentiment towards China, Nicholas Borst reports that Seafarer will continue to “seek truth through facts” when investing in China, through thorough analysis of corporate earnings, balance sheets, and governance structures.

Letter to Shareholders

Brazil’s Fintech Revolution

Fintech companies in Brazil are upending the country’s banking system, serving consumers in new ways, and offering millions of Brazilians their first bank accounts.

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Seafarer Overseas Growth and Income Fund

Portfolio Review

Seoul, South Korea

Andrew Foster reports that the Growth and Income Fund’s holdings in China and South Korea accounted for the majority of the Fund’s decline, while holdings in Latin America and Eastern Europe were relatively stable. While noting several risks that weigh heavily on the EM asset class, he is optimistic about long-term investment returns due to growing corporate earnings and low valuations.

Portfolio Review
Seafarer Overseas Value Fund

Portfolio Review

Bangkok, Thailand

Paul Espinosa discusses the holdings that impacted the Value Fund’s performance – including Melco, Itaú Unibanco, and Ambev – and explains how they reflect Seafarer’s value ethos. He reports that Siam Cement, a new Fund holding, distinguishes itself through its balance sheet management, regional expansion, and dividend payments.

Portfolio Review
Seafarer Overseas Growth and Income Fund

Portfolio Briefing

Andrew Foster explains that in a difficult quarter for stock markets globally, the Growth and Income Fund was impacted by sharp corrections in China and South Korea. He notes that EM valuations are attractive for long-term investors, but cautions that investors should consider geopolitical and market risks related to China, Taiwan, Russia, and India.

Portfolio Briefing
Seafarer Overseas Value Fund

Portfolio Briefing

Amid a global sell-off in stocks, Paul Espinosa attributes the Value Fund’s outperformance versus the benchmark to the resilience of its holdings. Brent Clayton introduces a new Fund holding, Siam Cement, an industrial conglomerate that operates throughout Southeast Asia.

Portfolio Briefing

Prevailing Winds

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Prevailing Winds

Security Over Growth: China’s New Economic Approach

Shenzhen, China

A growing sense of internal and external vulnerability has led Xi Jinping to emphasize security and political concerns in China’s economic policy.

Security Over Growth: China’s New Economic Approach
Prevailing Winds

The Balance Sheet Constraints on China’s Economic Stimulus

Shanghai, China

As China faces major economic headwinds, Beijing’s attempts to stimulate growth are constrained by large contingent liabilities and a struggle for fiscal control with local governments.

The Balance Sheet Constraints on China’s Economic Stimulus
Prevailing Winds

Fixing China’s Broken Balance Sheets

Beijing, China

China’s approach to repairing weak balance sheets and preventing financial instability reflects lessons learned from past crises and the current priorities of Xi Jinping.

Fixing China’s Broken Balance Sheets

News and Commentary

OMFIFChina’s Economic Recovery is Balance Sheet Constrained

In OMFIF, Seafarer’s Nicholas Borst writes that Beijing can no longer spare its own balance sheet if it wants to both stimulate the economy and keep local governments solvent. : As of September 30, 2022, the Seafarer Funds did not own shares in the entities referenced in the article. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change.

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Seafarer Overseas Value Fund

Financial Advisor – Finding Hidden Value in Emerging Markets

In an interview with Financial Advisor, Paul Espinosa discusses the Value Fund’s bottom-up security selection process and how Seafarer’s team finds companies with distinct sources of investment return. : As of June 30, 2022, Qatar Gas Transport Co., Ltd. comprised 2.1% of the Seafarer Overseas Growth and Income Fund, National Central Cooling Co. PJSC (Tabreed) comprised 2.0% of the Fund, DFI Retail Group Holdings, Ltd. comprised 1.6% of the Fund, WH Group, Ltd. comprised 1.3% of the Fund, Moneta Money Bank AS comprised 1.6% of the Fund, Anheuser-Busch InBev SA comprised 2.1% of the Fund, and Ambev SA comprised 2.6% of the Fund. As of June 30, 2022, Qatar Gas Transport Co., Ltd. comprised 4.4% of the Seafarer Overseas Value Fund, National Central Cooling Co. PJSC (Tabreed) comprised 4.3% of the Fund, DFI Retail Group Holdings, Ltd. comprised 3.3% of the Fund, WH Group, Ltd. comprised 3.2% of the Fund, Moneta Money Bank AS comprised 3.2% of the Fund, Anheuser-Busch InBev SA comprised 3.0% of the Fund, and Ambev SA comprised 2.5% of the Fund. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change.

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Message to Shareholders – Portfolio Manager Update

Seoul, South Korea

Effective August 31, 2022, Lydia So was named a Lead Portfolio Manager of the Seafarer Overseas Growth and Income Fund. She joins Andrew Foster and Paul Espinosa, who remain Lead Portfolio Managers of the Fund.

Message to Shareholders

The DiplomatChina’s Interventionist Approach to Managing Financial Risks

In The Diplomat, Seafarer’s Nicholas Borst writes that China’s new approach to cleaning up the financial sector is likely to result in a more state-centric economy. : As of June 30, 2022, the Seafarer Funds did not own shares in the entities referenced in the article. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change.

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Today On Wall St.Is Evergrande China’s Lehman Moment?

In an interview with Today On Wall St., Seafarer’s Nicholas Borst explains why discussion of a “Lehman Moment” in China overlooks the fact that the country’s property sector is grappling with problems distinct from those the U.S. faced in 2008. : As of March 31, 2022, the Seafarer Funds did not own shares in the entities referenced in the video. View the Top 10 Holdings for the Growth and Income Fund and the Value Fund. Holdings are subject to change.

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