Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Seafarer Overseas Growth and Income Fund

Portfolio Review – Fourth Quarter 2020

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 – Fourth Quarter 2020

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

Letter to Shareholders – Semi-annual Report

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. Lastly, Kate explains that accelerated digitalization and evolving capital markets create investment opportunities in the developing world for the long-term investor.

Letter to Shareholders

News and Commentary

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
Prevailing Winds

Have 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.

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