Seafarer®

Pursuing Lasting Progress in Emerging Markets®

Seafarer Overseas Growth and Income Fund

Overview

Investment Objective

The Fund seeks to provide long-term capital appreciation along with some current income; it also seeks to mitigate adverse volatility in returns.

Strategy

The Fund invests primarily in the securities of companies located in developing countries. The Fund invests in several asset classes including dividend-paying common stocks, preferred stocks, and fixed-income securities.

Investment Approach

The Fund seeks to offer investors a relatively stable means of participating in the growth of the developing world. It does so by investing in individual companies that the Adviser believes can generate sustained financial performance, typically manifest in the payment of steady (and sometimes growing) dividends over time.

The Adviser believes that selecting companies capable of paying steady (and sometimes growing) dividends can mitigate a portion of the risk associated with investing in the emerging markets, as dividends can act as an underappreciated signal for the quality of long-term corporate performance.

The Fund’s holdings are selected through bottom-up, fundamental research on individual companies. The research process focuses on cash flow, capital structure and control parties.

Fund Characteristics

Inception Date
Net Assets
Active Share vs Index
Portfolio Turnover
12-month period ended
12-month period ended
Distribution Frequency
Status SIGIX is open; SFGIX is closed to most new investors
Benchmarks
Morningstar Emerging Markets Net Return USD Index
Bloomberg Emerging Markets Large, Mid, and Small Cap Net Return USD Index

Portfolio Management

Andrew Foster Lead Manager
Paul Espinosa Lead Manager
Lydia So Lead Manager
Kate Jaquet Co-Manager

Ownership of Fund Securities

Share Classes

Investor Institutional
Ticker SFGIX SIGIX
CUSIP
NAV
30-Day SEC Yield
Fund Distribution Yield
Gross Expense Ratio1
Load
12b-1 Fee
Minimum Initial Investment – Regular Account
Minimum Initial Investment – Automatic Investment Plan2
Minimum Initial Investment – Retirement Account
Minimum Subsequent Investment

Underlying Portfolio Holdings

Holdings
% of Net Assets in Top 10 Holdings
Weighted Average Market Cap
Market Cap of Portfolio Median Dollar
Gross Portfolio Yield3
Price / Book Value3
Price / Earnings34
Earnings Per Share Growth34
The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.

Geographic Focus

Developing countries and territories including, but not limited to:

Africa Botswana, Ghana, Kenya, Mauritius, Morocco, Nigeria, Tunisia, South Africa, Zimbabwe
East and South Asia Bangladesh, China, India, Indonesia, Malaysia, Pakistan, Philippines, South Korea, Sri Lanka, Taiwan, Thailand, Vietnam
Emerging Europe Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Georgia, Greece, Hungary, Lithuania, Kazakhstan, Poland, Romania, Russia, Serbia, Slovenia, Turkey, Ukraine
Latin America Argentina, Brazil, Chile, Colombia, Jamaica, Mexico, Peru, Trinidad and Tobago
Middle East Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, United Arab Emirates

Select developed countries and territories with significant economic and financial linkages to developing countries, including, but not limited to, Australia, Hong Kong, Ireland, Israel, Japan, New Zealand, Singapore, and the United Kingdom.

Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer.
Portfolio holdings are subject to change.
  1. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver / Expense Reimbursements (inclusive of acquired fund fees and expenses, and exclusive of brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.15% and 1.05% of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement shall continue at least through August 31, 2024.
  2. Shareholders who sign up for an Automatic Investment Plan can request a waiver of the Institutional Class investment minimum. View the waiver program criteria.
  3. Calculated as a harmonic average of the underlying portfolio holdings.
  4. Based on consensus earnings estimates for next year. Excludes securities for which consensus earnings estimates are not available.

Performance

Total Returns

As of (Prior Month)

23 NAV / Index Level () Annualized Cumulative Inception Date Net Expense Ratio1 Gross Expense Ratio1
YTD 1 Mo 3 Mo 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Since Inception Since Inception

As of (Prior Quarter)

23 NAV / Index Level () Annualized Cumulative Inception Date Net Expense Ratio1 Gross Expense Ratio1
YTD 1 Mo 3 Mo 1 Yr 3 Yr 5 Yr 7 Yr 10 Yr Since Inception Since Inception
Growth of a $10,000 Investment Since Inception
The rates of return are hypothetical and do not represent the returns of any particular investment.
Fund performance is presented in U.S. dollar terms, with U.S. jurisdiction distributions reinvested on a gross (pre-tax) basis. For the Morningstar and Bloomberg indices, performance is calculated to reflect the reinvestment of dividends, capital gains, and other corporate actions net of foreign jurisdiction withholding taxes. The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost.
Source: ALPS Fund Services, Inc.

Return Characteristics as of

Relative to the Morningstar Emerging Markets Net Return USD Index except where noted.

3 years Since Inception4
Alpha
Beta
R-squared
R-squared vs. S&P 500 Index
Upside Capture Ratio
Downside Capture Ratio
Source: Morningstar.5
  1. Seafarer Capital Partners, LLC has agreed contractually to waive and/or reimburse fees or expenses in order to limit Total Annual Fund Operating Expenses After Fee Waiver / Expense Reimbursements (inclusive of acquired fund fees and expenses, and exclusive of brokerage expenses, interest expenses, taxes and extraordinary expenses) to 1.15% and 1.05% of the Fund’s average daily net assets for the Investor and Institutional share classes, respectively. This agreement shall continue at least through August 31, 2024.
  2. The Seafarer Funds are not sponsored, endorsed, sold, or promoted by Morningstar, Inc. Morningstar, Inc. makes no representation or warranty, express or implied, to the shareholders of the Funds or any member of the public regarding the advisability of investing in the Funds or the ability of the Morningstar Emerging Markets Net Return U.S. Dollar Index to track general equity market performance of emerging markets.
  3. Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
  4. As of 3/1/12.  The Fund’s inception date is 2/15/12 but Morningstar data is only available as of the beginning of the following month.
  5. © Morningstar, Inc. All rights reserved. The data in the Return Characteristics table is proprietary to Morningstar and/or its content providers; may not be copied or distributed; and is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Composition

Top 10 Holdings as of

Holding4 Sector Country Style1 Issuer Mkt Cap ($B) Yield2 Price/ Book Price/ Earnings3 EPS Growth3
Portfolio holdings are subject to change.
Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer.

View all Holdings

Portfolio Composition by Region as of

All Holdings ADRs, Common & Preferred Equities Only
% Net Assets Price / Earnings56 EPS Growth56
Region # of Holdings Fund +/− vs. Index Avg Mkt Cap ($B) Gross Yield5 Price / Book5 Prior Year This Year Next Year This Year Next Year
Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer.

Portfolio Composition by Sector as of

All Holdings ADRs, Common & Preferred Equities Only
% Net Assets Price / Earnings56 EPS Growth56
Sector # of Holdings Fund +/− vs. Index Avg Mkt Cap ($B) Gross Yield5 Price / Book5 Prior Year This Year Next Year This Year Next Year
Sources: ALPS Fund Services, Inc., Bloomberg, Seafarer.
30-Day SEC Yield: SFGIX ; SIGIX ()
The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.

Portfolio Composition by Style as of

Investment Style1 # of Holdings % Net Assets
Source: Seafarer.

Portfolio Composition by Asset Class as of

Asset Class # of Holdings % Net Assets
Source: ALPS Fund Services, Inc.

Portfolio Composition by Market Capitalization as of

Market Capitalization # of Holdings % Net Assets +/− vs. Index
Sources: ALPS Fund Services, Inc., Seafarer.
Due to rounding, percentage values may not sum to 100%. Values less than 0.5% may be rounded to 0%.
  1. Research Capabilities

    The Growth and Income Fund selects a range of securities by employing distinct research capabilities across three investment styles.

    Style Characteristics of Holdings
    Balanced Moderately underappreciated growth Typically moderately elevated current yield
    Growth Higher growth potential Typically lower current yield; sometimes no yield (dividend policy not yet established)
    Value Lower growth potential Typically higher current yield; sometimes no yield (dividends canceled under financial stress)
  2. Yield = dividend yield for common and preferred stocks and yield to maturity for bonds.
  3. Based on consensus earnings estimates for next year.
  4. The Fund has two distinct holdings in the stock of Samsung Electronics: a larger position in the company’s preferred shares (as seen in the Top 10 Holdings table) and a smaller position in the company’s ordinary common shares. While the two securities are distinct (different prices, different dividends, etc.), if the two securities were aggregated, Samsung Electronics would comprise the largest holding in the Fund as of 12/31/23.
  5. Calculated as a harmonic average of the underlying portfolio holdings.
  6. Based on consensus earnings estimates. Excludes securities for which consensus earnings estimates are not available.

Distributions

For More Information

Individual Investors

(855) 732-9220 (Mon–Fri 9am–8pm ET)
seafarerfunds@alpsinc.com

Investment Professionals

(415) 578-5809 (Mon–Fri 9am–8pm ET)
clientservices@seafarerfunds.com

2024 Distribution Dates

Distribution frequency: Semi-annual

Please note: future dates are subject to change.

Record Date Ex, Pay and Reinvest Date
Mid-year Distribution 6/26/24 6/27/24
Year-end Distribution 12/11/24 12/12/24

To be notified of distribution estimates, sign up for Seafarer email updates.

Historical Distributions

Ex, Pay and Reinvest Date Reinvest NAV Ordinary Income Short Term Capital Gains Long Term Capital Gains Total Distrib. Per Share Cumulative Distrib. Per Share Since Inception
SFGIX (Investor Class)
SIGIX (Institutional Class)

For more information on the Fund’s distribution policies, please see the “Dividends and Distributions” section of the Prospectus.

Foreign Source Income

The Seafarer Overseas Growth and Income Fund has elected to pass through to shareholders the foreign taxes paid on income earned from foreign investments. These foreign taxes are reported in Box 7 of Form 1099-DIV. As a shareholder in the Fund, you may be able to claim a tax credit or an itemized deduction on your federal tax return for the amount of taxes paid to foreign countries. Please consult your tax adviser.

Year Foreign Source Income (as a % of Box 1a on Form 1099-DIV)
Past performance is no guarantee of future results. There is no guarantee that the Fund will pay or continue to pay distributions.

Portfolio Review

Seafarer Overseas Growth and Income Fund

Portfolio ReviewFourth Quarter 2023

During the fourth quarter of 2023, the Seafarer Overseas Growth and Income Fund returned 8.43%.12 The Fund’s benchmark indices, the Morningstar Emerging Markets Net Return USD Index and the Bloomberg Emerging Markets Large, Mid, and Small Cap Net Return USD Index, returned 7.77% and 6.85%, respectively. By way of broader comparison, the S&P 500 Index returned 11.69%.

The Fund began the quarter with a net asset value of $11.78 per share. During the quarter the Fund paid a distribution of approximately $0.091 per share. This payment brought the cumulative distribution, as measured from the Fund’s inception, to $5.108 per share.3 The Fund finished the quarter with a value of $12.68 per share.4

During the calendar year, the Fund returned 14.31%, whereas the benchmark indices, the Morningstar Emerging Markets Net Return USD Index and the Bloomberg Emerging Markets Large, Mid, and Small Cap Net Return USD Index, returned 11.54% and 9.50%, respectively.5

[Please note: this Portfolio Review encompasses only the fourth quarter of 2023, and does not offer a thorough discussion of the entire calendar year. The Fund operates on a fiscal year that concludes April 30; as such, Seafarer offers comprehensive performance reviews for the Fund’s annual and semi-annual periods, which are published in the Fund’s Shareholder Reports in late June and December, respectively. Previous Shareholder Reports are available in the Archives.

Performance

After a tumultuous third quarter – tumult that extended into late October – the benchmarks and the Fund surged, racing higher during the final two months of the year. All finished the quarter with substantial absolute gains, as noted above.

I do not definitively know the impetus behind emerging equities’ surge. I suspect that the U.S. Federal Reserve may have been the proximate cause: in late October, Chairman Jay Powell intimated that the Federal Reserve was unlikely to raise interest rates further, stating that the Fed had “come very far with this rate hiking cycle, very far.”6 Markets for financial assets appeared to respond jubilantly to his pronouncement. In knee-jerk fashion, the U.S. dollar weakened, and emerging market currencies leapt higher. I estimate that emerging currency strength accounted for nearly one third of the Fund’s gain during the quarter, almost thirty percent of the Morningstar benchmark’s return, and again nearly one third of the Bloomberg benchmark’s gain.7

Yet apart from shared gains in emerging currencies, the sources of return for the Fund and its benchmarks could not have been more different during the quarter. The two benchmarks were driven by exposure to Taiwan and India, which together accounted for over half of their gains.7 By contrast, the Fund’s surge was due primarily to its holdings in South Korea, and also by its exposure to Latin America, generally – Brazil, Mexico and Peru.7 Most notably, the Fund eked out a small, collective gain from its holdings in China, whereas China equities delivered a major loss for both of the benchmarks.7

In like fashion, the sectors that drove the benchmarks and the Fund were disparate. After leading semiconductor companies signaled stabilization in their industry – an industry that had been beset by a glut of supply over the preceding eighteen months – technology stocks surged, pushing the indices higher.7 Financial stocks also boosted gains, presumably due to speculation about declining interest rates in the future.7 Conversely, the indices also saw gains in materials and commodities stocks – sectors that are traditionally correlated positively with inflationary pressures.7 The Fund profited most from its exposure to financial services stocks, and technology stocks also boosted returns; however, apart from that overlap with the benchmarks, the Fund’s sources of return were more diverse, with meaningful contribution from its holdings in consumer stocks (both “staples” and “discretionary” stocks), health care, and industrials.7

As described above, the Fund’s divergent performance can be attributed mathematically to various countries and sectors. Yet I believe the Fund’s outperformance over both the quarter and the year are best explained by its “fundamentals,” not geographical or industrial exposures.8 From the outset, 2023 was marked by decelerating growth and contracting profits: at the beginning of the year, the “consensus estimate” for aggregate earnings in the emerging markets was a contraction of -3%.9 Yet as the year wound to a close, poor corporate profitability – especially in China – pushed the 2023 forecast to -9%.10 Meanwhile, your Fund’s holdings appear to be on track to produce, in aggregate, 1% earnings growth in 2023, according to the same consensus estimates.7 Admittedly, this represents only a modest expansion; but against a backdrop of utter collapse, I believe such persistence sets the portfolio’s holdings apart. I suspect the Fund’s outperformance in 2023 was due ultimately to the stability of its underlying profit growth, amid a marketplace caught off guard by weak and falling earnings.

Allocation

During the quarter, the Fund added two positions; and shortly after the close of the quarter, the Fund exited one holding in early January.

The Fund added a new holding in Tata Motors, a global automotive company based in India. Tata Motors is one of the largest vehicle producers in India, with substantial share in both passenger and commercial vehicle markets. It also owns Jaguar Land Rover (JLR), having purchased the two marks in the depths of distress from Ford in 2008. Tata has had a challenging decade, during which ill-fated passenger vehicle concepts flopped; it was sufficiently distracted to have lost substantial share to rivals in India’s profitable commercial vehicle market. Meanwhile, after an impressive start in electric vehicles (EVs) with the well-received Jaguar I-Pace in 2018, JLR has struggled with quality concerns and an ultra-competitive marketplace for luxury vehicles – especially EVs. Yet our Value team (led by Paul Espinosa) is convinced that Tata is now refocused on rebuilding share in the domestic market; and at the same time, they expect Tata can drive a revitalization at JLR, spurred by new and higher-quality product offerings resulting from switching Land Rover to an all-EV manufacturing platform. If a recovery of this sort transpires, our team believes Tata Motors’ current stock price allows investors to purchase two large automotive companies for the price of one.

The Fund also initiated a position in Raia Drogasil, a chain of pharmaceutical stores in Brazil. At present, Brazil’s pharmaceutical industry is sparsely populated by small, often inefficiently-run storefronts. After extensive research on Raia, our Growth team (led by Lydia So) has concluded that the company can grow in four distinct ways over time. First, Raia has demonstrated that it can consolidate the industry successfully via acquisition. Second, as Raia consolidates share, it has driven efficiency gains from its greater scale and professionalized management. Third, Raia has grown by steadily expanding the quality, value, and number of products available in each storefront, thereby expanding the sales per store. Fourth, there are simply too few pharmacies in the country relative to Brazil’s population, and its rising demand for better health outcomes; Raia can expand simply by opening more storefronts in underserved communities.

The Fund exited one holding in early January, Coca-Cola Femsa of Mexico. The Fund first established a holding in the company in May of 2021, and had enjoyed substantial price appreciation (the stock doubled) and dividends (the stock has offered a dividend yield in excess of 4% per annum for much of the interim period).7 Our Value team chose to exit the stock in light of its appreciation, and in order to fund the aforementioned position in Tata Motors.

Outlook

The emerging markets are traversing a fragile moment. Ostensibly, growth is quite weak: as noted in the Performance section above, earnings growth is expected to be -9% for 2023,11 and China – the biggest developing country by far – is in a deep economic slump. Yet despite this malaise, analysts have forecast nearly 18% profit growth for 2024.12 This outrageous forecast has a little bit of underlying merit, if one probes the details behind it: analysts presume that India’s growth will keep chugging along, that China’s growth will “normalize,” and that the semiconductor industry – a dominant driver of aggregate earnings – will experience a dramatic recovery from the glut it experienced in 2023. In addition, many other emerging markets apart from China currently enjoy reasonably healthy conditions for growth (e.g., Brazil, Mexico, some countries within the Middle East, and much of Southeast Asia). If all of these things were to occur simultaneously, more bullishness would be warranted.

Personally, though, I think the extreme dichotomy between Wall Street’s ebullient forecast and the moribund reality is absolute bunk. I caution investors to ignore any hype that emerging markets are “cheap” based on a price-to-earnings (P/E) ratio: strategists will inevitably highlight the forecast P/E at end of 2024 (which happens to be 11.5); but that low P/E is predicated on the aforementioned 18% growth, a forecast which I find terribly unrealistic.12 Yet even as analysts have overhyped conditions, I do not think 2024 will be a complete “wash.”

Growth is sluggish in the emerging markets because demand is weak. The emerging markets do not have an inflation problem: most all countries (save India) have inflation under reasonable control, and many central banks have begun cutting domestic rates in response to stable prices and weak demand. Interestingly, they have begun doing so in advance of the U.S. Federal Reserve – they also began their rate-hiking cycle in 2020-21 in advance of the Fed too – suggesting that most of the central banks in the developing world no longer take their cues from Fed policy or dollar-based money markets.

I suspect that 2024 will not be a year of astounding growth, but one of gradual recovery: corporate earnings –which have been beset by economic cyclicality, exceptional conditions during the global pandemic, and often problematic domestic economic policy – will finally start to stabilize after nearly five years of disruption. If inflation remains quiescent, central banks will continue to ease rates further, supporting the nascent recovery. If I am correct, earnings will finish the year on much stronger footing than 2023, while still falling well short of an 18% expansion. Absent a negative, exogenous shock, earnings growth could accelerate further in 2025.

Naturally, some might be wary of conditions where central banks in developing countries are cutting rates, and at the same time, the Fed is set to keep rates “higher for longer” (inflation does not appear entirely under control in the U.S.). Won’t this beget terrible weakness among emerging currencies? After all, the dollar is king! Maybe, but I doubt it. Simply put, the data states the dollar is no longer king, and hasn’t been for some time. Gold’s high price tells you as much; inflation tells you the same in the inverse (the price for goods escalates in dollar terms precisely because the dollar itself is weak).

More astonishingly, but equally true: the dollar has been surpassingly weak when measured against a credible basket of emerging market currencies. Bloomberg and MSCI each produce specialized indices that measure the performance of representative baskets of currencies from the developing world. Both indices are presently within a short distance of their historical peak values versus the U.S. dollar (both are roughly 2% lower).13 See the Bloomberg index in Figure 1. Paradoxically, this has occurred even as the Fed has hiked rates more aggressively than it has done in any period since Chairman Paul Volker’s era.7 As mentioned above, many central banks in the developing world are already cutting rates, and yet their currencies remain resilient versus the dollar.

Figure 1. Bloomberg Emerging Markets Large, Mid, and Small Cap Currency Implied Yield Index
Source: Bloomberg.
Past performance does not guarantee future results.

This counterintuitive outcome was recognized recently by no less an authority than Goldman Sachs. Kamakshya Trivedi, Head of Global Foreign Exchange and Emerging Markets Strategy Research, noted that normally, an “aggressive hiking cycle by the Fed … and a slowing China … [should result in] a pretty bad combination of circumstances for EM assets and despite that, EM assets have performed resiliently.”14 One must wonder: does the Fed call the shots any longer? Is the dollar still king?

Why is this happening? Why is the dollar so weak versus emerging currencies, even as the Fed has enacted aggressive monetary policy to stem inflation and shore up the dollar? The underlying forces are complicated, and I don’t pretend to understand them all. However, I suspect that “decoupling” has played a role. As Americans, we know very well how our country has sought to reorder global trade relationships for the past six years or so, with an intent to “decouple” from the developing world (especially China). However, trade flows are not the only economic activity that has undergone substantial decoupling: certain types of critical capital flows have decoupled as well.

When I began my career in the developing world nearly three decades ago, most emerging markets suffered from grossly underdeveloped domestic capital markets. They had puny, illiquid stock markets; banking markets were stunted, under heavy state suasion or outright control; and domestic, local-currency bond markets were almost non-existent. The lack of local bond markets posed an acute problem for corporations and other institutions: how could they obtain funding for long-term capital projects, such as critical infrastructure or utilities? Without long-term, local-currency bond markets to tap, companies were forced to turn to the only long-term funding markets open to them: offshore U.S. dollar bond markets. Dollar-based markets were the only ones that could provide – at a price – capital in sufficient quantities and tenors. Yet this meant corporations bore terrible currency mismatches, funding locally-denominated projects with foreign money. It also meant that developing countries were highly dependent on the availability of U.S. dollars, and therefore especially beholden to U.S. interest rate policy.

Much has changed since then. Local capital markets have evolved and developed. Now, most of the larger emerging markets enjoy long-term, local-currency bond markets that are traded and funded primarily by domestic investors. As such, most of the emerging markets are far less dependent on the dollar; nor does Fed policy cast such a long shadow over emerging currencies; nor does the Fed seem to dictate the policy settings of local central banks. I suspect this “decoupling” of the capital markets is the single most important reason why emerging currencies have exhibited such counterintuitive strength: the developing world is far less dependent on the dollar than it once was.

What does this mean for the investment outlook? I don’t have a crystal ball; I don’t know what exogenous shocks might occur. I am especially blind as to what shocks might stem from the many sad military conflicts that simmer and rage around our world. However, absent such shocks, I think that over the next two years we will see central banks in the developing world continue to ease monetary policy. This will gradually restore demand, thereby stabilizing growth in 2024, and possibly accelerating it thereafter. Yet even as growth accelerates, I suspect it will occur against a backdrop of emerging currency strength versus the dollar, not weakness, and that such strength will be evident regardless of the policy settings of the Fed.

As I conclude these remarks, I want to thank you for your patience. Ordinarily, I attempt to publish a review for the Fund within the first three to four weeks following the close of the quarter. However, 2024 has proven to be a very busy year for Seafarer, and for me personally. I have been tardy in the publication of this review, and I appreciate your understanding. As always, I thank you for entrusting us with your hard-earned capital. We are honored to serve as your investment advisor in the emerging markets, and we will strive to earn your trust every day.

Andrew Foster,
with
Paul Espinosa,
and
Lydia So,
The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect Seafarer’s current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Seafarer does not accept any liability for losses either direct or consequential caused by the use of this information.
As of December 31, 2023, securities mentioned in the portfolio review comprised the following weights in the Seafarer Overseas Growth and Income Fund: Tata Motors, Ltd. (0.9%), Raia Drogasil SA (1.0%), and Coca-Cola Femsa SAB de CV (1.5%). The Fund did not own shares in Goldman Sachs. View the Fund’s Top 10 Holdings. Holdings are subject to change.
Source: ALPS Fund Services, Inc.
The Seafarer Funds are not sponsored, endorsed, sold, or promoted by Morningstar, Inc. Morningstar, Inc. makes no representation or warranty, express or implied, to the shareholders of the Funds or any member of the public regarding the advisability of investing in the Funds or the ability of the Morningstar Emerging Markets Net Return U.S. Dollar Index to track general equity market performance of emerging markets.
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
  1. References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIGIX). The Investor share class (ticker: SFGIX) returned 8.42% during the quarter. All returns are measured inclusive of Fund distributions paid (in relation to Fund performance) or dividends paid (in relation to index performance), reinvested in full (exclusive of any U.S. taxation) on the pertinent ex-date.
  2. The performance data quoted represents past performance and does not guarantee future results. Future returns may be lower or higher. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. View the Fund’s most recent month-end performance.
  3. The Fund’s inception date is February 15, 2012.
  4. The Fund’s Investor Share class began the quarter with a net asset value of $11.70 per share; it paid a distribution of approximately $0.083 per share during the quarter; and it finished the quarter with a value of $12.60 per share.
  5. The Fund’s Investor class returned 14.23% during the calendar year.
  6. Powell, Jerome. “Transcript of Chair Powell’s Press Conference,” U.S. Federal Reserve, November 1, 2023.
  7. Sources: Bloomberg, Seafarer.
  8. By “fundamentals,” I mean the underlying characteristics, financial and operational performance of the portfolio’s corporate holdings.
  9. “Consensus estimates” are statistics compiled to measure and aggregate the various financial forecasts produced by investment banking analysts and strategists. In this case, the consensus estimates for aggregate earnings growth are represented for the MSCI Emerging Markets Index. Source: J.P. Morgan, “Emerging Markets Equity Strategy Steering Board,” January 5, 2023.
  10. Source: J.P. Morgan, “Emerging Markets Equity Strategy Steering Board,” December 21, 2023.
  11. Even though this review has been published in early February, the ultimate outcome for 2023 earnings won’t be known until early April – many companies in the developing world take three months to publish their full-year results. They are often required to publish a brief statistical abstract earlier, but the full earnings results often aren’t released until their annual reports are published – and that process can extend into April in some countries.
  12. Source: J.P. Morgan, “Emerging Markets Equity Strategy Steering Board,” January 4, 2024.
  13. As of February 8, 2024, the MSCI Emerging Markets Currency Index was 2.0% lower than its all-time high level (which was attained June 8, 2021). As of February 8, 2024, the Bloomberg Emerging Markets Large, Mid, and Small Cap Currency Implied Yield Index was 2.6% lower than its all-time high level (which was attained June 10, 2021).
  14. Sources: “Goldman’s Painful 2023 Lesson on China Forces Rethink of Emerging Markets,” Bloomberg News, December 25, 2023.