During the first quarter of 2026, the Seafarer Overseas Growth and Income Fund returned 3.10%.¹² The Fund’s benchmark indices, the Bloomberg Emerging Markets Large, Mid, and Small Cap Net Return USD Index and the Morningstar Emerging Markets Net Return USD Index, returned -0.54% and -0.40%, respectively. By way of broader comparison, the S&P 500 Index returned -4.33%.

The Fund began the quarter with a net asset value of $14.86 per share. It paid no distributions during the quarter and finished the period with a value of $15.32 per share.³

Performance

Emerging market (EM) equities had a strong start in the first two months of 2026. The continued enthusiasm for artificial intelligence (AI) propelled many technology stocks higher. In addition, there was optimism that earnings growth in EM would continue, if not accelerate, in 2026. The prospects of stabilizing inflation in EM and interest rate cuts in the U.S. seemed to be additional supportive factors for the asset class. The Seafarer Overseas Growth and Income Fund was up 16.08% year to date as of end of February.

Investor sentiments took a U-turn as the U.S. and Israel launched military actions against Iran on February 28, 2026. The conflicts in the Middle East have led to a sell-off in global equity markets. Uncertainties surrounding the scope and the duration of the conflict have triggered violent stock price swings and market volatilities. The Fund was down -11.19% in the month of March, giving up the majority of the gains accumulated in the first two months of 2026. As events continued to unfold in the subsequent weeks, it became apparent that supply chain disruptions and rising energy prices will induce stress in the real economy, negatively affecting consumers, businesses and countries around the world in varying degrees in the near term.

Amid the backdrop of the military conflict in the Middle East, AI continued to be the bright spot and the main source of positive returns for the Fund, and to some degree for the Bloomberg benchmark index in the first quarter. However, compared to the benchmark, the Fund’s stock selections in the technology sector were less concentrated in the few mega cap semiconductor stocks. It is fair to say that the Fund’s sources of positive returns in the technology sector were spread across a relatively diverse set of companies with their own unique growth drivers.

Samsung Electronics, a leading memory semiconductor manufacturer in South Korea, was the Fund’s top contributor this quarter due to prospects of surging memory chip prices and the outlook for sustained demand for its products in the coming quarters. The other key positive contributor was Samsung SDI, a South Korean battery maker for EVs and consumer electronics. Samsung SDI produces energy storage systems and has recently gained traction by securing new orders in the U.S. Investors were also excited about the company’s prospects in supplying solid state batteries to be used in robotic applications. Two Taiwan-based technology component manufacturers, Accton Technology and Delta Electronics, performed strongly, driven by rising demand for sophisticated components and solutions used in networking and data center infrastructure build-outs and upgrades.

As of March 31, 2026, the Growth and Income Fund held three Middle Eastern holdings – National Central Cooling Co. and ADNOC Gas (both based in the United Arab Emirates), and Qatar Gas Transport (based in Qatar) – together accounting for 3.9% of net assets. Instead of reacting to every news headline with trading calls, we have maintained a disciplined approach since the onset of the war with Iran, focusing on factual developments and emerging risks within the portfolio. These holdings did not suffer from any physical or financial damage as of the time of writing; nonetheless, their share prices sold off during the month of March along with other EM stocks. As a group, these three positions were only modest detractors to the Fund’s performance due to their relatively small weighting.

Performance of holdings in other sectors was mixed. The Fund’s positions in the financials sector held up relatively well. Other holdings in “defensive” sectors such as health care and consumer staples did not experience as much correction in share price compared to holdings in the materials, consumer discretionary, and industrials sectors. It is tempting to draw quick conclusions that poor share price performance must mean that those companies were losers under the current market conditions. However, we believe that there are many nuances to the plausible causes of share price movements company by company.

UPL, an Indian crop protection chemical company, was the Fund’s top detractor to performance during the quarter. The company announced a series of corporate actions, including the listing of one of its subsidiaries, without raising new capital. The market seemed dissatisfied with UPL’s lack of further action to deleverage its balance sheet. Similarly, L&T Technology Services, an Indian engineering and R&D outsourcing provider, detracted from performance due to its strategic restructuring. The company has been streamlining its business portfolio to focus on high margin business segments; however, investors did not appreciate the long-term aspiration and were rather disappointed with the deceleration of revenue growth in recent quarters. Hermès, a French luxury goods maker, was another major detractor. This company may be seen as an obvious loser during the war due to short-term demand destruction. Its share price contracted sharply along with many companies in the luxury goods industry after the Middle East conflict began. While Hermès manufacturing assets were not impacted by the conflict, the market was concerned that consumers would curtail travel activities and discretionary spending amid the ongoing regional war.

Allocation

We continue to anchor our stock analysis and decision-making in factual insights and a long-term orientation. We are not dismissing the risks and challenges that geopolitical shocks may pose to the global economy. However, it is important not to lose sight of the opportunities to invest in bottom-up structural improvements, earnings power, and long-term compounding potential.

During the first quarter of 2026, the Growth and Income Fund introduced several new holdings across different industries. The Fund initiated a position in ASMPT, a back-end semiconductor equipment company based in Singapore. We believe that ASMPT is well positioned to supply high-end, advanced packaging equipment to both memory and logic semiconductor companies and to generate margin improvements in the coming years. It is also exploring a potential divestment of its surface mount technology business to channel more resources to its semiconductor operations, which we think is sensible.

The Fund also initiated a position in South Korea-based HD Hyundai Marine Solution, an aftermarket ship engine parts supplier, with capabilities in retrofitting ships and digital solutions, such as control systems. We like the company’s expanding margins and the highly recurring nature of its revenue, driven by the long lifecycle of ship engine parts maintenance and servicing. Lastly, the Fund introduced NARI Technology, a China-based smart grid equipment and solution provider, as a new holding. We are drawn to NARI Technology’s leading position across many product categories, such as grid digitization and grid substation automation, as well as its close relationship with its largest customer, State Grid. In our view, the company is poised to benefit from increases in smart grid spending in China over a multi-year horizon.

Finally, the Fund exited two small positions in the first quarter. One exit was Samsung Epis Holdings, a spun-out subsidiary of Samsung Biologics. We mentioned this corporate restructuring in the Fund’s fourth quarter 2025 portfolio review. We exited the position based on our view that the economics of biosimilar manufacturing and revenue visibility of Samsung Epis Holdings are less attractive than the contract development and manufacturing business of Samsung Biologics. The Fund also exited Samsung C&T due to its elevated valuation after a strong share price run-up. The proceeds were used to fund the purchase of new holdings.

Outlook

2026 started off as quite a roller coaster ride for global financial markets. The Middle East conflict has lasted nearly two months now, with limited visibility into an eventual resolution. At the onset of the war, market participants had little information, making the pricing of new geopolitical risks for stocks a messy, if not emotional, undertaking. Over time, hopes for a longer-term ceasefire emerged. However, the ongoing tension and activities in the Strait of Hormuz continue to hamper the movement of oil and gas, which most severely affect parts of Europe and Asia, which are comparatively more reliant on energy supply from the Persian Gulf region. On top of that, the supply of oil and gas byproducts that are essential building blocks in the manufacturing of everyday goods – such as fertilizers, plastic, and pharmaceuticals – is also disrupted. In a highly interconnected world, the disruptions in physical trade routes have already led to demand-supply dislocations and commodity price spikes, reigniting inflationary pressure globally. The control of the Strait of Hormuz remains a contentious and volatile issue to date.

At this juncture, we probably have more questions than answers regarding the duration of this conflict and its end state. Data points from earnings announcements will shed more light on impacts to corporate fundamentals over the coming quarters. As of the end of the first quarter of 2026, the Fund’s companies are forecast to generate earnings growth of 22% this year (based on consensus estimates)⁴. Despite the Fund’s sizable capital appreciation in 2025, it has a gross investment portfolio yield of 3.3% as of March 31, 2026. While the volatile market and operating conditions are likely to persist – and earnings growth could moderate later in the year – we feel constructive about the durability of the Fund’s holdings and their ability to navigate shocks and market cycles.

As mentioned earlier in this and previous commentaries, we have strived to seek as many diversified sources of earnings and dividend streams as possible, as we believe that investing in emerging markets is more than making tactical calls in country and sector rotation. We track our portfolio holdings’ fundamental developments and cash flow generation. We believe that ultimately earnings growth, valuation, and stock performance will align over longer term horizons. Many EM companies have proven to be resilient and adaptive through big shocks such as the Covid pandemic and the war in Ukraine. There are plenty of bottom-up opportunities in the emerging markets. The recent dislocations in the market will not derail our approach in seeking robust non-U.S. dollar sources of growth and income.

Thank you for entrusting us with your capital. We appreciate that you have selected Seafarer as your long-term investment adviser in the developing world, and we will continue to work to earn your trust in the years ahead.

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 March 31, 2026, securities mentioned in the portfolio review comprised the following weights in the Seafarer Overseas Growth and Income Fund: Samsung Electronics Co., Ltd. (4.6%), Samsung Electronics Co., Ltd Pfd. (0.9%), Samsung SDI Co. Ltd. (3.2%), Accton Technology Corp. (3.6%), Delta Electronics, Inc. (1.8%), National Central Cooling Co. PJSC (Tabreed) (1.1%), Adnoc Gas PLC (1.1%), Qatar Gas Transport Co., Ltd. (1.7%), UPL, Ltd. (1.8%), L&T Technology Services, Ltd. (1.3%), Hermès International SCA (1.5%), ASMPT, Ltd. (1.7%), HD Hyundai Marine Solution Co., Ltd. (1.3%), NARI Technology Co., Ltd. (1.3%) and Samsung Biologics Co., Ltd. (2.5%). The Fund did not own shares in Samsung Epis Holdings or Samsung C&T. View the Fund’s Top 10 Holdings. Holdings are subject to change.

Sources: ALPS Fund Services, Inc. and Bloomberg.

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.

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.

1. References to the “Fund” pertain to the Fund’s Institutional share class (ticker: SIGIX). The Investor share class (ticker: SFGIX) returned 3.05% during the quarter. The Retail share class (ticker: SFGRX) returned 3.05% 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 Investor share class began the quarter with a net asset value of $14.76 per share; and it finished the quarter with a value of $15.21 per share. The Fund’s Retail share class began the quarter with a net asset value of $14.74 per share; and it finished the quarter with a value of $15.19 per share.
4. Sources: ALPS Fund Services, Inc.; Bloomberg; Seafarer.