Five-star Seafarer and its neighbors

David_Snowball

As we'd anticipated, Seafarer Overseas Growth & Income (SFGIX/SIGIX) just received their inaugural five-star rating from Morningstar. And they're also Great Owl funds, based on our more risk-sensitive rankings.

Of 219 diversified EM funds currently tracked by Morningstar, 18 have a five-star rating. 13 are Great Owls. Seafarer and 10 others (representing 5% of the peer group) are both five-star and Great Owls.

Baron Emerging Markets(BEXFX) - $1.5 billion in AUM, 1.5% e.r., not quite five years old, large-growth with an Asian bias, mgr also runs Int'l Growth.
City National Rochdale Emerging Markets (RIMIX) - 90% invested in Asia, City National Bank, headquartered in Hollywood, bought the Rochdale Funds and was itself bought in January 2015 by the Royal Bank of Canada. Interesting funds. No minimum investment but a 1.61% e.r. The EM fund acquires exposure to Indian stocks by investing in a wholly owned subsidiary domiciled in Mauritius. Hmmm.
Driehaus EM Small Cap Growth (DRESX) - a $600 million hedged fund (and former hedge fund) for which we have a profile. Expenses are 1.71%.
Federated EM Equity (FGLEX) - a $13 million institutional fund with a $1 million minimum, not quite five years old, mostly mega cap portfolio that had two really good years followed by two really soft ones.
HSBC Frontier Markets (HSFAX) - 5% front load, 2.2% e.r., $200 million in AUM, midcap bias and a huge overweight in Africa & the Middle East at the expense of Asia. Curious.
Harding Loevner Frontier EM (HLMOX) - modest overweight in Asia, huge overweight in Africa & the Middle East, far lower-than-average market cap, half a billion in assets, 2.2% e.r.
Mirae Asset EM Great Consumer (MECGX) - marginal inclusion since the retail shares are four stars (1.85% e.r. is a drag) while institutional is five stars, not quite five years old, mega cap growth, lots of companies (hotels, consumer goods, drug companies) that directly interface with consumers.
Seafarer Overseas Growth & Income (SFGIX) - $136 million in AUM, 1.4% e.r., small- to mid-cap bias, top 4% returns over its first three years of operation
Thornburg Developing World (THDAX) - oopsie: lead manager Lewis Kaufman just jumped from the $3 billion ship to start an EM team at Artisan.
Wasatch Frontier Emerging Small Countries - $1.3 billion in AUM and closed to new investors
William Blair EM Small Cap Growth - $300 million in AUM and closed to new investors.

On face, the pattern seems to be that small works. Lots of exposure to smaller firms located in smaller markets, even by EM standards. SFGIX is the second-smallest fund in the group, which makes it all the more striking that it's the least expensive of all. Among the least risky of this elite group.

Congratulations to Andrew and his team. We'll share a conference call with him on April 16 and you'd be more than welcome to join us.

David

Crash

Thanks for that work and for posting that, David. As ever, you are a Star!

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Old_Joe

I'm with you, Mo. Have some SFGIX, but kept MAPIX also. MAPIX seems to be doing pretty well so YTD, despite the lack of dividend last qtr.

David_Snowball

Certainly not pickin' on Matthews. My screen focused just on the diversified EM world. Like you, I maintain a position with Matthews albeit MACSX rather than MAPIX.

David

LLJB

I know the whole category problem with not enough funds to create a separate one, but sometimes I feel like funds such as WAFMX, HLMOX and HSFAX shouldn't be in the same group. They are Frontier Markets funds and although I'll also admit there's overlap they are really intended to play a different game. Nonetheless, the summary is great. Thanks David! Is William Blair playing the Grandeur Peak game? Closing their fund with only a few hundred million of assets? That's pretty impressive because I didn't realize they were so shareholder friendly.

FWIW, I also own MAPIX but not as an emerging markets position.