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Thanks, Charles, I'd registered but spaced that it's today.
I'll be interested to hear if AF expands on the Q2 narrative concerning the source of losses during the quarter -- he says two Latin American mining/materials stocks were responsible for 75% of the fund's downside, and those were a departure from his usual investment discipline of avoiding the most volatile cyclical stocks. That discipline is one of the reasons I had the confidence to invest in the fund in the first place, so I'm a little disappointed in that news.
The team did spend several minutes explaining the two LA materials positions (SQM and Vale), which accounted for 40% of the fund's Q2 losses, while LA overall accounted for 75% of the losses. Basically, they were considered quality businesses with good market positions trading at attractive valuations, and now they're at even more attractive valuations. They're a higher global growth-scenario investment; since essentially the entire rest of the portfolio is staked out for a lower growth scenario, they look at those two as balancing their outlook. The Vale investment is in preferred shares with a div yield > 7%.
In answer to a question, Andrew F. said he thinks EMs overall are at attractive valuations now, about a 7 on a 1-10 scale, and they're planning to make some active moves to take advantage of the situation.
There was a lot more to the call, and good charts and summary pages on the site for following the presentation ... worth a listen for SFGIX shareholders or potential buyers.
Thank Andy. I agree. Mr. Foster does an outstanding job keeping his stakeholders informed of his strategies and execution. Like it too that he is introducing us to others in the firm. I continue to be impressed with Seafarer's commitment to shareholder interests. In addition to the topics you touched on, I liked the discussion about BRICs and his take on emerging middle class in Brazil and Turkey. Oh, and his take on currency risk. Really good call.
It's very comforting to have that information, and I thank both of you. OK, Latin America is down right now, so that provides a background which naked figures in a spreadsheet comparative list do not explain. I'll hold onto SFGIX now that I know what the story is.
Bought SQM a few months ago, since it was in the Seafarer portfolio and I think AF knows what he's doing. Guess I should buy more now. Too bad I don't have any money. Looks like there will be time to average in. FWIW, I did think his analysis was logical, and don't plan to bail on his fund even though it's one of the (at least, my) few losers in the current market.
Comments
I'll be interested to hear if AF expands on the Q2 narrative concerning the source of losses during the quarter -- he says two Latin American mining/materials stocks were responsible for 75% of the fund's downside, and those were a departure from his usual investment discipline of avoiding the most volatile cyclical stocks. That discipline is one of the reasons I had the confidence to invest in the fund in the first place, so I'm a little disappointed in that news.
In answer to a question, Andrew F. said he thinks EMs overall are at attractive valuations now, about a 7 on a 1-10 scale, and they're planning to make some active moves to take advantage of the situation.
There was a lot more to the call, and good charts and summary pages on the site for following the presentation ... worth a listen for SFGIX shareholders or potential buyers.
FWIW, I did think his analysis was logical, and don't plan to bail on his fund even though it's one of the (at least, my) few losers in the current market.