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Seafarer conference call, February 19, 7:00 - 8:00 EST

The first anniversary of Seafarer Overseas Growth & Income is Friday of this week. Andrew agreed to talk with us in a sort of celebration of finishing up that first year. He thought he could best serve his investors by being able to diversify beyond Asia, and it now holds about 15% each in Latin America and emerging Europe. The fund has done well: $10,000 invested at inception would have grown to $11,700 today. The emerging markets average: $10,500. And folks have started to notice: Seafarer recently crossed $35 million in AUM.

Three notes:

1. I'd be delighted to have you join in on the call.

2. I'd be equally delighted (perhaps a little tingly) if you had questions that you thought Andrew should address. You can either share them with me or directly with him, on Tuesday.

3. As you know, we maintain a mailing list of folks interested in participating in our calls. I give them a heads-up one week before each call. For what interest it holds, I've appended the text of the message that they'll be receiving about 7:00 or 8:00 tonight.

As ever,


The Observer is pleased to invite you to join a conversation with Andrew Foster, manager of Seafarer Overseas Growth & Income (SFGIX and SIGIX). Andrew compiled an incredibly distinguished record for risk-aware emerging markets investing during a long stint at manager or co-manager at Matthews Asia. Andrew agreed to join us on the first anniversary of launching Seafarer, a fund which allows him to apply his considerable talents to a broader set of emerging markets. Seafarer substantially outperformed (some might say “trounced”) its peers during that inaugural year.

Our conference call with Andrew will be Tuesday, February 19, from 7:00 - 8:00 EST. Just click REGISTER and you'll take been to the Chorus Call website where you'll register and receive a toll-free number and a PIN. As before, we'll try to divide the call in thirds: in the first third, Andrew will talk us through the fund's genesis, universe and strategy. In the middle third, I'll ask a handful of questions - some suggested by folks on the Observer's discussion board. For the final third, we'll open the lines to your questions.

As he reflected upon what would be most useful to you, Andrew highlighted two main topics as the focus of his opening statement:

1. What prompted the decision to launch the Seafarer Fund, and the firm behind it?

o External catalyst: structural change in China, and the implications for its growth
o Internal catalyst: an ambition to map a tested strategy onto a new set of markets, and to build a lasting firm to support that strategy

2. What is Seafarer's investment approach, and how does it differ from that of other emerging market funds?

o Bottom-up investment research: what it means to research individual companies, on the ground
o Bottom-up portfolio construction: a concentrated portfolio, comprised of individually selected securities, versus a top-down blend of asset classes or strategic "sleeves"
o Why it's important to pair current income with growth when investing in developing countries

So it's Tuesday, February 19, from 7:00 - 8:00 EST. Just click REGISTER. I'm really looking forward to the conversation and hope that you'll join us


  • Cool! Will be watching with interest.. so far he's made us $1094 that we didn't have before.
  • I wonder how he would compare SIGIX and MAPIX in terms of tax efficiency? For example, MAPIX is a wonderful fund, but it is not very tax efficient, so I prefer to invest in it in my IRA. Is SIGIX better suited for IRA or 401k (by construction as a growth and income fund), or it is going to be more tax efficient than MAPIX?
  • Reply to @andrei: Second the motion; good question. So far the Seafarer distributions don't amount to much, but the strategy makes it sound like they could be more significant than they have been.
  • Good question. It's on the list, but I'd be perfectly happy to defer so that one of you might raise the question.

  • Reply to @David_Snowball: That'd be Andrei's call, given that it's his idea.
  • I hope we'll be able to access an audio file afterwards, as was done with MAINX? Thanks a million.
  • Hi David, one question I have is as follows: if I invest in SFGIX, would I need to invest in another Emerging Market or frontier market fund? I guess from your note above the answer is no since it is not limited to Asia (i.e. it contains Latin America and emerging europe). ET
  • Reply to @MaxBialystock: Hi, Max. Yep, we're working on "comprehensive pages" for every fund where we do a call: mp3 of the call, mp3 of the profile, updated profile, link to the latest factsheet and to the Navigator. Haven't seen a lot of use of them yet, so I'll likely highlight them in the March essay. Take care, David

  • David:
    Could you please pass my question to fund manager? SFGIX has significant holding in East and South Asia(64% on 12/31/2012). Many countries in this region have export oriented economics. Now Japan has started to devalue its currency, what would be the impacts to different countries in this region and how would the fund to re-position the allocation? Thanks.
  • Reply to @teapot: Sure, I'll be happy to do so. Remember, though, that the call - and the chance to chat with Andrew - is open to you, too.

    Take care!

  • David; Thanks. I don't know if I would be able to listen live. If I do, I might ask another question. So please help raise the question.
  • I registered to the conference call at 7 pm and got the PIN. But i do not have the URL to join the call.Can someone help?
  • Reply to @rmt: Call Dial In Number(s):
    +1 412 902 6515
    1 877 902 6515 (US Toll Free)
  • edited February 2013
    Fantastic! Thanks a lot, David, for making this possible.

    It is interesting that the points of view of various managers on EM can vary so much. One of the best international value funds, OAKIX (Herro), has only 0.24% in EM. OAKEX has 0% in EM. Another top international value fund, ARTKX, also has less than 1% in EM. ARTGX has no money in EM. The managers of FPA international value fund FPIVX have no money in EM. Some time ago Herro had lots of money in EM in OAKIX and OAKEX, so he has no problems with EM in general, but now he believes that EM are overvalued. These are value managers, who should know where the value is. And yet, Andrew Foster says that those who claim that EM are overvalued did not do their research properly. This is quite intriguing!

  • edited February 2013

    I am not sure whether we are comparing apples to apples here. Andrew is an emerging market manager, whereas all of you quoted are predominently international investors with a little in EM. Even at their peak, these managers would invest at around 10-15% EM and that too developed EM countries like South Korea, etc.

    The venerable GMO is predicting highest return for EM even now. Of course, their predictions are for 7 years, not short-term.
  • I know, different people have different perspective - and I have lots of EM and even frontier markets in my own portfolio. The question that we asked was about RELATIVE valuations of EM, and he essentially replied that those who say that EM are overvalued do not know what they are talking about. This statement definitely does not apply to managers of OAKIX and ARTKX, who are among the best in international investing. But of course he may be right in a certain sense: People from Oakmark (and those who graduated from Oakmark and now manage ARTKX and FPIVX) have tendency to buy only the companies that they deeply understand. And understanding EM may require a different set of skills. For example, ARTIX has 9% in EM - but it is a growth fund.
  • Reply to @andrei: Hi, andrei. Andrew and I sort of continued the conversation after the call was over. Here's what I think I heard:

    1. e.m. valuations are not as attractive as they were back in May -- share prices are up 30%, economic fundamentals have not improved much at all.

    2. there may well be some screaming bargains in Europe if it doesn't implode.

    3. but there also remain a lot of the sorts of opportunities that he's looking for in the emerging markets -- not small, undiscovered firms that are going to rocket skyward as much as modestly priced firms with the prospects of good but not spectacular growth that they can sustain for the long haul.

    4. finding a lot of those opportunities is harder than you'd think, and they're most likely to be found by folks who have a lot of experience with, and a lot of time on the ground in, these markets.

    So, it might be that the emerging markets aren't currently attractive either to the deep value guys or the dynamic growth guys, but that they offer plenty of opportunities for very reasonable returns for risk-aware investors?

    Just guessing,

  • Reply to @David_Snowball:

    That's basically what I heard too.

    The call was great!

    Remember this post:

    Very good to hear AUM is now at $35M and growing.
  • Reply to @David_Snowball:

    Dear David,

    Thanks a lot again for the wonderful experience which you arranged; we are learning a lot! As for EM, since I am brave/stupid enough to invest in WAFMX, which is growing fast but scares many people, I do agree that value is everywhere, for those who can find it:)

    Best wishes

  • Reply to @andrei: Matthews has a comparable fund in registration, by the way. I'll do the quick profile of both new Matthews funds in the March Funds in Registration.

    Take care,

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