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,
David
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
Comments
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.
Take care!
David
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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!
Andrei
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.
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,
David
That's basically what I heard too.
The call was great!
Remember this post:
http://www.mutualfundobserver.com/discussions-3/#/discussion/comment/14389
Very good to hear AUM is now at $35M and growing.
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
Andrei
Take care,
David