Emerging markets have long been a volatile investment and some people think they may grow more so, due to changing global economies and the proposed policies of president-elect Donald Trump.

To better understand the marketplace, we spoke with Andrew Foster, the founder and chief investment officer at Seafarer Capital Partners, a San Francisco-based boutique firm focused on emerging markets. He is the lead portfolio manager of the Seafarer Overseas Growth and Income Fund and co-manager of the Seafarer Overseas Value Fund. Answers have been edited for length and clarity.

Q. Can you give us your summary of the emerging markets landscape right now?

A. There is investor confusion with the asset class. It was never particularly well-designed in the first place with lots of disparate companies and things lumped together. It was never coherent.

Adding to this is the likely direction of American international economic policy, which could have a lot of people wondering if this segment has any particular relevance to their portfolio.

I’ll focus on the relevance question, which is a tough one. My firm specializes in emerging markets and even here there’s not enough clarity on where (U.S.) policy will go.

It’s not terribly relevant to most investors, who may not have the risk tolerance or necessary horizon timeline. And it should be a small portion of their investment, if they can afford the risk, and not touch for three to five years at a minimum.

There’s been an argument propagated for a while … that investing in a basket of U.S. companies, particularly multinationals, can expose you to emerging markets and thereby an investor’s portfolio can benefit. And that could be an adequate answer for most folks.

Q. So Nike, Coca-Cola, Facebook and the like?

A. I can’t comment on specific stocks but those sort.

I do see U.S. multinationals playing a bigger role than they ever have before. But here’s the thing that is relevant (about emerging market funds), for those investors who can tolerate a much higher risk and a longer-term horizon: I do think that economies of emerging markets are changing. They’ve traditionally been focused on exports, but they are more consumer-dependent now. And while there’s been a focus on consumer and household goods, there is the rise of the service sector.

Health care is a good example of these service sector industries that are not terribly well penetrated by U.S. multinationals. You can trade Coca-Cola across borders but you can’t trade the provision of high-quality health care. Some global firms may crack in but local companies are going to dominate.

The second reason (emerging markets are relevant) is more germane to the current political climate: A lot of investment gains in the U.S. lately have been underpinned by a very strong dollar. I’m not here to question that strength but one of the best hedges, in very careful moderation, is in a basket of foreign income securities.

I would not advocate this as an asset for people looking for explosive growth. That growth rate has been declining over the past five years and I don’t expect that to change in the next five years.

Q. Trump is very pro-strong dollar. What other policies of his will you be keeping a close eye on?

A. The federal interest rate increases. Despite two rate increases, emerging markets currencies are slightly better than against the dollar. Everyone thought it would be this meltdown, but I would suggest it was baked in. They fell before the hikes, and by the time they actually occurred they were already accounted for.

The second thing I’ll be watching for is trade relations. If the administration undertakes some punitive measures, tariffs or other duties, that could change the strength of the dollar.

The third is more subtle. I think the Trump administration has been questioning the wisdom of multilateral institutions and structures, such as the UN, the International Monetary Fund or alliances in Asia. I don’t think it’s wrong to question this, but one of the big benefits of these structures is the acceptance of the dollar as a reserve currency. If their support of these structures is watered down, it will water down the acceptance of the dollar.

Q. Any positives worth noting?

A. Valuations in the emerging markets are attractive and actual profit growth seems to be accelerating from very low levels. 2016 was the first year in five years where there has been substantial, nominal growth.

I’m not saying the growth is off the charts. We have a sick patient who is getting out of bed. Expectations are low. So when the sick patient gets out of bed and starts wheeling themselves around the hall, everyone cheers. We aren’t expecting them to run marathons or speed trials.