| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.41% | 10.51% | 4.38% |
Supply constraints defined the first half of 2026, from oil shortages sparked by the Iran war to the scramble for AI computing capacity. Semiconductor supply has been especially slow to respond, translating into substantial pricing power for memory chipmakers like Samsung Electronics, SK hynix, and Micron Technology. However, investors increasingly rewarded companies whose earnings growth reflects temporary industry scarcity rather than durable competitive advantages. Hyperscalers significantly underperformed as investors recognized they will eventually have to pass on extraordinary capital spending costs to customers or accept lower returns on capital. The manager questions whether this cycle is different or represents a bubble, noting that AI as a technology does not need to fail for growth expectations embedded in many companies' valuations to fall short. Rather than forecasting the precise trajectory of AI spending, the portfolio focuses on companies with high barriers to entry, differentiated products, and strong bargaining power—such as NVIDIA, TSMC, and ASML—that can benefit across a wide range of outcomes. The manager maintains exposure to software companies like Adobe, Microsoft, and SAP, believing the market overstates AI's long-term disruptive effects on these established players.
Focus on companies with durable competitive advantages and the ability to compound earnings growth across a wide range of AI spending outcomes, rather than those benefiting from temporary supply constraints in cyclical industries.
The manager is cautious about the sustainability of AI-related earnings growth, particularly in cyclical semiconductor businesses. While maintaining exposure to companies with durable competitive advantages like NVIDIA, TSMC, and ASML, the manager is skeptical that current market expectations for memory chipmakers and other cyclical beneficiaries will be met. The focus remains on identifying businesses that can compound earnings growth long after today's supply shortages abate, rather than those benefiting from temporary industry scarcity.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2026 | 2026 Q2 | 005930 KS, 0700.HK, 1299 HK, 300750.SZ, 6326.T, 6758.T, 6861.T, AAPL, ABBV, ACN, ADBE, AME, AMZN, APH, ASML, ATD.TO, ATKR, AVGO, AZN, BKNG, DE, DHR, DPLM.L, EFX, ELV, EPIA.ST, GOOGL, HDFCBANK.NS, HEI, IFX.DE, JNJ, JPM, META, MSFT, NEE, NFLX, NOC, NVDA, NVT, PGR, RGA, ROG SW, RYA.L, SAF.PA, SAP, SGSN.SW, SHEL, SLB, SU.PA, TMO, TSM, V | AI, Competitive Advantage, Data centers, global, Quality, semiconductors, supply constraints, technology | - | Supply constraints drove semiconductor pricing power in Q2 2026, but investors rewarded temporary scarcity over durable competitive advantages. Hyperscalers lagged as extraordinary AI capital spending raised concerns about returns. The manager questions whether current growth expectations will be met, focusing instead on companies like NVIDIA, TSMC, and ASML with structural advantages that can compound earnings across multiple AI spending scenarios. |
| Apr 13 2026 | 2026 Q1 | 0700.HK, ADBE, ASML, BKNG, CME, HDFCBANK.NS, HEI, RYA.L, SAF.PA, SAP.DE, SHEL, SLB, SONY, SU.PA, TSM, TW | aerospace, AI, energy, Geopolitical, infrastructure, Quality, Resilience, technology | - | Harding Loevner's global equity strategy underperformed in Q1 2026 amid Iran conflict driving energy surge and AI disruption weighing on tech. The portfolio emphasizes financial resilience over reactive positioning, adding aerospace aftermarket exposure while maintaining focus on quality companies with competitive advantages positioned for infrastructure modernization and energy transition themes. |
| Jan 20 2026 | 2025 Q4 | 0700.HK, 1299.HK, 2308.TW, 300124.SZ, 300760.SZ, 4519.T, 6758.T, 6861.T, ABBV, ACN, ADBE, ALFA.ST, AME, AMZN, APH, ASML, ATCO-A.ST, ATD.TO, ATKR, AVGO, BKNG, CME, COMP.L, CSGP, D05.SI, DE, DHR, DPLM.L, EFX, ELV, EPI-A.ST, FN, GMAB, GOOGL, HDFCBANK.NS, HEI, HLN.L, HON, JNJ, META, MSFT, NFLX, NOC, NVDA, PGR, ROG.SW, SAP, SGSN.SW, SHEL, SLB, SU.PA, TMO, TSM, TTD, TW, V, VRTX, WMMVY | AI, global, international, semiconductors, technology, value | GOOG | US equity exceptionalism has created dangerous concentration with top 10 stocks at 40% of global markets, heavily dependent on AI capex continuing to surprise upward. International markets trade at half US valuations while providing essential AI infrastructure and diverse growth opportunities. Portfolio balances AI exposure with geographic diversification to capture global winners beyond US mega-caps. |
| Oct 14 2025 | 2025 Q3 | 0700.HK, 1299.HK, 2308.TW, 300760.SZ, 4519.T, 6146.T, 6758.T, 6861.T, ABBV, ACN, ADBE, ALC, ALFA.ST, AME, AMZN, APH, ASML, ATCO-A.ST, ATD.TO, ATKR, AVGO, BKNG, CME, CPG.L, CSGP, D05.SI, DE, DHR, DPLM.L, ELV, EPI-A.ST, GLOB, GMAB, GOOGL, HDB, HEI, HLN.L, HON, JNJ, META, MSFT, NFLX, NOC, NOW, NVDA, PGR, ROG.SW, SAP, SGSN.SW, SHEL, SLB, SNPS, SU.PA, TMO, TSM, TTD, TW, V, VRTX, WMMVY | AI, diversification, global, healthcare, momentum, technology, valuation |
ACN US VRTX US ELV US TMO US GOOGL US TCEHY US |
Harding Loevner's diversified global equity strategy significantly underperformed in Q3 as AI-driven momentum investing reached 70-year highs. The portfolio deliberately avoids chasing momentum stocks, maintaining discipline in valuation and diversification despite near-term headwinds. Management expects their fundamental approach to deliver superior long-term returns as market leadership cycles and excessive AI spending eventually reverses. |
| Jul 16 2025 | 2025 Q2 | 0700.HK, 1299.HK, 300760.SZ, 4519.T, 6146.T, 6758.T, 6861.T, ABBV, ACN, ADBE, ALC, ALFA.ST, AMAT, AME, AMZN, APH, ASML, ATCO-A.ST, ATD.TO, ATKR, AVGO, BBCA.JK, BKNG, CME, CPG.L, CRM, CSGP, D05.SI, DE, DHR, DPLM.L, EPIA.ST, GLOB, GMAB, GOOGL, HDFCBANK.NS, HEI, HLN.L, HON, JNJ, META, MSFT, NFLX, NOC, NOW, NVDA, PGR, ROG.SW, SAP, SGS.SW, SHEL, SLB, SNPS, SU.PA, SY1.DE, TMO, TSM, TTD, TW, V, VRTX, WALMEX.MX | AI, Cloud, Data centers, global, growth, semiconductors, technology |
ADBE BKNG ADBE |
The portfolio capitalizes on AI's transition from potential to reality, with holdings demonstrating real AI applications and measurable business effects. Despite Q2 underperformance due to Health Care headwinds, the manager remains confident in the AI thesis, adding to Adobe and Disco Corp while benefiting from strong performance in Communication Services and semiconductor infrastructure plays. |
| Mar 31 2025 | 2025 Q1 | 002230.SZ, 0700.HK, 1299.HK, 4519.T, 6758.T, 6861.T, ABBV, ACN, ADBE, ALC, ALFA.ST, AMAT, AME, AMZN, APH, ASML, ATCO-A.ST, ATD.TO, ATKR, AVGO, BBCA.JK, BKNG, CME, COMP.L, CRM, CSGP, D05.SI, DE, DHR, DPLM.L, EPI-A.ST, GLOB, GMAB, GOOGL, HDFCBANK.NS, HEI, HLN.L, HON, META, MSFT, NFLX, NOC, NOW, NVDA, ROG.SW, SAP, SGSN.SW, SHEL, SLB, SNPS, SU.PA, SY1.DE, TMO, TSM, TTD, TW, UNH, VRTX, WMMVY | AI, Geopolitical, global, Policy Uncertainty, Quality, semiconductors, technology, Trade Policy | - | Harding Loevner's Global Equity strategy declined 2.12% in Q1 amid heightened US trade policy uncertainty and AI-related volatility. The manager used market disruption to purchase quality companies like ASML and HEICO at attractive prices while trimming expensive positions. The portfolio remains underweight US equities, favoring resilient international businesses positioned to grow despite geopolitical challenges. |
| Dec 31 2024 | 2024 Q4 | 0700.HK, 1299.HK, 4519.T, 6758.T, 6861.T, 9962.T, AAPL, ABBV, ACN, ADBE, ADYEN.AS, ALC, ALFA.ST, AMAT, AMZN, ATCO-A.ST, ATKR, ATU.TO, AVGO, BBCA.JK, BKNG, CME, CRM, CSGP, D05.SI, DE, DHR, DPLM.L, EPI-A.ST, GLOB, GMAB, GOOGL, HDFCBANK.NS, HLN.L, HON, META, MSFT, NFLX, NOC, NOW, NVDA, RGEN, ROG.SW, ROK, SAP, SGSN.SW, SHEL, SLB, SNPS, SU.PA, SY1.DE, TMO, TSM, TW, UNH, VRTX, WMMVY | AI, Data centers, geopolitics, global, growth, semiconductors, technology, Trade Policy | - | Harding Loevner's global equity strategy delivered -0.95% in Q4, matching benchmark performance, with full-year returns of 14.50% trailing the index by 350bp. Strong AI-driven themes continue with data center investment growth exceeding 20%, while semiconductor positioning reflects geopolitical risk management. The manager maintains their bottom-up fundamental approach despite increasing trade policy complexity and regulatory uncertainty in healthcare. |
| Sep 30 2024 | 2024 Q3 | 0700.HK, 1299.HK, ADYEN.AS, AMZN, B3SA3.SA, BBCA.JK, BKNG, CME, CPG.L, GOOGL, HDFCBANK.NS, HLN.L, KER.PA, META, NFLX, PINS, SLB, SONY, TW, WALMEX.MX | AI, China, global, growth, healthcare, momentum, Quality, semiconductors | - | Harding Loevner underperformed in Q3 as momentum-driven markets favored large index stocks they don't own. The team deliberately avoids momentum investing despite recent challenges, focusing on fundamental analysis and quality growth companies. They reduced expensive holdings, particularly in the US, while adding to medtech names during weakness. China stimulus drove late-quarter Asian gains. |
| Jul 18 2024 | 2024 Q2 | 0700.HK, 1299.HK, ABBV, ADYEN.AS, ALC, AMZN, BKNG, CME, COST, DHR, GOOGL, ISRG, KER.PA, META, NFLX, OR.PA, PINS, SLB, SONY, TW | AI, competition, global, growth, innovation, Quality, semiconductors, technology | - | Harding Loevner matched the index despite avoiding NVIDIA, benefiting from semiconductor value chain holdings like ASML and TSMC. The manager emphasizes quality and diversification as essential for navigating innovation-driven competition. AI secular growth is expected to benefit software companies as enterprises adopt generative AI tools, while maintaining focus on companies with sustainable competitive advantages. |
| Apr 15 2024 | 2024 Q1 | 0700.HK, 1398.HK, 2607.HK, 4519.T, 6758.T, AAPL, ABBV, ACN, ADBE, ALC, AMAT, AME, AMZN, ASML, ATCO-A.ST, AVGO, B3SA3.SA, BBCA.JK, BHP, BKNG, CME, COST, CRM, CSCO, CSGP, DE, DHR, GLOB, GMAB, GOOGL, HDB, HON, ISRG, KER.PA, LLY, MELI, META, MSFT, NFLX, NKE, NOC, NOW, NVDA, OR.PA, PINS, RGEN, RIO, ROG.SW, ROK, SAP, SGSN.SW, SLB, SNPS, SU.PA, SY1.DE, TMO, TSLA, TSM, TW, UNH, VRTX | AI, global, growth, Quality, software, technology | - | Harding Loevner sold NVIDIA entirely despite AI optimism, citing valuation concerns and competitive threats. They're pivoting to software companies like Salesforce and new holding Globant that can benefit from AI adoption without hardware dependency. The strategy emphasizes durable competitive advantages over momentum, positioning for AI's second wave of business application deployment rather than infrastructure buildout. |
| Jan 31 2024 | 2023 Q4 | ADBE, ADYEN.AS, AMZN, ASML, AVGO, CRM, GOOGL, ISRG, META, MSFT, NFLX, NOW, NVDA, PINS, SAP, SNPS, SU.PA, VRTX | AI, global, growth, innovation, Quality, semiconductors, software, technology |
AIR FP|ICLR|LIN|MRVL|NOW|TSM MELI|NFLX|ORCL|TCOM|VRTX|YUMC |
Strong Q4 performance driven by AI-focused technology holdings including ServiceNow and semiconductor recovery plays. Manager sees AI infrastructure boom creating long-term productivity gains for quality companies with proprietary data advantages. Maintains diversified approach across 50+ holdings to navigate geopolitical risks while portfolio valuations appear attractive relative to past decade. |
| Sep 30 2023 | 2023 Q3 | 0700.HK, 1299 HK, 2359.HK, 4519.T, 6758.T, 9962.T, AAPL, ABBV, ACN, ADBE, ADYEN.AS, ALC, AMAT, AME, AMZN, ASML, ATCO-A.ST, AVGO, BBCA.JK, CME, COST, CRM, CSGP, DE, DHR, DPLM.L, EL, EPI-A.ST, EW, GMAB, GOOGL, HDFCBANK.NS, HEXAB.ST, HLN.L, HON, ISRG, KER.PA, META, MSFT, NFLX, NKE, NOC, NOW, NVDA, OR.PA, PINS, RGEN, ROG SW, ROK, SAP, SGSN.SW, SLB, SNPS, SPX.L, SU.PA, SY1.DE, TMO, TSM, TW, UNH, VRTX, XP | China, energy, global, healthcare, industrials, Japan, rates, technology | - | Harding Loevner underperformed in Q3 due to European stock selection issues, particularly Adyen and Hexagon. The manager draws parallels between China's current challenges and Japan's lost decade but believes quality companies can find growth independent of macro trends. Portfolio maintains low China exposure while focusing on multinational corporations with strong execution capabilities across dynamic market niches. |
| Mar 3 2023 | 2022 Q4 | AAPL, ALGN, NKE, SIVB | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe letter extensively discusses AI-related capital spending straining semiconductor supply chains and leading to sharp price increases for critical components. Hyperscalers have committed extraordinary sums to buy chips, secure electricity, and assemble equipment needed to operate AI servers, but eventually they will have to pass on costs to customers or accept lower returns on capital. The manager questions whether this cycle is different or if it represents a bubble, noting that AI as a technology does not need to fail for growth expectations embedded in many companies' valuations to fall short. |
Data Centers Semiconductors Cloud GPUs |
Semiconductor CycleMemory chip shortages over the past several months have translated into substantial pricing power for Samsung Electronics, SK hynix, and Micron Technology, with profitability reaching levels that would have seemed implausible just a few years ago. However, the manager notes that memory chipmakers can be extraordinarily profitable when supply is tight but have rarely proven to be long-term compounders. The manager questions whether investors' expectations for memory profits to continue rising through 2027 and 2028 represent remarkable optimism for an industry whose past cyclical downturns few could stomach. |
Memory Semi Equipment Foundries Supply Chain | |
Data CentersSupply constraints extended to power-management semiconductors and general-purpose CPUs, which remain essential for coordinating AI tasks and computing infrastructure broadly. Companies like Amphenol and nVent Electric are positioned to convert demand into attractive long-term returns on capital. Additional constraints are emerging around land, power, water, permitting, and electrical infrastructure, which could challenge growth assumptions currently embedded in parts of the market. |
AI Cloud Infrastructure Power Equipment Grid Upgrade | |
CloudLarge cloud-computing providers (hyperscalers) significantly underperformed in the quarter as investors recognized they will eventually have to pass on extraordinary capital spending costs to customers or accept lower returns on capital for their data center projects. While the largest cloud-computing providers have typically funded growth through internally generated cash flows, increasingly they've turned to debt, equity offerings, and other more convoluted financing structures, which changes the risk profile. |
AI Data Centers Capital Spending | |
EnergyThe oil shortage sparked by the war in Iran led to the closure of the Strait of Hormuz and gasoline price spikes, contributing to higher US inflation through May before easing in subsequent weeks. Energy gave back some first-quarter gains as the US and Iran limped toward a resolution that reopened the Strait of Hormuz. The portfolio maintains exposure through Shell and SLB. |
Oil Geopolitics Inflation | |
ValuationThe manager notes that investors increasingly rewarded companies whose earnings growth is more likely to reflect temporary industry scarcity than durable competitive advantages. Markets seem to be rewarding scarcity of the wrong kind: short-lived bottlenecks in cyclical industries. The manager emphasizes that the more valuable form of scarcity is businesses with durable competitive advantages and the ability to compound earnings growth long after today's shortages abate. |
Quality Competitive Advantage Earnings | |
| 2026 Q1 |
EnergyEnergy sector climbed nearly 34% in the quarter following military action in Iran that lifted oil prices. Brent crude rose more than 60%, its largest monthly gain on record, while West Texas Intermediate crude settled above $100 a barrel for the first time since 2022. The portfolio holds Shell and SLB which benefited from rising oil prices. |
Oil Energy Trading Geopolitical Iran Crude |
AIAI disruption moved beyond software and IT services into other areas of the digital economy, weighing on stocks such as Booking Holdings. The rolling thunder of AI disruption affected various sectors while training and operating advanced models require large, continuous supplies of electricity, tying the AI industry's growth to energy infrastructure availability. |
Data Centers Cloud Semiconductors Energy Infrastructure Disruption | |
AerospaceCommercial aerospace production has struggled to keep pace with steadily growing demand for air travel. The industry has about 5,300 fewer aircraft than previously expected, with order backlog equivalent to about 58% of the industry's active fleet. Companies focused on the aftermarket like Safran and HEICO benefit from these conditions through monopoly-like economics over engine lifecycles. |
Aerospace Components Aftermarket Supply Chain Airlines Defense | |
ResilienceThe portfolio emphasizes building resilience through diversification and holding businesses whose earnings aren't dependent on a narrow set of economic outcomes. Financial strength helps determine which companies can absorb pressures while continuing to grow, with the portfolio's holdings being less leveraged and better capitalized than the benchmark. |
Quality Balance Sheet Diversification Risk Management Competitive Advantage | |
Infrastructure SpendingThe gap between what physical infrastructure exists and what the modern economy needs is apparent in energy. Reliable power infrastructure has become increasingly critical to support the demands of the AI era. Companies like Schneider Electric provide equipment and software needed to build and manage this infrastructure. |
Grid Upgrade Energy Transition Electrical Equipment Power Electronics Automation | |
Private CreditPrivate credit funds have come under increasing scrutiny with two private credit-backed companies declaring bankruptcy last year. Anxiety over AI disruption fueled redemption requests at funds exposed to software companies' debt, prompting some firms including Blue Owl to limit redemptions and reigniting concerns about opacity and illiquidity. |
Credit Stress Liquidity Redemptions Systemic Risk Underwriting | |
| 2025 Q4 |
Defense SpendingCanada announced significant defense spending increases to reach 2% NATO target in 2026 and 5% GDP by 2035. This represents a potential sea change in investment levels with cumulative spending reaching substantial billions over the next decade. |
NATO Military Infrastructure Government |
AIThe AI capital cycle has driven technology sector spending from $100B in 2020 to $400B expected in 2026. This massive investment will lower returns on capital and profitability as infrastructure depreciates over 5-8 years. |
Data Centers Capital Cycle Technology Infrastructure | |
Trade PolicyUS tariffs pushed average rates to levels not seen in over 100 years. Tariffs are now a permanent reality for the global economy, driving countries toward National Capitalism policies. |
Tariffs Protectionism Global Trade | |
Energy TransitionFederal-Alberta MOU aims to increase oil and gas production while reaching carbon neutrality by 2050. Focus on reducing regulatory overlap and achieving 2-year permitting timeframes for energy projects. |
Oil Gas Regulation Carbon | |
Infrastructure SpendingCanada's pivot includes prioritizing key infrastructure investments alongside defense and energy sector reforms. Toromont Industries positioned to benefit from elevated infrastructure spending levels. |
Construction Equipment Investment | |
| 2025 Q3 |
AIAI represents a real secular change reshaping industries but creates broad uncertainty in markets. The impact could be incremental or profoundly disruptive, making historical fundamentals less reliable. Markets reward companies perceived as central to AI buildout while penalizing those that don't fit the narrative. |
Artificial Intelligence Technology Disruption Semiconductors Cloud |
MomentumThe past six months were one of the strongest periods for momentum investing in over 70 years, with high-momentum stocks outperforming low-momentum stocks by 45 percentage points. The portfolio deliberately resists incorporating price momentum as a factor due to weak connection to fundamentals and trading costs. |
Price Momentum Performance Trading Outperformance Concentration | |
HealthcareHealth Care sector benefits from long-term trends including aging populations, innovation in oncology and rare diseases, and projected growth in national health expenditures outpacing GDP. The sector shows signs of recovery from pandemic dislocations with improving hospital finances and stabilizing fundamentals. |
Demographics Innovation Pharmaceuticals Medical Devices Aging | |
| 2025 Q2 |
AIAI models released in 2024 have demonstrated marked improvement in performance against new benchmarks, including major strides in reasoning to solve complex problems. Many companies can now point to real products and applications as well as measurable effects on their businesses. Competition among big tech companies appears to be intensifying as more companies join the race to develop cutting-edge AI systems. |
Machine Learning Data Centers Semiconductors Cloud Automation |
SemiconductorsCutting-edge AI chips have much more intricate structures than traditional semiconductors, requiring more chiplets to be diced and polished with greater precision. The buildout of AI data centers is fueling demand for connectors and other semiconductor components. Companies like Disco Corp benefit from the increasingly complex designs of AI chips. |
AI Chips Foundries Equipment Packaging Memory | |
Data CentersThe aggressive investment by large data-center operators looks less speculative than it once did, with both Microsoft and Amazon's AI revenues reaching multi-billion-dollar levels. The buildout of AI data centers around the world is driving demand for electrical equipment and semiconductor components. |
Cloud Infrastructure AI Infrastructure Power Equipment Cooling Servers | |
CloudCloud infrastructure companies are benefiting from the AI transition, with major cloud providers seeing significant AI revenue growth. The shift toward AI applications is driving increased demand for cloud services and infrastructure. |
SaaS Infrastructure Computing Storage Networking | |
| 2025 Q1 |
Trade PolicyThe letter extensively discusses heightened US policy uncertainty, particularly around trade policy, with early salvos in the new trade war hitting China, then re-targeting Canada, Mexico, and US allies in Europe and Asia. The manager notes that tariffs and policies aimed at forcing US self-sufficiency create business uncertainty and undermine investment appetite. |
Tariffs Self-sufficiency Protectionism Policy uncertainty Trade war |
AIThe portfolio was impacted by volatility triggered by the January release of DeepSeek, a Chinese-developed LLM model claiming similar performance to cutting-edge AI models at a fraction of the cost. This created shockwaves through the semiconductor industry and affected AI-exposed companies globally. |
DeepSeek LLM Semiconductor AI models Technology disruption | |
SemiconductorsThe letter discusses ASML Holdings, the world's sole producer of extreme ultraviolet lithography systems needed for the smallest, most powerful chips required for smartphones, computers, and AI data centers. The company faced volatility due to concerns over restrictions on sales to China and slower-than-expected orders. |
ASML Lithography Chip manufacturing China restrictions Equipment | |
QualityThe manager emphasizes their quality-growth investing approach, focusing on companies with superior profitability and sustainable competitive advantages. They discuss the challenge that great businesses are not secrets and can stay expensive for extended periods, requiring careful timing and valuation discipline. |
Quality-growth Sustainable growth Competitive advantages Valuation discipline Business quality | |
| 2024 Q4 |
AIArtificial intelligence continues to drive significant investment and growth across multiple sectors. The manager discusses the sustained momentum in AI development, with companies like OpenAI, xAI, Anthropic raising billions for infrastructure spending. New large language models have launched showing significant improvements, particularly in creating chains of thought to simulate human reasoning. The runway for model development remains long, suggesting sustainable demand for increasingly powerful hardware. |
Data Centers GPUs Cloud Semiconductors Enterprise Software |
SemiconductorsThe semiconductor industry faces both opportunities and geopolitical risks. NVIDIA maintains its technological lead through next-generation products like the Blackwell server rack system and its CUDA software ecosystem. However, export restrictions to China and competitive threats from custom ASICs create uncertainty. The manager sold ASML due to geopolitical risks and valuation concerns, then later repurchased NVIDIA after industry valuations compressed. |
GPUs Memory Semi Equipment Foundries EDA | |
Trade PolicyThe incoming Trump administration may implement more sophisticated protectionist measures compared to the first term. Companies have already made initial supply chain adjustments, but further trade restrictions could require harder and costlier changes. The manager notes that global trade has held up over the past eight years despite various tariffs and sanctions, but additional restrictions could reignite inflation and create more significant business disruptions. |
Sanctions Industrial Policy Onshoring Inflation | |
Data CentersAI-related demand is driving significant growth in data center infrastructure investment. Capital investment in AI data centers is expected to grow by more than 20% according to Morgan Stanley. This benefits not only chip companies like NVIDIA but also infrastructure providers like Schneider Electric, whose electrical and cooling equipment are complementary to power-intensive GPUs that produce significant heat. |
AI Cloud Power Equipment Electrical Equipment Energy Efficiency | |
| 2024 Q3 |
MomentumThe letter extensively discusses momentum investing challenges, noting that disciplined fundamental investors have been challenged by momentum concentrated in a few large stocks. The manager explains their deliberate resistance to incorporating momentum factors due to trading costs, volatility, and FOMO risks. |
Momentum FOMO Volatility Trading Drawdowns |
AIThe letter discusses AI-related investments and their impact on semiconductor demand. It notes that investors began questioning whether generative AI adoption will justify large outlays for specialized AI chips, and mentions the broader AI ecosystem's influence on market dynamics. |
AI Semiconductors Generative AI Technology Chips | |
SemiconductorsThe manager reduced semiconductor exposure earlier in the year as the sector underperformed. They discuss the end of Moore's Law and the industry's shift toward advanced-packaging technologies, benefiting companies like Applied Materials over traditional lithography-focused firms. |
Semiconductors Moore's Law Packaging Lithography Equipment | |
ChinaChina unveiled a sweeping stimulus package to boost credit availability and stabilize real estate markets. The MSCI China Index surged over 20% in two weeks following the stimulus announcement, with companies having Chinese consumer exposure also rallying. |
China Stimulus Real Estate Consumer Policy | |
| 2024 Q2 |
AIThe race for artificial-intelligence solutions is driving innovation across sectors, with companies like Adobe, OpenAI, and others competing to develop generative AI capabilities. The manager expects software and services businesses to become primary beneficiaries as large companies embrace generative AI. Competition in AI is intense, with new capabilities being unveiled regularly by tech startups and incumbents. |
Generative AI ChatGPT Machine Learning Software Innovation |
SemiconductorsASML's extreme ultraviolet lithography machines and TSMC's next-generation semiconductors are enabling more powerful, energy-efficient chips to meet surging demand for high-performance computing. The semiconductor value chain, including Applied Materials, Broadcom, and TSMC, continues to benefit from AI-driven demand. TSMC plans to advance chip technology from N3 to A16, potentially increasing transistor count from 100 billion to over 1 trillion within a decade. |
EUV Lithography Chip Manufacturing Moore's Law Transistors Foundries | |
InnovationThe manager emphasizes that long-term prosperity relies on innovation, with companies like Intuitive Surgical, Tradeweb, and Alcon pioneering advances in their respective fields. Innovation breeds competition, making quality and diversification vital portfolio characteristics. The firm seeks companies that can deliver sustained high profitability from riding waves of innovation while maintaining competitive advantages. |
R&D Competitive Advantage Technology Growth Disruption | |
QualityThe manager's research process focuses on businesses displaying financial strength, competent management teams, and sustainable competitive advantages. Quality companies characterized by lower leverage and more stable returns on capital fared better than lower quality peers. The MSCI All Country World Quality Index outperformed the core index by over 300 basis points. |
Financial Strength ROE Stability Balance Sheet Management Competitive Moats | |
| 2024 Q1 |
AIThe fund sold NVIDIA due to valuation concerns despite believing in AI's transformational impact. They are investing in more reasonably priced software companies positioned to benefit from AI, including Salesforce, Globant, and SAP. The managers see strong prospects for many holdings as AI applications proliferate but emphasize the importance of durable competitive advantages. |
Software Semiconductors Data Cloud Enterprise |
SoftwareSoftware companies offer different types of durable competitive advantages that enable them to profit from AI advances without being priced for perfection. Leading software companies have high switching costs and can incorporate new AI features into existing products. Global IT spending on software is projected to grow 12.7% this year. |
SaaS Enterprise Software CRM ERP Cloud | |
Data CentersSchneider Electric outperformed on growing expectations for its data-center business, as the company is one of only a handful capable of providing power and cooling technology needed to support the AI data boom. The fund sees this as a key infrastructure play for the AI revolution. |
Infrastructure Power Cooling AI Infrastructure | |
| 2023 Q4 |
AIAI infrastructure boom of 2023 will serve as foundation for long-term productivity improvements across global enterprises. Companies will connect data sets to language models with AI agents to automate tasks and serve customers. First-mover advantages in language models will dissipate as open-source models proliferate, making proprietary data sets the source of lasting competitive advantage. |
Artificial Intelligence Language Models Automation Productivity Data |
Semiconductor CycleAnticipation of a bottom in the semiconductor cycle propelled shares of chip and equipment manufacturers. The sector benefited from expectations for lower interest rates and continued investment in AI infrastructure. Companies like Broadcom and ASML saw strong performance as markets priced in recovery. |
Semiconductors Chip Equipment Cycle Bottom Recovery | |
CloudBusinesses increasingly recognize the need for consolidated, cloud-based infrastructure to support evolving business models. ServiceNow has become a preferred vendor for addressing these needs through its simplified platform architecture. The shift toward cloud enables cost efficiency and productivity improvements. |
Cloud Infrastructure Platform Digital Transformation Efficiency | |
Enterprise SoftwareUniversal pursuit of lower costs and higher productivity offers growth potential for software providers able to automate labor-intensive processes. All enterprise software holdings have ability to overlay AI features onto existing offerings and are seeing rising customer demand for such capabilities. |
Software Automation Productivity AI Integration Enterprise | |
| 2023 Q3 |
ChinaChina's economy faces significant challenges from real estate crisis and demographic headwinds, drawing parallels to Japan's lost decade. Despite macro concerns, individual companies can still find growth opportunities independent of broader economic trends, as demonstrated by the manager's experience in Japan. |
China Demographics Real Estate Balance Sheet Recession Japan |
AIThe AI-driven rally in mega-cap technology stocks cooled in Q3 after surging over 40% in the first half. Regulatory actions and growth concerns shifted investor focus from long-term AI optimism to immediate earnings concerns. |
AI Technology Magnificent Seven Regulation | |
RatesCentral banks continued raising rates with the Fed reaching 5.5% and ECB hitting 4.0%. Bond investors reacted negatively to communications suggesting rates might stay high for longer than anticipated to combat stubborn inflation. |
Interest Rates Federal Reserve ECB Inflation | |
EnergyEnergy sector thrived as oil prices jumped to nearly $95 per barrel from $75, driven by Saudi production cuts and record oil demand from strong summer travel and Chinese petrochemical production rebuilding inventories. |
Oil Energy Saudi Arabia Demand |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 20, 2026 | Fund Letters | Peter Baughan | GOOG | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cloud, Margins, Search | Login |
| Oct 14, 2025 | Fund Letters | Peter Baughan | ACN US | Accenture Plc | Information Technology | IT Services | Bull | NYSE | AI, Consulting, growth, innovation, IT services, Partnerships, valuation | Login |
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| Jul 16, 2025 | Fund Letters | Peter Baughan | ADBE | Adobe Inc. | Information Technology | Application Software | Bull | NASDAQ | AI Workflows, Content, Margins, Software | Login |
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| Dec 31, 2023 | Fund Letters | Harding Loevner Global Equity | AIR FP|ICLR|LIN|MRVL|NOW|TSM | ServiceNow | Information Technology | Systems Software | Bull | NYSE | Artificial Intelligence, Cloud computing, Digital transformation, Enterprise software, government contracts, IT services, SaaS, workflow automation | Login |
| Dec 31, 2023 | Fund Letters | Harding Loevner Global Equity | MELI|NFLX|ORCL|TCOM|VRTX|YUMC | Vertex Pharmaceuticals | Health Care | Biotechnology | Bull | NASDAQ | biotechnology, CRISPR, Cystic fibrosis, Drug Discovery, gene therapy, Orphan drugs, rare disease, Sickle Cell Disease, Type 1 Diabetes | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | In IT, surging demand for memory chips enabled South Korea-based Samsung Electronics to raise prices for some products by 80–90%, with first-quarter operating profit nearly tripling from the prior quarter. |
| IFX.DE | Power semiconductor manufacturer Infineon benefited from strong AI-related demand as well as a cyclical recovery in its automotive end markets. The German company significantly raised its revenue and margin projections for the year, with revenue from AI data centers on track to more than double. |
| NVT | Industrials holding nVent was the strongest relative contributor outside of IT. The power equipment and thermal management supplier reported 34% organic sales growth, amid particularly strong demand from customers building data centers. |
| ACN | Beyond chips, IT services holding Accenture reported a disappointing 3% drop in new bookings year over year, a leading indicator of future revenue, lending credence to concern that AI is hurting its consulting business. |
| NFLX | In Communication Services, streaming giant Netflix reported solid growth but left its full-year outlook unchanged, suggesting growth could moderate in the second half and reinforcing investors' concerns related to market saturation and competition from YouTube. |
| ASML | Netherlands-based ASML raised revenue guidance as semiconductor manufacturers increased spending on lithography machines to expand capacity and meet rising demand for chips. ASML occupies a critical position in leading-edge semiconductor production as the monopoly provider of extreme ultraviolet (EUV) lithography equipment. |
| SU.PA | Schneider Electric, a French manufacturer of energy-management and automation equipment, posted 11% year-over-year quarterly sales growth amid robust demand for products to support data centers and electric grids. |
| ATD.TO | Couche-Tard, the world's largest operator of convenience stores and gas stations, posted 20% quarterly revenue growth year over year and nearly doubled earnings, as volatility in fuel markets created opportunities for the company to leverage its scale in fuel procurement and pricing. |
| ADBE | Within the US, Adobe was a key detractor. Alongside its most recent financial results, the software maker lowered its outlook for annual recurring organic revenue from 10% to 8% and announced the departure of its chief financial officer, shortly after its CEO stepped down. The combination of slower growth and management turnover added to investor concerns about AI disrupting its business. |
| 6758.T | In Japan, media and electronics conglomerate Sony faced rising prices for memory chips, a key component of its gaming consoles and image sensors, which may hurt its profit margins. |
| NVDA | NVIDIA's CUDA software platform, which enhances the performance and usability of its GPUs, remains the de facto standard for AI computing, and the company continues to innovate at an extraordinary pace. |
| TSM | TSMC's leadership in cutting-edge semiconductor manufacturing has yet to be challenged. |
| APH | Among electrical suppliers, Amphenol and nVent Electric are examples of businesses whose competitive positions should allow them to convert demand into attractive long-term returns on capital. |
| MSFT | We have also maintained exposure to software companies, with a portfolio weight that's roughly in line with the MSCI All Country World Index. These holdings have hurt our relative performance as investors worry AI will reduce pricing power, slow user growth, and reshape industry competition. However, the market appears to be overstating the long-term effects of AI on some established software players. The ones we own—including Adobe, Microsoft, and SAP—provide critical services that would be costly and disruptive for customers to replace, and they are likely to retain far more of their long-term value than current valuations imply. |
| SAP | We have also maintained exposure to software companies, with a portfolio weight that's roughly in line with the MSCI All Country World Index. These holdings have hurt our relative performance as investors worry AI will reduce pricing power, slow user growth, and reshape industry competition. However, the market appears to be overstating the long-term effects of AI on some established software players. The ones we own—including Adobe, Microsoft, and SAP—provide critical services that would be costly and disruptive for customers to replace, and they are likely to retain far more of their long-term value than current valuations imply. |
| 1299.HK | Pacific ex Japan underperformed, particularly Hong Kong, where life insurer AIA Group was weighed down by concerns over stricter Chinese regulations aimed at keeping capital within China. |
| GOOGL | Except for Alphabet, hyperscalers lagged as investors weighed the ramifications of extraordinary capital spending. |
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