| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.3% | 0.4% | 8.5% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 8.5% | -3.3% | 15.0% | -22.1% | 11.5% | 28.1% |
Harding Loevner's Global Small Companies Equity strategy returned 8.54% net in 2025, underperforming the MSCI All Country World Small Cap Index's 20.27% return. The manager attributes underperformance to their quality-growth discipline clashing with market momentum and narrative-driven investing. While speculative stocks like ABL Bio surged over 500%, the portfolio's quality holdings like DiaSorin faced temporary headwinds despite strong fundamentals. The strategy increased Health Care exposure, making it the largest active sector weight due to compelling valuations created by cyclical challenges. Key detractors included IT holdings affected by AI enthusiasm favoring hardware over software, and Financials where several US positions were exited due to tariff-related stress. The manager remains confident that their focus on companies with durable competitive advantages and strong cash flow returns will be rewarded over time, contrasting current market favorites that lack fundamental strength with their portfolio's quality characteristics.
Quality-growth investing focused on financially strong, well-managed companies with durable competitive advantages will outperform over the long run despite short-term underperformance against momentum-driven markets.
The manager expects that companies quietly building value will be rewarded most over the long run, contrasting with market speculation. They remain patient with quality compounders, believing conditions boosting recent winners generally lack clear basis for continuing.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | AAPL, ADBE, AMD, AMZN, AVGO, CRM, CSCO, GOOGL, IBM, INTC, META, MSFT, NFLX, NOW, NVDA, ORCL, PYPL, QCOM, TSLA, TXN | global, healthcare, momentum, Quality, small caps, technology, value |
298380 KS DIA IM 2344 TT |
The manager emphasizes quality-growth investing that demands relentless skepticism toward market narratives and constant scrutiny of company fundamentals. They focus on financially strong, well-managed companies… |
| Oct 19 2025 | 2025 Q3 | 6969 JP, AFX GR, LEHN SW | Artificial Intelligence, gold, Medical Devices, Quality Investing, Recurring Revenue | - | The fund focuses on long-term healthcare growth from equipment and diagnostic suppliers with stable recurring revenues. It explores how AI reshapes IT-services business models, expecting… |
| Jul 17 2025 | 2025 Q2 | 3697 JP, CYBR, ENS, G24 GR, GLOB, MAXF IN | AI Adoption, Competitive Advantage, innovation, productivity, small caps |
GLOB CYBR |
The letter emphasizes AI as a potential equalizer for small companies, enabling productivity gains, new services, and competitive leapfrogging. Management focuses on firms with strong… |
| Mar 31 2025 | 2025 Q1 | 6923 JP, 7747 JP, FPE GR, G24 GR, NEM GR | - | - | - |
| Sep 30 2024 | 2024 Q3 | 2815 JP, ATKR, CWK LN, GWRE, NBIX, SHKL IN, TECN SW | - | - | - |
| Jul 18 2024 | 2024 Q2 | ATKR, BC8 GR, BGEO LN, FIVE, RMV LN, SLP | - | - | - |
| Apr 15 2024 | 2024 Q1 | DAVA, NEM GR, PFV GR, RUI FP, SWAV | - | - | - |
| Jan 31 2024 | 2023 Q4 | 4919 JP, CYBR, KWS LN, MGPI, MISUN MM, NBIX, TOM NO, YOU LN | - | - | - |
| Mar 3 2023 | 2022 Q4 | 0H7S LN, BGEO LN, CYBR, DPH LN, LELA GR, TOM NO, VAYA GR | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
GoldGold returned +65% in dollars in 2025, driven by broadening demand from central banks, professional and retail investors. Central banks now hold 24% of reserves in gold versus 23% in US Treasuries for the first time. Maintained 12% portfolio allocation throughout the year. |
Central Banks Reserves Diversification Demand | |
Momentum2025 was characterized by extreme momentum dynamics with capital flowing into immediate winners while perceived losers saw unprecedented pressure. Market leadership concentrated in lower-quality, speculative, and cyclically sensitive stocks. The momentum trade has been exceptionally profitable short-term but timing the inevitable reversal remains challenging. |
Cyclical Speculation Leadership Volatility Reversal | |
QualityThe company emphasizes investing in businesses with excellent economics, durable competitive advantages, and high-integrity management. This quality focus is evident in concentrated equity holdings and operating business acquisitions. |
Durable Advantages Management Quality Economic Moats Competitive Position | |
| 2025 Q3 |
CommoditiesBull market may be in early stages with most commodities 46% below nominal peaks and 73% below inflation-adjusted highs. Commodity-to-equity ratio near historic lows suggests capital starvation. Current cycle appears only one-third complete compared to historical precedent. |
Cycles Capital Valuation Equities |
HealthcareHealthcare was the strongest relative contributor in the quarter with holdings increasing nearly +16% compared to benchmark returns of roughly +12%. Exact Sciences was acquired for a significant premium by Abbott Laboratories resulting in an +86% return, while other strong performers included Tarsus Pharmaceuticals, Glaukos following approval of a new product, Penumbra, and Repligen driven by strong earnings results. |
M&A Product Approval Earnings Biotech | |
Technology |
||
| 2025 Q2 |
ArtificialIntelligence |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 17, 2025 | Fund Letters | Christopher Mack | GLOB | Globant S.A. | Information Technology | IT Consulting & Other Services | Bull | New York Stock Exchange | AI, cloud, Consulting, Digital, Smallcaps, Subscription | Login |
| Jul 17, 2025 | Fund Letters | Christopher Mack | CYBR | CyberArk Software Ltd. | Information Technology | Systems Software | Bull | NASDAQ | AI, Identity, Privilege, Recurring, Security, Software | Login |
| Jan 20, 2026 | Fund Letters | Christopher Mack | 298380 KS | ABL Bio Inc. | Health Care | Biotechnology | Bear | New York Stock Exchange | Biotech, Clinicaltrials, milestones, Oncology, Speculation | Login |
| Jan 20, 2026 | Fund Letters | Christopher Mack | DIA IM | DiaSorin S.p.A. | Health Care | Health Care Equipment | Bull | Borsa Istanbul | Cfroi, diagnostics, Reagents, Recurringrevenue, Regulation | Login |
| Jan 20, 2026 | Fund Letters | Christopher Mack | 2344 TT | Winbond Electronics Corp. | Information Technology | Semiconductors | Bear | New York Stock Exchange | Cfroi, Cyclicality, DRAM, Pricing, semiconductors | Login |
| TICKER | COMMENTARY |
|---|---|
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| ADBE | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| AMD | AMD was mentioned as an example of businesses that already make money, have shown they can do so through cycles and are priced so that we do not need everything to go right. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| AVGO | The primary contributors to its performance were our exposures to Broadcom |
| CRM | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| CSCO | It took Cisco, the leading provider of internet equipment and briefly the world's most valuable company, a quarter of a century and another technology bubble to regain its peak. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| INTC | even Intel (a frequent punchline for missing cycles) found itself unexpectedly capacity-constrained in data-centre CPUs. |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| NFLX | NFLX was the portfolio's largest detractor in 4Q25 following investor concerns around near-term subscriber growth and rising content spending. While revenue grew approximately 10% year-over-year, management guided to slower net subscriber additions in North America and Europe after recent price increases, and margins were pressured by elevated investment in live sports and international content. |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| NVDA | AI bellwether NVIDIA's very strong set of earnings in late November helped the AI theme re-assert its dominance when investors breathed a sigh of relief following the results. |
| ORCL | Investor enthusiasm for Oracle's stock in calendar year 2025 was initially driven by several multi-billion-dollar contracts it signed with leading AI companies, including OpenAI and Meta. However, in Q4 sentiment for ORCL's growth prospects shifted to skepticism, as investors began to scrutinize the return profile of the substantial capital investments required to support the approximately $500 billion of contracts signed by Oracle. Given the widening range of potential outcomes associated with Oracle's elevated capital needs, we reduced our position in ORCL during Q4. |
| PYPL | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| QCOM | I remember like yesterday when Qualcomm was the top performing stock in 1999 rising a spectacular 2,619%; it then dropped over 85% by 2002. |
| TSLA | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
| TXN | During the quarter, we started a position in Texas Instruments (TXN), a leading semiconductor company. TXN is very well managed with a strategy of investing through the business cycle. The company has a strong balance sheet and earnings history. Its share price was volatile in 2025, peaking at over $200 in July following strong second quarter earnings but declining in November to less than $160 after weaker fourth quarter guidance despite beating third quarter revenue and profits forecasts. The drop in the share price provided a good entry point for this high-quality company and we expect to see a nice cyclical rebound in its business and a much higher stock price over the next few years. |
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