| 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 become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
GoldGold experienced its best annual return since 1979 driven by seemingly insatiable appetite, entering bubble territory. The precious metal drove the Small Resources index to a 45.3% increase in the December half. |
Gold Precious Metals Bubble Resources | |
MomentumThe past two years have rewarded momentum investing, with stocks in the top quintile of trailing nine-month returns generating 91% cumulative returns versus 47% for the S&P 500. This momentum period ranks as the second strongest since 1998, only behind the dot-com bubble era of 1998-1999. |
Momentum Growth Concentration Bubble Outperformance | |
QualityThe portfolio has shifted toward higher quality businesses with better profitability, lower leverage, and less volatile earnings. Quality stocks underperformed significantly in 2025, creating attractive entry points for value investors. The manager maintains price discipline while seeking quality companies trading at discounts to intrinsic value. |
Quality Profitability Leverage Earnings | |
| 2025 Q3 |
CommoditiesHard assets offer protection against monetary inflation as governments attempt to print their way out of decline. Construction of datacentres and infrastructure in booming countries require commodities when mines have suffered from underinvestment. Competition between China and the US for strategic metals underpins the outlook for these resources. |
Gold Silver Copper Uranium Critical Minerals |
HealthcareFund focuses exclusively on healthcare sector with concentrated portfolio of small-cap companies. Investment approach targets special situations within healthcare including spin-offs, asset sales, business model pivots, and new product launches. Portfolio includes pharmaceutical, medical device, biotechnology, and healthcare IT companies. |
Pharmaceuticals Medical Devices Biotechnology Healthcare IT Special Situations | |
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 | The largest 10 companies, by market capitalization, had reached 40.7% of the S&P 500 by the end of 2025, up from roughly 30% at the end of 2021. At the top of this list are Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Meta (META), and Tesla (TSLA). Apple: Market capitalization near $4 trillion. A double requires creating a company larger than the size of Walmart, JPMorgan, and Pfizer combined. |
| ADBE | Later in the quarter we initiated Adobe, a stock we have held before, where we believe AI is more likely to enhance the product suite than disrupt it. |
| 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 | We added to our holdings in Amazon.com Inc. |
| AVGO | Broadcom, a leading semiconductor company and long-term holding, continued to execute well amid strong demand for custom silicon supporting AI workloads. |
| CRM | We trimmed Salesforce Inc. |
| 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 | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| INTC | Intel and AMD are now flagging logic chip supply constraints |
| META | Meta was cited as a larger position that contributed little despite what I thought was positive operating progress, representing opportunity cost in the portfolio. |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| NFLX | Netflix has built a durable economic moat around its vertically-integrated, globally-scaled streaming business. As the first company to establish a global subscription media platform within the $500 billion TV market, Netflix is now reaping the benefits of its early leadership. With more than 300 million members, Netflix enjoys the lowest content cost per subscriber in the industry. |
| 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 | Nvidia sits at the top of the S&P 500 as the designer in the AI ecosystem. |
| 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. |
| PYPL | Digital payments platform PayPal was a detractor in 2025. While the company made real operational progress stabilizing and growing transaction margin dollars, expanding profit margins through improved cost discipline, accelerating FCF generation, and returning substantial capital through buybacks the market remained focused on the lack of further acceleration in Branded checkout volume. |
| 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 | The largest 10 companies, by market capitalization, had reached 40.7% of the S&P 500 by the end of 2025, up from roughly 30% at the end of 2021. At the top of this list are Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Meta (META), and Tesla (TSLA). |
| 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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