| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.7% | 4.2% | 27.6% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 27.6% | 1.8% | 15.5% | -20.1% | 8.7% | 20.8% |
Harding Loevner's International Equity strategy delivered 28.4% gross returns in 2025, underperforming the 33.1% benchmark return due to emphasis on higher-quality companies versus the cheapest cohort. The portfolio increased emerging markets exposure to 30%, the highest ever, capitalizing on compressed valuations in fundamentally sound companies. The core thesis centers on international markets providing diversified exposure to AI infrastructure through the global supply chain of foundries, memory producers, and equipment suppliers, rather than concentrated bets on US hyperscalers. Key holdings include TSMC, Samsung Electronics, ASML, and power management providers like Delta Electronics and Schneider Electric. The manager added defense exposure through BAE Systems and increased growth positioning by reducing materials exposure. Portfolio turnover reached 24%, nearly double the five-year average, as the team capitalized on market dislocations. Looking forward, international equities offer participation in AI buildout through varied business models at attractive valuations, with broader diversification beyond single-factor concentration risks facing US markets.
International markets offer superior diversification and valuation opportunities compared to concentrated US AI bets, with meaningful exposure to the global AI supply chain through foundries, equipment suppliers, and infrastructure providers at more attractive starting valuations.
If AI delivers on its promise, global winners will continue to extend well beyond US mega-caps. And if the capex cycle proves bumpier than the market expects, diversification across the chain and across regions may matter more than it has in years. International equities offer participation in the same structural buildout through a greater variety of business models, often at more attractive valuations, with less single-factor concentration, and with a wider range of non-AI sources of growth.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 20 2026 | 2025 Q4 | 005930.KS, 0700.HK, 1299.HK, 1398.HK, 2330.TW, 6758.T, ALC.SW, ALFA.ST, ALV.DE, ASML, ATCO-A.ST, BBVA, D05.SI, MELI, NTES, NVO, NVS, ROG.SW, SE, SU.PA | AI, defense, emerging markets, international, semiconductors, technology, Valuations |
035420 KS BA LN |
AI represents a capital-expenditure regime with two distinct camps: demand-side hyperscalers investing in compute capacity, and supply-side physical enablers spanning chip foundries, memory makers, and… |
| Oct 14 2025 | 2025 Q3 | 2413 JP, CATL, NESN SW, TSM | financials, growth, healthcare, Quality, technology | - | High-quality stocks underperformed as markets favored lower-quality financials amid higher-for-longer rates. The fund maintained its bias toward durable, well-capitalized companies, viewing recent value rallies as… |
| Jul 16 2025 | 2025 Q2 | - | demographics, Health Care, innovation, regulation risk, valuation | - | The commentary highlights health care as a sector facing short-term political and regulatory uncertainty despite strong long-term fundamentals. Management argues that valuation compression has created… |
| Mar 31 2025 | 2025 Q1 | 6758 JP, ASML NA, HLN, SHEL, TSM | - | - | - |
| Dec 31 2024 | 2024 Q4 | 6146 JP, ADYEN NA, GMAB, OR FP, TSM | - | - | - |
| Sep 30 2024 | 2024 Q3 | 6690 HK, ATD CN, HDB, MELI, NESN SW, NVO, OR FP, SU FP, TSM | - | - | - |
| Jul 18 2024 | 2024 Q2 | 4519 JP, 6758 JP, ASAZY, BAP, BBVA, BHP, DBS SP, HDFCB IN, IBN, TSM | - | - | - |
| Apr 15 2024 | 2024 Q1 | 002050 CH, 005930 KS, 8301 JP, DSY GR, IFX GR, SONY, TSM | - | - | - |
| Jan 31 2024 | 2023 Q4 | 005930 KS, 2688 HK, 4519 JP, 601012 CH, ADYEN NA, NZM2 GR, PZXB GR, RO SW, TSM | - | - | - |
| Mar 3 2023 | 2022 Q4 | 7TB GR, 80TE LN, CIN GR, EPAM, GLOB, RJHI AB | - | - | - |
| 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 |
DefenseDefense positioning includes exposure to missiles, air defense and space through companies like Lockheed Martin, supported by large order backlogs providing strong long-term visibility amid heightened geopolitical tensions. |
Military Aerospace Geopolitical Security Infrastructure | |
E-commerceAlibaba Group was the top detractor despite its core E-commerce business continuing to perform well and Cloud revenue growth accelerating. The company was negatively impacted by significant spending on subsidies to grow their Quick Commerce business, though losses are expected to be reduced over time. |
Quick Commerce Cloud China Technology AI | |
Emerging MarketsEM exposure increased to roughly 30% of the portfolio, the largest weight ever, driven by compressed valuations and opportunities in companies like CATL, Delta Electronics, Naver, and Tencent. The manager sees attractive risk-reward profiles in EM companies where fundamentals remain robust despite underperformance. |
China South Korea Taiwan Value Growth | |
SemiconductorsTaiwan Semiconductor represents the dominant manufacturer for leading fabless chip designers including NVIDIA, Apple, and Broadcom. The global arms race to develop artificial general intelligence will support multiple years of robust growth for foundries with leading-edge capabilities. |
Foundries Advanced Process AI Chips Manufacturing Technology Leadership | |
| 2025 Q3 |
FinancialsEuropean banks have been rehabilitated after years in purgatory, with returns of 77% in 2025. Return on equity has normalized above 12% following exit from ultra-low rates, while capital positions have been rebuilt. However, supportive factors are well-appreciated by markets, reflected in significant valuation re-rating. |
Banks Return On Equity Interest Rates Capital Valuations |
Growth Stocks |
||
Quality Investing |
||
| 2025 Q2 |
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 |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 20, 2026 | Fund Letters | Maria Lernerman | 035420 KS | Naver Corporation | Communication Services | Interactive Media & Services | Bull | New York Stock Exchange | advertising, AI, ecommerce, monetization, valuation | Login |
| Jan 20, 2026 | Fund Letters | Maria Lernerman | BA LN | BAE Systems plc | Industrials | Aerospace & Defense | Bull | New York Stock Exchange | backlog, Defense, Europe, Geopolitics, Security | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Samsung was the largest beneficiary as the shortage in its key memory products, particularly DRAM, has led to substantial price increases. The shares have re-rated to around 1.7x price-to-book, while still trading at less than 10x forward earnings. Given this re-rating, we have been reducing the position during the quarter. |
| 0700.HK | Tencent was mentioned as one of the largest contributors in 2025. |
| 1299.HK | Proceeds were deployed to three Asian companies: 1) Alibaba Group Holding is the largest Chinese e-commerce and cloud company, which has stabilized its e-commerce business and invested in the growing cloud business; 2) Asian insurance company AIA Group Limited is leveraging growing demand from Hong Kong, China and other Asian countries; and 3) Chinese company Ping An Insurance may benefiting from the structural demand for health and protection products given the aging population and limited coverage of national insurance. |
| 2330.TW | Taiwan's TSMC fabricates it. TSMC, the world's largest semiconductor foundry |
| 6758.T | Sony |
| ALFA.ST | We also doubled down on existing Portfolio companies that had sold off by more than any change in the underlying business justified (e.g., Roche Holdings AG, Alfa Laval AG). |
| ASML | ASML is the largest constituent of the MSCI EAFE Index as the critical toolmaker in the AI ecosystem. |
| ATCO-A.ST | Atlas Copco supplies industrial products and components, such as vacuum valves, air compressors, filters and pumps, into a wide variety of end markets. We expect the businesses we own to be commercially ambitious and look to grow their revenue faster than the markets they serve – even more so when those markets are challenged. We sold Atlas Copco in May, having become disappointed with its lack of observable self-help initiatives. |
| D05.SI | We have followed the company for many years, but aside from occasional trades, we had not felt compelled to build a meaningful position in a business—even one that is an industry leader—whose business is traditionally mainly asset-based lending and whose earnings are still meaningfully influenced by interest-rate cycles. Over the previous two years, we have been increasingly impressed by the extent to which DBS has converted scale and technology into a structural economic moat. |
| MELI | E-commerce was another drag. Sea Limited and MercadoLibre struggled as investors became more cautious on discretionary spending and less willing to pay up for growth. |
| NTES | NetEase |
| NVO | Novo Nordisk shares were a drag on the portfolio due to increased competition in the weight-loss drug market, resulting in reduced sales and profit growth outlooks. In December, the company announced FDA approval for its oral Wegovy pill, which could alter investor perception positively. |
| NVS | During the quarter, Chinese online discount retailer Vipshop Holdings Ltd., Canadian auto parts manufacturer Magna International and Swiss pharma Novartis AG were sold as each reached target valuation limits. |
| ROG.SW | Roche contributed positively. We can attribute this both to stabilisation of their core businesses and also encouraging pipeline developments in oncology and obesity treatments. The investment case for these related companies is starting to play out positively, and we see several years of continued pipeline momentum ahead. |
| SE | We also exited Sea Limited due to significant adverse investor sentiment following a worse-than-expected earnings report where a capex announcements on logistic networks and fulfilment led to margin compression. Experience suggests that when companies go through capex cycles, sentiment can remain volatile until investors are satisfied that the expenditure will lead to a bigger and better business. |
| SU.PA | Roughly one third of the portfolio, from Legrand to Schneider to Microsoft, is involved in the AI build-out in some way, from power to cooling to efficiency support. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
