| 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 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 |
DefenseThe team initiated a position in Curtiss-Wright, believing the company is entering a period where multiple near-term growth drivers are converging, including rising defense budgets, commercial aerospace production ramps, nuclear power plant life extensions and new builds, and submarine production. |
Defense Budgets Aerospace Nuclear Submarines | |
E-commerceSeveral investments in e-commerce leaders across Asia and Latin America, including MercadoLibre, Sea Limited and Alibaba, faced a more competitive operating environment during the period. As long-term investors, SGA observes that competitive intensity in these markets tends to ebb and flow over shorter time horizons, with market leaders typically emerging from such periods with strengthened strategic positions given inherent network effects. |
Marketplaces Competition Network Effects Asia Latin America | |
Emerging marketsGlobal equities, especially those outside the U.S., powered equity returns. In emerging markets, shares of companies linked to commodities were the strongest performers as commodities rallied. Even after a strong year for international and emerging markets shares, we still see some of the best value in the world in these areas. |
International Commodities Non-US Best Value | |
SemiconductorsRGA initiated a position in Lattice Semiconductor, viewing it as an under-appreciated AI winner with immediate gains and longer-term optionality. Lattice's focus on efficiency and advantages in low-power, small footprint FPGAs position it favorably for AI servers, particularly as the only Post-Quantum Cryptography secure chips on the market. |
FPGAs Security Efficiency AI Infrastructure Programmable | |
| 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 |
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Quality Investing |
||
| 2025 Q2 |
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 |
| 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 | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 0700.HK | Shinya also visited Shenzhen, where Star Magnolia Capital organized an educational visit for our families to Tencent's headquarters, alongside meetings with several promising early-stage companies. |
| 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, TSMC, and Arista Networks are key players in the AI build out supply chain. |
| 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 Volatility: turbulence in our e-commerce portfolio companies, Sea Ltd (Southeast Asia) and MercadoLibre (Latin America), amidst aggressive price wars. |
| NTES | During the quarter, we added to an existing holding in Netease |
| NVO | added a new holding in Novo Nordisk, which had seen its share price decline by two thirds since mid-2024 |
| 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 | Top gainers among the Fund's holdings included Roche (+27%) |
| SE | During the quarter, we initiated a new position in Sea Limited, a Southeast Asian consumer internet company with an integrated ecosystem combining e-commerce, digital payments, and entertainment. Sea has a diversified business model, with its Shopee e-commerce platform, a mobile-centric marketplace that provides integrated payments, logistics infrastructure, and seller services. |
| 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. |
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