| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.72% | 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 |
International equities provide diversified AI exposure through global supply chain at attractive valuations versus concentrated US bets. Portfolio increased EM weight to 30% on compressed valuations, holds key AI enablers like TSMC and Samsung Electronics, and added defense exposure. Strategy offers participation in AI buildout with less single-factor risk and broader growth opportunities beyond mega-cap concentration. |
| Oct 14 2025 | 2025 Q3 | 005930.KS, 2308.TW, 2413.T, 4519.T, 4684.T, 6301.T, 7741.T, 9984.T, AIA, ALC.SW, ALV.DE, ASML, BBVA, BHP.AX, CATL, D05.SI, NESN.SW, NICE, SE, TSM | AI, China, financials, growth, international, Quality, semiconductors, valuation | - | International equity strategy trails benchmark as quality bias proves costly in market favoring lower-quality stocks. Despite headwinds, manager maintains conviction in quality approach while adding attractively valued growth names like CATL and Sea Limited. Portfolio benefits from AI semiconductor demand and financial sector strength, though maintains defensive positioning ahead of potential economic uncertainty. |
| Jul 16 2025 | 2025 Q2 | 002352.SZ, 005930.KS, 0669.HK, 0700.HK, 1299.HK, 2057.HK, 2308.TW, 2318.HK, 2330.TW, 300760.SZ, 4507.T, 4519.T, 4684.T, 6146.T, 6301.T, 6383.T, 6690.HK, 6758.T, 6861.T, 6869.T, 8113.T, ADYEN.AS, AI.PA, ALC, ALFA.ST, ALV.DE, ASML, ASSA-B.ST, ATCO-A.ST, ATD.TO, BAP, BBVA, BHP, CNR, COLOB.CO, D05.SI, DSY.PA, EPI-A.ST, FMX, GFNORTEO.MX, GMAB, HDB, HLN.L, LIN, MELI, MFC, NESN.SW, NTES, NVS, NZYM-B.CO, OR.PA, RIO, ROG.SW, RYA.L, SAF.PA, SAP, SEB-A.ST, SHEL, SOON.SW, SU.PA, SY1.DE, TLKM | aerospace, AI, defense, Europe, Health Care, international | - | International Equity underperformed due to health care policy headwinds despite strong sector fundamentals. AI-driven semiconductor demand boosted tech holdings while new aerospace positions in Safran and Ryanair capitalize on commercial aviation recovery. The fund maintains conviction in quality companies with durable advantages, expecting health care uncertainty to prove transitory as in past cycles. |
| Mar 31 2025 | 2025 Q1 | 005930.KS, 1299.HK, 6146.T, 6367.T, AI.PA, ALV.DE, ASML, BBVA, D05.SI, HDFCBANK.NS, LIN, MELI, MFC.TO, NESN.SW, OR.PA, ROG.SW, SHEL, SNE, SU.PA, TSM | AI, international, Policy Uncertainty, semiconductors, tariffs, Trade Policy | - | International equity strategy navigates US policy uncertainty by focusing on resilient companies outside America's volatile policy environment. Added semiconductor equipment maker ASML after sharp decline, seeing opportunity in more realistic growth expectations. Portfolio positioned to benefit from international diversification as trade tensions create opportunities in non-US markets trading at attractive valuations. |
| Dec 31 2024 | 2024 Q4 | 005930.KS, 6146.T, AAPL, ABEV, ADYEN.AS, AMZN, ASML, ATD.TO, FMSQY, GMAB, GOOGL, LVMUY, MELI, META, MSFT, NESN.SW, NVDA, NVO, OR.PA, TSLA, TSM | AI, Consumer Staples, growth, Health Care, international, Quality, semiconductors, Trade Policy | - | Harding Loevner's international equity strategy underperformed in 2024 due to sector rotation and specific holdings challenges, but maintains focus on quality growth companies. The team added semiconductor equipment leader Disco Corp and forecasts 11% portfolio earnings growth over five years. Key risks include US policy uncertainty under Trump administration, particularly healthcare and trade policies affecting international companies. |
| Sep 30 2024 | 2024 Q3 | 005930.KS, 1398.HK, 4507.T, 4519.T, 6758.T, 6869.T, 7974.T, ADYEN.AS, ALC.SW, ALV.DE, BNTX, COLOB.CO, HDB, HLN.L, MELI, NESN.SW, OR.PA, ROG.SW, SHEL.L, TSMC | China, Europe, financials, healthcare, international, Japan, momentum | - | Harding Loevner outperformed in Q3 with strong Health Care and Japanese holdings, but continues to trail year-to-date due to momentum headwinds. The manager maintains disciplined fundamental approach despite pressure from momentum investing, executing selective portfolio changes including consolidating Indian banks and exiting BioNTech. China stimulus and Fed rate cuts drove market gains. |
| Jul 18 2024 | 2024 Q2 | 700.HK, ALV.DE, ASML, BAP, BBVA, BHP.AX, D05.SI, GFNORTEO.MX, HDFC.NS, ICICIBANK.NS, IFX.DE, LIN, NESN.SW, NVDA, NVO, OR.PA, RIO, SAP.DE, SHEL, TSM | AI, Banking, emerging markets, international, M&A, Political Risk, semiconductors, technology | - | International equity strategy underperformed on Latin American exposure and Health Care stock selection, partially offset by AI semiconductor gains led by TSMC. Manager remains cautious on rising M&A activity while opportunistically adding Mexican bank GF Banorte post-election volatility. Strategy maintains emerging markets financial focus, benefiting from low credit penetration despite heightened political risks. |
| Apr 15 2024 | 2024 Q1 | 005930.KS, 0700.HK, ADYEN.AS, ALV.DE, ASML, BBVA, BHP, BNTX, D05.SI, HDB, IFX.DE, MELI, NESN.SW, OR.PA, ROG.SW, SAP, SHEL, SONY, SU.PA, TSM | AI, diversification, growth, international, Japan, Quality, semiconductors, technology | - | Harding Loevner's International Equity strategy lagged in Q1 2024, primarily due to Japan's preference for cheap stocks over quality holdings. The fund maintains significant AI exposure through semiconductor leaders TSMC and Samsung while using Consumer Staples for diversification. Despite near-term cyclical headwinds, the manager sees long-term growth potential from AI-driven semiconductor demand. |
| Jan 31 2024 | 2023 Q4 | 005930.KS, 1810.HK, 4507.T, 4519.T, 6301.T, 6383.T, 8306.T, ADYEY, ALFVY, ATD, ATLKY, BAC, BBVA, BHP, D05.SI, DASTY, ENNEF, FMX, IFX.DE, KRYAY, LOGI, MFC, NZYMF, OR.PA, PNGAY, RIO, SAP, SBGSY, SYSMF, TSM | emerging markets, Europe, financials, growth, industrials, international, Quality, technology | - | Harding Loevner's quality-focused international strategy matched benchmark returns in 2023, with low-excitement businesses providing stability against growth stock volatility. European industrials and payment processor Adyen led performance. Despite three years of underperformance, the manager maintains emerging markets exposure citing attractive valuations and diversification benefits. The strategy emphasizes predictable profitability over exciting growth stories. |
| Mar 3 2023 | 2022 Q4 | 7TB GR, 80TE LN, CIN GR, EPAM, GLOB, RJHI AB | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AILarge-cap technology stocks led for much of the year but weakened into year-end, with more speculative names under pressure. Technology stocks benefited from macro-thematic measures and sentiment insights. |
Technology Large Cap Semiconductors |
RatesFederal Reserve cut interest rates twice in a dovish manner, which steepened yield curves and eased credit conditions. This benefited the financials sector as leadership broadened. |
Federal Reserve Interest Rates Financials | |
ValueThere was a rotation of style leadership as value fared well and momentum moderated after strong year-to-date returns. Market leadership broadened beyond concentrated technology names. |
Style Rotation Leadership Momentum | |
| 2025 Q3 |
QualityThe fund maintains a persistent tilt toward higher-quality companies as a hedge against economic downturns. However, high-quality stocks have dramatically underperformed, with the top third returning 17% versus 37% for the bottom third year-to-date. This quality bias explains essentially all relative performance shortfall this year. |
Quality Defensive Downside Protection Competitive Advantages ROE |
AIArtificial intelligence is driving strong demand for semiconductor equipment and data center infrastructure. Portfolio companies like Delta Electronics, TSMC, and ASML are benefiting from hyperscaler demand for AI equipment, with Delta Electronics nearly doubling on surging data center power equipment demand. |
AI Semiconductors Data Centers Hyperscalers Equipment | |
SemiconductorsThe semiconductor sector has fallen from peak valuations, creating opportunities with more achievable growth expectations. The fund added Lasertec, a leader in photomask inspection equipment enabling advanced chip manufacturing, as semiconductor stocks now discount more realistic growth forecasts. |
Semiconductors Foundries Equipment Memory Valuation | |
GrowthThe fund is increasingly bullish toward growth stocks after their valuation reset since 2021. Recent additions include CATL and Sea Limited, companies that peaked in 2021 but have since become bigger, stronger businesses at more reasonable valuations, supporting the portfolio's elevated growth profile. |
Growth Valuation EPS Growth Revenue Growth Reset | |
FinancialsFinancial sector strength reflects rehabilitation of bank profits in a higher-for-longer interest rate environment. European banks are projected to see continued profit expansion through 2027 as rate hedges roll off and lending margins remain wide, though the fund maintains below-index weight due to quality concerns. |
Financials Banks Interest Rates Lending Margins Europe | |
ChinaChina was the best-performing major market, overcoming tariff and trade uncertainty fears. Renewed enthusiasm for Chinese technology stocks like Alibaba and Tencent, which demonstrated continuing AI investment capabilities, helped buoy the market despite ongoing trade tensions. |
China Trade Technology AI Investment Tariffs | |
| 2025 Q2 |
Health CareHealth care equities have underperformed despite strong fundamentals due to political and regulatory uncertainty in the US and beyond. Policy risks include drug pricing reforms, Medicaid funding cuts, and reduced NIH funding. However, the sector's structural advantages remain intact with continued innovation like GLP-1 therapies. |
Pharmaceuticals Biotechnology Drug Pricing Regulatory Risk Innovation |
Defense SpendingEuropean defense spending is surging due to geopolitical tensions and NATO commitments to raise defense spending to 5% of GDP by 2035. However, many European defense companies face profitability challenges due to government ownership and powerful buyers. The fund favors aerospace-focused companies over pure defense plays. |
European Defense NATO Aerospace Government Contracts Geopolitical Risk | |
AIAI-related companies in IT and Communication Services sectors surged during the quarter. Semiconductor equipment suppliers and chip manufacturers benefited from sustained AI demand from hyperscalers. The fund holds positions in TSMC, ASML, and Disco Corp which gained from AI-driven demand. |
Semiconductors Data Centers Hyperscalers Chip Equipment Technology | |
TravelCommercial aerospace is recovering with global air passenger volumes finally topping 2019 levels. Secular growth is expected to resume with 3.6-4.2% annual growth forecasted through 2044, driven by global economic growth and expanding middle class. The fund invested in Safran and Ryanair to capitalize on this trend. |
Airlines Aerospace Commercial Aviation Recovery Growth | |
| 2025 Q1 |
Trade PolicyThe Trump administration has implemented heightened US policy uncertainty with tariffs expanding beyond China to include Canada, Mexico, and European allies. This creates business uncertainty and undermines investment confidence as companies become less willing to commit capital when rules become increasingly arbitrary. |
Tariffs Policy Uncertainty Investment Business |
SemiconductorsThe semiconductor sector has fallen from its July 2024 peak due to concerns about AI-driven growth pace and geographical tensions including tariffs. The manager purchased ASML after its 30% decline, seeing opportunity in more achievable growth expectations and anticipating mid-teens earnings growth over five years. |
AI Equipment Manufacturing Growth Valuation | |
AIAI developments including China's DeepSeek model triggered semiconductor selling as investors feared less computationally intensive AI could reduce demand for advanced semiconductors. The manager views this as creating opportunities in semiconductor stocks now discounting more achievable growth expectations. |
Technology Computing Demand Innovation Disruption | |
| 2024 Q4 |
AIAI continues to drive growth in semiconductor equipment and chip manufacturing. Companies like TSMC and Disco Corp are positioned to benefit from increasing demand for AI chips requiring more complex die processing and advanced semiconductor manufacturing. |
Semiconductors Chips Manufacturing Equipment Processing |
SemiconductorsThe semiconductor sector faces both opportunities and challenges, with TSMC benefiting from AI chip demand while Samsung Electronics struggles with high bandwidth memory chip contracts. Equipment makers like Disco Corp are seeing growth from increasing die production volumes. |
TSMC Equipment Memory Processing Manufacturing | |
E-commerceMercadoLibre stands out as Latin America's dominant e-commerce platform, transitioning from poor profitability to earning nearly $1 billion in net profit. The company is expected to benefit from rising e-commerce penetration and market share gains. |
Platform Latin America Fintech Growth Market Share | |
Trade PolicyTrump's proposed tariffs and trade policies create uncertainty for international companies with US operations. The manager notes potential disruption to cross-border supply chains and unintended consequences for industries the administration seeks to protect. |
Tariffs Supply Chains Policy Uncertainty Cross-border | |
| 2024 Q3 |
MomentumThe letter extensively discusses momentum investing as a factor that has challenged fundamental investors over the past 18 months. The manager explains their deliberate resistance to incorporating momentum into their investment process, citing concerns about trading costs, volatility, and lack of fundamental basis. They note that momentum concentrated in large market cap stocks has created FOMO-driven dynamics. |
Factor investing Price momentum FOMO Trading costs Behavioral finance |
AIThe manager discusses AI as part of the broader momentum phenomenon, specifically mentioning the fever for AI-related semiconductor stocks. They reference NVIDIA and the broader Artificial Intelligence ecosystem residing primarily within the IT sector as examples of transformative changes that can drive sustained share price appreciation. |
NVIDIA Semiconductors Technology transformation IT sector | |
ChinaChina features prominently with discussion of the sweeping stimulus package unveiled toward the end of the quarter, including measures to reduce borrowing costs, stabilize real estate markets, and encourage share buybacks. The manager notes the resulting 20% surge in Chinese markets and discusses their portfolio's exposure to Chinese companies and consumers. |
Stimulus Real estate Share buybacks Market surge Consumer exposure | |
| 2024 Q2 |
AIAI beneficiaries like semiconductors and semiconductor equipment surged by double digits, with TSMC continuing to soar on sustained demand for AI-related chips for NVIDIA and others. Returns within IT were bifurcated as direct AI beneficiaries outperformed while software & services fell. |
Semiconductors TSMC NVIDIA Chips |
Biopharma M&AMerger and acquisition activity has been increasing globally, rebounding from a ten-year low in 2023. The manager maintains a cautious stance toward acquisitions, noting that historically most mergers fail to boost operating profits and face significant integration challenges. |
Mergers Acquisitions Integration Value Creation | |
Emerging MarketsEmerging Markets rose the most this quarter, led by Taiwan due to TSMC gains and Indian stocks recovering to new highs. Chinese markets rebounded 7% while South Africa's coalition government was viewed positively, though Brazil and Mexico fell significantly on political concerns. |
Taiwan India China Political Risk | |
| 2024 Q1 |
AIThe fund has significant portfolio-level exposure to AI growth through a diverse set of fundamentally strong companies. AI beneficiaries fall into two categories: companies providing AI-enhanced goods and services, and companies developing underlying AI technology including semiconductor manufacturers and infrastructure providers. |
Semiconductors Data Centers Cloud GPUs Infrastructure |
SemiconductorsThe portfolio maintains substantial semiconductor investments led by TSMC and Samsung Electronics. The manager expects AI-specific chips to drive incremental $400B in annual semiconductor sales between 2027-2030, though acknowledges the industry's cyclical nature and historical volatility. |
TSMC Memory Foundries Manufacturing Cyclical | |
Consumer StaplesThe fund uses Consumer Staples as a diversification tool to mitigate semiconductor cyclicality. These companies provide portfolio stability through consistent profitability and lower volatility, creating rebalancing opportunities during market downturns when investors seek safety. |
Diversification Stability Defensive Rebalancing Quality | |
| 2023 Q4 |
QualityThe manager emphasizes their focus on high-quality companies that provide stability against market turbulence. They seek quality combined with high growth, noting that quality companies often generate higher risk-adjusted returns due to more predictable profitability and earnings growth. |
Stability Predictable Premium Defensive Consistent |
AIThe letter discusses the emergence of artificial intelligence into public consciousness, particularly through ChatGPT and generative AI models. The manager references the productivity J-curve and hype cycle, suggesting current AI enthusiasm may be entering inflated expectations phase. |
ChatGPT Productivity Innovation Technology Automation | |
Emerging marketsDespite three years of underperformance, the manager believes there are compelling reasons to include EM investments, citing broader investment options, diversification benefits, and potential for rapidly growing businesses within expanding economies. They note current attractive valuations relative to developed markets. |
Diversification Valuations Growth Volatility Underweight |
| 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. |
| 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 | |||
