| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.1% | 4.9% | 32.9% |
| 2025 |
|---|
| 32.9% |
Harris Associates International Strategy returned 4.93% net in Q4 2025, slightly underperforming the MSCI World ex USA Index return of 5.20%. The portfolio benefited from strong performance in pharmaceuticals, semiconductors, and logistics. Top contributors included Bayer, which saw positive drug trial results and potential Supreme Court hearing on litigation matters; DSV, which accelerated synergy realization from its DB Schenker acquisition; and Samsung Electronics, which recovered strongly in its core semiconductor business. Key detractors were Alibaba Group, affected by Quick Commerce investment spending; CNH Industrial, facing business mix and tariff challenges; and Dassault Systemes, which reported disappointing results. The manager initiated five new positions including AstraZeneca, IMCD, Sanofi, Symrise, and Unilever, taking advantage of attractive valuations. Eight positions were eliminated during the period. The firm maintains conviction in their value investing approach, believing the decade-long paradigm of U.S. growth stock outperformance unraveled in 2025, with European equities fundamentals improving and valuation spreads beginning to narrow in their favor.
Harris Associates employs a value investing strategy focused on international markets, particularly European equities, believing that the decade-long outperformance of U.S. growth stocks was unsustainable and that valuation spreads will continue to narrow in their favor.
The manager remains confident in their value investing approach, believing that the large valuation spread between U.S. growth stocks and international equities will continue to benefit their strategy. They view European equities as the most attractively priced global region with improving fundamentals driving increased investor interest.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 26 2026 | 2025 Q4 | 005930.KS, 6301.T, AZN, BABA, BAYRY, CNHI, DASTY, DSV.CO, EXO.MI, IMCD.AS, MBG.DE, NVS, SAND.ST, SDR.L, SKF-B.ST, SNY, SY1.DE, UL, WLN.PA | Chemicals, Europe, international, Logistics, Pharmaceuticals, semiconductors, value | - | The portfolio includes significant pharmaceutical investments including Bayer, AstraZeneca, and Sanofi. Bayer benefited from positive stroke drug trial results and potential Supreme Court hearing on RoundUp litigation. AstraZeneca was added as a new position due to its robust pipeline and attractive valuation following regulatory concerns. Sanofi was initiated based on strong R&D investment and pipeline potential despite vaccine market volatility. Samsung Electronics was a top contributor as earnings recovered due to strength in its core semiconductor business. The company's High Bandwidth Memory product lineup continues to improve under new management, positioning it as one of the world's leading semiconductor companies with a long runway for future growth. DSV was a top contributor during the quarter, delivering solid third-quarter results and accelerating the timeline for DB Schenker acquisition synergies. The freight forwarding business is viewed as high-growth and return-generative, benefiting from an asset-lite model with industry-leading management and profitability. IMCD and Symrise were added as new positions in the specialty chemicals space. IMCD is a global leader in marketing and distribution of specialty chemicals with significant pricing power and demand inelasticity. Symrise leads in flavors, fragrances, and specialty ingredients with renewed focus on profitability and cash flow showing early signs of operational inflection. The manager emphasizes value investing approach, noting that for more than a decade value investing in overseas markets witnessed U.S. growth stocks soar unsustainably. In 2025, they witnessed the unraveling of this paradigm as European equities fundamentals improved and valuation spreads began to narrow, benefiting their value-oriented strategy. |
| Oct 28 2025 | 2025 Q3 | AMV0 GR, BABA, BNZL LN, CNH, DSV DC, DSY FP, EDEN FP, GLEN LN, HEX NO, ITRK LN, KER FP, SHL GR | AI, commodities, Global Equities, industrials, Value Investing |
BABA GLEN LN BABA GLEN LN |
The fund emphasized opportunities in undervalued international equities, noting strong contributions from Kering, Alibaba, and Glencore. Management highlighted AI as a structural growth driver, especially in China, with firms like Alibaba leveraging AI cloud capabilities. Industrials and commodities exposure, including Glencore and CNH Industrial, benefited from cyclical recovery and supportive copper market trends. |
| Jul 22 2025 | 2025 Q2 | 105560 KS, 6273 JP, ASML, ASRNL NA, BABA, BAYN GR, CON GR, MC FP, WLN FP | Balance Sheets, currency effects, International Value, Sentiment, Valuation Discount |
105560 KS CON GR BAYN GR BABA MC FP ASML 6273 JP |
The letter highlights international equities as a fertile hunting ground for value opportunities due to persistent investor pessimism and currency-adjusted discounts. Management focuses on globally competitive companies trading below intrinsic value because of temporary macro or sentiment-driven headwinds. A long-term horizon and balance-sheet strength underpin the return outlook. |
| Mar 31 2025 | 2025 Q1 | 2502 JP, 8802 JP, BNP FP, FLUT, GLEN LN, KER FP, MC FP, RTO LN, TKA GR, WPP LN | - | - | |
| Apr 15 2024 | 2024 Q1 | BAYN GR, BXB AU, CON GR, DTG GR, IES GR, MBG GR, PRU LN, SKG LN, SN/ LN | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
LogisticsDeutsche Post demonstrated resilience with strong performance following robust earnings despite tariff-related challenges, driven by robust pricing power and cost control. The diversified logistics company showcased the defensive characteristics of quality logistics operators in challenging environments. |
Pricing Power Cost Control Tariff Resilience Diversified Logistics Earnings |
PharmaceuticalsEli Lilly represents a high-quality growth franchise in global healthcare, with leadership in diabetes, obesity, and neuroscience providing durable competitive advantages. The company's GLP-1 treatments continue to see demand outpace supply with additional indications on the horizon. |
Pharmaceuticals GLP1 Diabetes Obesity Healthcare | |
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 | |
Specialty ChemicalsAscent Industries represents a significant position focused on specialty chemical manufacturing. The company is transforming into a 'Chemicals-as-a-Service' model, providing customized solutions for small to mid-size customers neglected by larger players. |
Specialty Chemicals Manufacturing Niche Markets Chemical Services | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
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 |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management | |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic | |
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 22, 2025 | Fund Letters | David Herro | BAYN GR | Bayer AG | Health Care | Pharmaceuticals | Bull | Xetra | conglomerate, Cropscience, litigation, pharma, restructuring, valuation | Login |
| Jul 22, 2025 | Fund Letters | David Herro | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | New York Stock Exchange | buybacks, China, cloud, ecommerce, Regulation, valuation | Login |
| Jul 22, 2025 | Fund Letters | David Herro | MC FP | LVMH Moët Hennessy Louis Vuitton SE | Consumer Discretionary | Apparel, Accessories & Luxury Goods | Bull | Euronext Stock Exchange | brands, cashflow, China, dividends, Luxury, Pricingpower | Login |
| Jul 22, 2025 | Fund Letters | David Herro | ASML | ASML Holding N.V. | Information Technology | Semiconductor Equipment | Bull | Euronext Stock Exchange | CapEx, Euv, growth, Lithography, Monopoly, semiconductors | Login |
| Jul 22, 2025 | Fund Letters | David Herro | 6273 JP | SMC Corp. | Industrials | Industrial Machinery | Bull | New York Stock Exchange | Automation, CapEx, Cyclicality, Freecashflow, Industrials, Pneumatics | Login |
| Oct 28, 2025 | Fund Letters | David Herro | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NYSE | AI, buybacks, China, cloud, e-commerce, growth, technology, valuation | Login |
| Oct 28, 2025 | Fund Letters | David Herro | GLEN LN | Glencore plc | Materials | Diversified Metals & Mining | Bull | NYSE | cash flow, Commodities, Copper, dividend, Electrification, Mining, valuation | Login |
| Oct 28, 2025 | Fund Letters | David Herro | BABA | Alibaba Group Holding Ltd. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NYSE | AI, buybacks, China, cloud, e-commerce, growth, technology, valuation | Login |
| Oct 28, 2025 | Fund Letters | David Herro | GLEN LN | Glencore plc | Materials | Diversified Metals & Mining | Bull | NYSE | cash flow, Commodities, Copper, dividend, Electrification, Mining, valuation | Login |
| Jul 22, 2025 | Fund Letters | David Herro | 105560 KS | KB Financial Group Inc. | Financials | Banks | Bull | New York Stock Exchange | banking, buybacks, dividends, Governance, Korea, valuation | Login |
| Jul 22, 2025 | Fund Letters | David Herro | CON GR | Continental AG | Consumer Discretionary | Auto Parts & Equipment | Bull | Xetra | Autosuppliers, Electrification, Margins, restructuring, Tires | Login |
| TICKER | COMMENTARY |
|---|---|
| 005930.KS | Top gainers included Samsung (+38% in U.S. dollar terms) |
| 6301.T | We funded these buys by trimming Japanese construction equipment company Komatsu on strength. |
| AZN | World-class pharmaceutical and medical products manufacturer |
| BABA | Alibaba was a detractor during the quarter after the company reported mixed fiscal Q2 results. While cloud revenue growth accelerated and margins remained stable, the core commerce business struggled with slowing growth and significant profit pressure, particularly in the quick commerce segment where heavy investment and intense competition led to a sharp decline in profitability. |
| BAYRY | This pharmaceutical, agricultural and consumer health conglomerate has been a meaningful investment for the Global Fund for several years. Since inception, it has delivered very poor investment returns for the Fund. Happily, 2025 brought a change in fortunes for the company and the share price. Two of the key areas of investor concern about the company – a patent cliff in its pharmaceutical business, and ongoing costly litigation in its agriculture business – showed some very positive developments. In the former area, sales of some of its new drugs brought to market recently have been growing very strongly, and there were some very positive developments in the company's pipeline. In the agricultural business, there were finally judgements in the company's favour which have the potential to draw a line under the ongoing litigation. After dismal share price performances in 2023 and 2024, the Bayer share price approximately doubled during 2025. |
| CNHI | CNH Industrial detracted across the Funds, reflecting investors' continued concerns about the downturn of the Ag cycle and its impact on end-market demand. CNH remains significantly undervalued in our view, and we are adding to our position opportunistically. We took advantage of a pricing opportunity and added to CNH Industrial, which is now a top 10 holding in all four funds. |
| DASTY | Dassault Systèmes was a detractor during the quarter. The France-headquartered application software company's stock price declined as it reported disappointing third-quarter results. Revenues came in at the low end of the guidance range, and full-year organic growth projections were decreased. The shortcomings can largely be attributed to the Life Sciences and Mainstream Innovation segments, where growth was challenged. Still, Dassault Systèmes is a relatively new holding for us, and we continue to see it as a high-quality software business with attractive upside. |
| DSV.CO | DSV A/S was one of the top five winners for the quarter. |
| EXO.MI | Decline in prices of holdings and widened discount to NAV. We have favoured Exor despite/because of the recent downturn in Ferrari shares, given the strong see-through publicly listed element of over 85% of the portfolio, allied to strong capital management. |
| IMCD.AS | IMCD is a global leader in the marketing, sales and distribution of specialty chemicals and ingredients. The company is widely regarded as best-in-class, benefiting from a highly technical salesforce and extensive global scale. These strengths make IMCD a preferred partner, enabling it to drive consistent organic growth, enhance visibility across distribution channels, and streamline points of contact for customers and suppliers alike. IMCD specializes in the 'true specialties' area of the market, where chemicals or ingredients often have a material impact on end-product performance. That translates into significant pricing power and demand inelasticity – market features we find particularly attractive. Despite strong fundamentals, the stock price has fallen significantly due to a combination of cyclical downturn and market fears that we believe are overstated. This presented us with the opportunity to invest in a well-managed company with substantial M&A opportunities that we think should re-rate over the long term. |
| 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. |
| SNY | Sanofi is a global pharmaceutical company developing biologics, vaccines and healthcare solutions to prevent and treat a wide range of conditions in immunology, hemophilia, rare diseases and general medicine. We think there is a lot to be excited about as management has prioritized innovation by aggressively investing in research and development to cultivate a pipeline of promising products. Despite strong fundamentals, the stock has been weighed down by a volatile year for the vaccine market, investor concerns about patent cliffs and minimal value ascription to its pipeline. This created the opportunity for us to invest in a company we believe is improving, with a long runway for future growth as vaccine markets normalize and new product potential is realized. |
| SY1.DE | Symrise is a global leader in the development of flavors, fragrances, and specialty ingredients used across food, beverages and consumer products. We find the industry's consolidated structure attractive and value Symrise's leading positions in pet food palatability, beverage flavors and personal care ingredients that are well supported by its broad portfolio and long-standing customer relationships. While these ingredients represent a small portion of the total cost of goods sold, they are critical to the performance and differentiation of the end product, creating sticky long-term buyer-seller relationships. We also appreciate management's renewed focus on profitability and cash flow, with early signs of positive operational and financial inflection supporting improved results going forward. Despite this strong outlook, we believe that the stock has underperformed recently due to stalling organic growth under previous leadership, creating an attractive entry point for us to invest in a company poised for growth that is trading at a significant discount to our estimate of intrinsic value. |
| UL | Unilever is a global consumer goods company that develops and markets everyday food and personal care brands for billions of consumers worldwide. Anchored by iconic brands such as Dove, Knorr, Hellmann's and Vaseline, Unilever's refreshed management team is driving improved execution and strategic discipline to deliver more consistent growth, with a focus on higher-margin categories. Specifically, we appreciate their undertaking of various self-help initiatives, including cost-savings programs and brand divestments, which we believe will help unlock sustained value in the future. Despite Unilever's strong outlook, it trades at a discount to its peer group as prior undermanagement has resulted in 1% volume growth for the past decade. This provided us the opportunity to invest in a strong company with leading brands and an improved management team that is poised to increase per-share value. |
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