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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, Harding Loevner Emerging Markets Equity. This analysis is provided for institutional research purposes only and is not investment advice.
"Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwinds like AI and e-commerce remain highly attractive."
In the Second Quarter 2025 Report, Harding Loevner outlines its investment framework through the lens of Michael Porter's 'Five Forces' approach to identify quality companies possessing enduring local competitive advantages. The manager highlights that emerging market (EM) companies are increasingly targeting other EM regions for growth, a trend accelerated by persistent global tariff threats. In Brazil, local incumbents like e-commerce giant MercadoLibre, pharmacy chain Raia Drogasil, and fashion retailer Lojas Renner are successfully defending their domestic footprints against international competitors (such as Singapore’s Sea/Shopee and China’s Shein) by leveraging deep knowledge of the local customer base, building proprietary physical logistics networks, and utilizing data-driven digital offerings. Conversely, the portfolio exited its position in Brazil’s dominant car-rental company, Localiza, due to structural headwinds from cheap Chinese electric vehicle imports depressing used car prices and squeezing margins. In the technology sector, despite geopolitical friction, the manager remains highly constructive on Taiwanese semiconductor and server-enabling companies like Aspeed and Hon Hai Precision, which are experiencing robust tailwinds from the AI infrastructure buildout. Furthermore, corporate governance reforms under South Korea’s new administration ('value-up' program) provide positive catalysts for domestic holdings such as Coway. The fund registered a gross return of 10.34% in Q2 2025, lagging its benchmark, primarily dragged down by its underweight position in TSMC and relative weakness in China.
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Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.
Market Conviction
High-conviction positioning: Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Growth Outlook
Market outlook remains above average conviction: Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Risk Appetite
Risk appetite posture is above average conviction: Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Capital Deployment
Manager actively deployed capital into high-conviction opportunities. Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Forward Guidance
Forward guidance signal: Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Language Signal
Tone analysis indicates moderate conviction language: Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Perceived Risk
Perceived risk level is evaluated as moderate conviction. Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Opportunity Density
Opportunity density index indicates above average conviction actionable entry points. Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
Time Horizon
Investment time horizon reflects a high conviction orientation. Despite trade war disruptions and tariff-related macro headwinds, local emerging market leaders with deep local market knowledge, integrated ecosystems, and strong secular tailwind...
