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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Harris Associates International Equity Strategy 2025 Q1 Investor Letter | Buyside Digest

Back to Fund Profile (Harris Associates International Equity Strategy)

Primary Source Intelligence • Q1 2025 Letter Analysis

Harris Associates International Equity Strategy Quarterly Analysis

Buyside Digest is not affiliated with, and does not endorse, Harris Associates International Equity Strategy. This analysis is provided for institutional research purposes only and is not investment advice.

Fund Returns

QTD+7.86%

Annualized+8.92%

Positioning StanceConstructive

Market CapLarge Cap

GeographyEurope, Asia, Global

Digest Analysis

Quick Take

"New positions in LVMH luxury goods, Flutter gambling, and Japanese real estate reflect opportunistic value investing. The manager maintains conviction that persistent value-growth valuation imbalances will drive continued outperformance."

Executive Summary

Harris Associates' International Strategy delivered 7.86% net returns in Q1 2025, outperforming the MSCI World ex USA Index's 6.20% return. The portfolio benefited from strong contributions from BNP Paribas, which posted strong fiscal results driven by Corporate and Institutional Banking strength, and Alibaba Group, which delivered accelerating e-commerce growth and cloud revenue expansion fueled by AI demand. Thyssenkrupp gained on solid results and increased German defense spending benefiting its Marine Systems segment. Key detractors included WPP due to weaker results and client losses, Glencore from declining commodity prices, and Kering despite in-line results. The manager initiated five new positions including Asahi Group Holdings, Flutter Entertainment, Rentokil Initial, LVMH, and Mitsubishi Estate, while eliminating four holdings. The investment approach remains focused on bottom-up fundamental analysis, with the manager maintaining conviction that significant valuation imbalances between value and growth equities will drive superior long-term performance for value-oriented strategies despite recent outperformance.

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Institutional Meta Strategy

Meta Strategy Gauges

Algorithmic conviction, macroeconomic posture, and risk appetite signals extracted from this quarterly letter with qualitative explanations.

Signal Matrix

Market Conviction

80%

CautiousHigh

High Conviction (80%)

The manager demonstrates high conviction by maintaining positions in underperforming holdings like WPP and Glencore due to strong intrinsic value, while adding multiple new high-conviction positions during pullbacks.

Growth Outlook

50%

BearishBullish

Neutral (50%)

The manager expresses optimism for international value equities, highlighting a persistent valuation imbalance that should fuel outperformance.

Risk Appetite

50%

DefensiveAggressive

Balanced (50%)

The fund actively took advantage of market sell-offs and macro concerns to buy high-quality names like LVMH, Flutter, and Rentokil at discounted valuations.

Capital Deployment

60%

De-riskingDeploying

Net Neutral (60%)

The manager actively deployed capital into five new high-conviction holdings while exiting four existing positions to optimize portfolio alignment.

Forward Guidance

60%

CautiousExpansionary

Neutral (60%)

Forward guidance across portfolio holdings and value equities is positive, with expectations of operational recovery, margin expansion, and market re-rating.

Language Signal

70%

BearishBullish

Bullish (70%)

The commentary uses confident, assertive language focusing on fundamental intrinsic value, competitive advantages, and well-positioned management teams.

Perceived Risk

20%

Low RiskElevated

Low Risk (20%)

While acknowledging macroeconomic uncertainties and commodity price volatility, the manager views market risk as creating attractive entry points rather than fundamental threats.

Opportunity Density

60%

ScarceAbundant

Selective (60%)

The team identified numerous compelling buy opportunities across varied sectors and regions, initiating five new positions during the quarter.

Time Horizon

80%

Short-TermLong-Term

Decade+ (80%)

The strategy clearly focuses on a multi-year horizon, prioritizing long-term capital generation and intrinsic value over short-term earnings noise.