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Quarter	Letter Date	Fund Name	QTD	YTD	Tickers	Themes	Quick Take

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Hardman Johnston International Equity 2024 Q3 Investor Letter | Buyside Digest

Back to Fund Profile (Hardman Johnston International Equity)

Primary Source Intelligence • Q3 2024 Letter Analysis

Hardman Johnston International Equity Quarterly Analysis

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

Fund Returns

Annualized+10.5%

Digest Analysis

Quick Take

"26% for MSCI EAFE. Defense and energy transition themes drove outperformance through Mitsubishi Heavy and Prysmian, while semiconductor concerns weighed on Nordic and ASML."

Executive Summary

Hardman Johnston International Equity returned 5.74% net in Q3 2024, underperforming the MSCI EAFE Net Index's 7.26% return due to late-quarter volatility. Key contributors included Industrials and Consumer Discretionary sectors, with Mitsubishi Heavy Industries benefiting from defense spending increases and nuclear renaissance, while Prysmian gained from energy transition trends. MercadoLibre demonstrated strong ecosystem growth with accelerating fintech and commerce synergies. Technology detractors included Nordic Semiconductor facing 2025 growth concerns and ASML pressured by Intel capex cuts and China demand uncertainty. The portfolio initiated Nexans, a cable maker positioned for electrification trends, while liquidating AIA Group due to China sentiment and T&D Holdings to concentrate in Dai-ichi Life. Looking forward, the manager expects continued volatility from elections and geopolitical uncertainty but remains confident in holdings' three-to-five-year growth objectives. Interest rate cuts and China stimulus provide supportive backdrop, while secular themes like defense spending, AI, and energy transition offer compelling investment opportunities despite near-term market unpredictability.

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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

68%

CautiousHigh

Moderate (68%)

The manager demonstrates moderate-high conviction through a concentrated 25-position portfolio with named holdings and specific thesis explanations for each position. Clear rationale provided for portfolio changes and multi-year investment horizon stated, though some hedging language around market uncertainty prevents a higher score.

Growth Outlook

25%

BearishBullish

Bearish (25%)

The manager acknowledges supportive factors like interest rate cuts and China stimulus but emphasizes significant uncertainties including elections, geopolitical tensions, and economic unpredictability. The outlook is cautiously constructive but heavily qualified by risk factors.

Risk Appetite

40%

DefensiveAggressive

Defensive (40%)

The portfolio maintains full investment with selective positioning changes, initiating one new position while liquidating two others. The manager expresses confidence in current holdings but acknowledges the need for selectivity given market conditions.

Capital Deployment

5%

De-riskingDeploying

De-risking (5%)

Portfolio activity was limited to one initiation and two liquidations, representing capital rotation rather than net deployment. Cash remains low at 1.1% with no indication of significant capital deployment or withdrawal during the quarter.

Forward Guidance

30%

CautiousExpansionary

Cautious (30%)

The manager plans to remain patient and selective, looking for opportunities that volatility may present. The approach is watchful rather than aggressively deploying, with emphasis on maintaining long-term conviction while being nimble.

Language Signal

10%

BearishBullish

Bearish (10%)

Language is dominated by risk and uncertainty terms including volatility, unpredictability, concerns, and pressures. While some opportunities are mentioned, the overall tone emphasizes caution and risk management over bullish positioning.

Perceived Risk

75%

Low RiskElevated

Elevated Risk (75%)

The manager explicitly identifies multiple significant risks including persistent volatility, election uncertainty, geopolitical tensions, Middle East conflicts, and economic unpredictability. Specific concerns about China's structural challenges and semiconductor cycle risks are detailed throughout the letter.

Opportunity Density

45%

ScarceAbundant

Selective (45%)

The manager sees selective opportunities in specific themes like defense, energy transition, and AI, but emphasizes the difficulty of finding value in a market where good companies tend to be fully valued. Opportunities exist but require patience and selectivity.

Time Horizon

70%

Short-TermLong-Term

Decade+ (70%)

The manager explicitly states a three-to-five-year investment horizon and emphasizes long-term conviction despite near-term volatility. The approach focuses on secular trends and business fundamentals rather than short-term catalysts, indicating a patient capital approach.