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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.
"Emerging markets delivered the strongest quarterly return since 2009, led by Taiwan and South Korea's AI supply chain dominance. Beyond semiconductor manufacturing, EM companies are innovating with affordable AI models to strengthen competitive advantages across diverse industries."
Harding Loevner's Emerging Markets Equity strategy returned 19.2% gross in Q2 2026, trailing the MSCI EM Index's 24.2% rise primarily due to underweights in semiconductors and semiconductor equipment. The quarter was shaped by the continued acceleration of the global AI infrastructure boom and the US-Iran conflict. Taiwan and South Korea surged 49% and 88% respectively, driven by AI supply chain companies, while China lagged on soft domestic demand. The concentration of EM stock returns within Information Technology masks the breadth of AI-related innovation occurring among EM companies. Since DeepSeek's breakthroughs, intense competition has produced highly efficient AI models at a fraction of frontier model costs, enabling companies like Naver, Tencent, and Bochu to use AI pragmatically to improve products and expand markets while funding investments from operating cash flows. The strategy adjusted risk guidelines to provide greater flexibility in IT sector exposure, raising the sector limit to 35% and single stock limit to 8%, while maintaining its fundamental process of building a diverse portfolio across industries.
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