Our biggest worry for 2015 is the recognition that, in our experience, shifts in monetary policy direction are usually accompanied by a rise in market volatility, as investors and corporate treasurers coalesce around, and adapt to, a new world view, and shift portfolios and exposures more quickly than available liquidity can easily accommodate. When monetary policies of major economies diverge, the interactions are likely to be more violent still, and that is exactly what we have currently in the opposing directions of the US Federal Reserve and the European Central Bank's signaled intentions. The speed and size of the oil price decline, combined with the breadth of the dollar appreciation, may be merely the first salvos of rising volatility.
Our team concedes to a degree of natural bias towards the Emerging Market (EM) asset class, but our objective view of its current merits is nonetheless leaning towards the positive. The market some time ago fell out of love with EMs and has increasingly focused on the negative fundamental developments, which have been very real and numerous. In recent years, EMs have suffered drought—both in the literal sense of water shortage and also as a distinct shortage in many countries of wise and consistent leadership. Collapsing commodity prices, politically-motivated violence, currency depreciation, and rising competitive intensity have smothered earnings growth—and investor enthusiasm. Only the locusts have yet to arrive. But EMs are not irreparably broken. We see much evidence of life (and even growth) in our companies. Major, positive political change is underway in the three most populous EM countries: China, India, and Indonesia, potentially impacting a cool 2.9 billion people. Shouldn’t we cheer that? The vestigial legacy of a command economy such as China’s is you can still, within limits…command it. The national government may well navigate a bumpy but not disastrous landing out of the property and local government excesses. State-owned enterprise (SOE) reform is a very strong card, as it requires no expansive credit or fiscal expenditure program. Rather, SOEs should be induced to reform largely by legislation, ideally incentivized by stock options. India’s and Indonesia’s growth have suffered due to their inability to build sufficient infrastructure. Those issues may not yet be fixed but at least the right people now have a strong and intensifying mandate to address it. At the stock level, we are excited as EMs once again offer up a diverse selection of attractively valued, high-quality, growing companies, ranging from online travel services in China to generic drug and baby milk producers in Africa and Latin America. The list is impressively long: the nearly 80 names that make up our portfolio.
|total returns %||returns % *|
|quarter||1 year||3 years||5 years||10 years||since inception||Total Expense Ratio|
|Class A - US Dollar INCEPTION: 06/21/07||1.20||5.77||14.29||9.48||N.A.||4.87||0.85|
|Class A - Euro INCEPTION: 06/21/07||5.55||20.41||16.78||13.26||N.A.||6.39||0.85|
|Class A - GBP Sterling INCEPTION: 03/05/08||5.25||12.36||14.14||10.33||N.A.||9.89||0.85|
|Class A - Singapore Dollar INCEPTION: 08/05/08||5.03||11.00||15.09||8.27||N.A.||6.57||0.85|
|Class A - Australian Dollar INCEPTION: 10/04/12||8.46||15.72||N.A.||N.A.||N.A.||22.99||0.85|
|Class A - US Dollar INCEPTION: 12/02/13||-1.08||-1.08||N.A.||N.A.||N.A.||5.62||0.90|
|Class A - GBP Sterling INCEPTION: 06/07/13||2.93||5.13||N.A.||N.A.||N.A.||5.47||0.90|
|Class I - US Dollar INCEPTION: 04/03/13||-0.99||-0.90||N.A.||N.A.||N.A.||5.78||0.75|
|Class A - US Dollar INCEPTION: 09/25/12||-3.55||-1.18||N.A.||N.A.||N.A.||3.79||1.20|
|Class I - Canadian Dollar INCEPTION: 11/14/13||0.09||8.42||N.A.||N.A.||N.A.||10.56||0.90|
|Class A - US Dollar INCEPTION: 09/25/12||-10.65||0.98||N.A.||N.A.||N.A.||13.56||1.75|
|Class A - Euro INCEPTION: 03/12/14||-6.81||N.A.||N.A.||N.A.||N.A.||12.30||1.75|
|Class A - Australian Dollar INCEPTION: 07/30/14||-4.15||N.A.||N.A.||N.A.||N.A.||1.60||1.75|
Fund returns are net of fees.
*Returns since inception are total returns for currency classes less than one year old; returns greater than one year are average annualized returns.
Performance data quoted represents past performance; past performance does not guarantee future results.
The information contained herein concerns a sub-fund (the “Fund”) of Harding Loevner Funds plc (the “Company”), an umbrella-type open-ended investment company authorized in Ireland as an undertaking for collective investment in transferable securities (a “UCITS”) pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, as amended. Harding Loevner LP is the investment manager of the Company.
The investments of the Fund in securities are subject to normal market fluctuations and other risks inherent in investing in securities. The value of investments and the income from them, and therefore the value of and income from Shares relating to each Fund can go down as well as up and an investor may not get back the amount he invests. Changes in exchange rates between currencies or the conversion from one currency to another may also cause the value of the investments to diminish or increase. An investment in a Fund should not constitute a substantial proportion of an investment portfolio and may not be appropriate for all investors. For further discussion of risk factors, refer to the Risk Factors section of the Company’s prospectus and the applicable Fund’s Supplement to the Prospectus.
There can be no assurance that the Fund’s investment objective will be achieved and investment results may vary substantially over time. This document is for information purposes only and does not constitute an offer or invitation to purchase shares in the Fund and has not been prepared in connection with any such offer or invitation.
|Global Equity Class A - USD|
|Daily Change||-1.071 %|
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|International Equity Class A - USD|
|Daily Change||-0.649 %|
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|Emerging Markets Class A - USD|
|Daily Change||-0.362 %|
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|Frontier Markets Class A - USD|
|Daily Change||-0.080 %|
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