Global Equity Third Quarter 2014 Update

We are still assessing the portfolio implications of aggressive monetary stimulus and a healing banking system in Europe. We have generally avoided investments in the euro zone Financials sector over the past few years of recovering global stock markets, for the simple reason that we found it hard to articulate a growth argument for all but an exceptional few of the financial businesses that we examined there. That may change if the putative quantitative easing will eventually have the desired effect of rekindling economic momentum in Europe—a condition on which the jury is decidedly out. Certainly we heard managements make arguments that sounded like growth arguments when we met a number of companies on a recent trip to Europe. The US experience with cleaning up and recapitalizing its banking system is causing us to rethink euro zone Financials, but so far we have taken no action on that front. What is clear is that the euro zone will not implode without putting up a (monetary) fight. That is likely to be good for multinationals based there, thanks to the competitiveness corollary from the weaker euro. As a counterpoint, US multinationals will at least face the headwind of weaker translation of their overseas earnings. It may also be good for Emerging Markets, which benefit from more liquidity creation and exported capital in search of higher yields.

Emerging Markets Third Quarter 2014 Update

The winds of change may be rising in China. If new policy directives by the Communist Party are successful in holding SOE managements more accountable for investment, cash flow generation, and capital intensity—especially if this is attained by such proven methods as linking bonuses to business results and granting stock options—then the stage will be set for a material improvement in returns. Today, few managers of Chinese SOEs own stock in the companies they steer, let alone stock options. While such radical reform of SOE management has not yet been formally enacted, we suspect it will happen. The time is right! China doesn’t need more steel, cement, diesel, or credit. It needs a smarter, more dynamic economy that is less capital- and energy-hungry. That this is the targeted path has been made clear by the new administration. Part of the plan entails reducing SOE dominance in their sectors, allowing private sector companies to take a larger share of market. The ensuing competition should bring higher-paying jobs and better-quality goods and services. It will not happen overnight, nor will it impact all sectors equally. But if it does happen for some, even if only at the margin, the changes will still be very much for the better.

Performance for periods ending September 30, 2014

total returns % returns % *
  quarter 1 year 3 years 5 years 10 years since inception Total Expense Ratio
Global Equity
Class A - US Dollar INCEPTION: 06/21/07 -1.05 12.23 15.80 10.41 N.A. 4.87 0.85
Class A - Euro INCEPTION: 06/21/07 7.40 20.34 18.08 13.68 N.A. 5.83 0.85
Class A - GBP Sterling INCEPTION: 03/05/08 4.48 12.13 14.31 10.18 N.A. 9.44 0.85
Class A - Singapore Dollar INCEPTION: 08/05/08 1.27 14.21 14.87 8.27 N.A. 6.00 0.85
Class A - Australian Dollar INCEPTION: 10/04/12 6.62 19.67 N.A. N.A. N.A. 21.21 0.85
International Equity
Class A - US Dollar INCEPTION: 12/02/13 -3.77 4.40 N.A. N.A. N.A. 7.62 0.90
Class A - GBP Sterling INCEPTION: 06/07/13 1.54 4.05 N.A. N.A. N.A. 4.24 0.90
Class I - US Dollar INCEPTION: 04/03/13 -3.72 4.41 N.A. N.A. N.A. 7.50 0.75
Emerging Markets
Class A - US Dollar INCEPTION: 09/25/12 -4.81 6.12 N.A. N.A. N.A. 6.16 1.20
Class M - US Dollar INCEPTION: 06/18/14 -4.87 N.A. N.A. N.A. N.A. -4.20 1.05
Class I - Canadian Dollar INCEPTION: 11/14/13 -0.09 N.A. N.A. N.A. N.A. 11.90 0.90
Frontier Markets
Class A - US Dollar INCEPTION: 09/25/12 -0.20 20.79 N.A. N.A. N.A. 22.02 1.75
Class A - Euro INCEPTION: 03/12/14 8.27 N.A. N.A. N.A. N.A. 20.50 1.75
total returns % returns % *
  quarter 1 year 3 years 5 years 10 years since inception Total Expense Ratio
International Equity
Class B - US Dollar INCEPTION: 09/27/13 -3.92 3.94 N.A. N.A. N.A. 2.98 1.15
Emerging Markets
Class B - US Dollar INCEPTION: 10/25/13 -4.89 N.A. N.A. N.A. N.A. 1.10 1.50

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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. 

Investment Philosophy and Process

May 2011

Simon Hallett, Chief Investment Officer, discusses Harding Loevner's investment philosophy and process.


The videos provide general background about Harding Loevner's investment philosophy and process. For more detailed information regarding particular investment strategies, please see our Publications page.

Any discussion of specific securities is not a recommendation to buy or sell. It should not be assumed that investment in the securities identified has been or will be profitable. To request a complete list of holdings for the past year, please contact Harding Loevner.

The portfolios invest in foreign securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. They also invest in emerging markets, which involve unique risks, such as exposure to economies less diverse and mature than the US or other more established foreign markets. The portfolios may invest in smaller companies which involve additional risks such as limited liquidity and greater volatility. Economic and political instability may cause larger price changes in emerging markets securities than other foreign securities.

Past performance does not guarantee future results. Investing involves risk. There is no guarantee that any investment strategy will meet its objective.

Global Equity

May 2011

Peter Baughan, Co-Lead Portfolio Manager of the Global Equity Strategy, is featured in this video.


The videos provide general background about Harding Loevner's investment philosophy and process. For more detailed information regarding particular investment strategies, please see our Publications page.

Any discussion of specific securities is not a recommendation to buy or sell. It should not be assumed that investment in the securities identified has been or will be profitable. To request a complete list of holdings for the past year, please contact Harding Loevner.

The portfolios invest in foreign securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. They also invest in emerging markets, which involve unique risks, such as exposure to economies less diverse and mature than the US or other more established foreign markets. The portfolios may invest in smaller companies which involve additional risks such as limited liquidity and greater volatility. Economic and political instability may cause larger price changes in emerging markets securities than other foreign securities.

Past performance does not guarantee future results. Investing involves risk. There is no guarantee that any investment strategy will meet its objective.

Emerging Markets

May 2011

Rusty Johnson, Co-Lead Portfolio Manager of the Emerging Markets Strategy, is featured in this video.


The videos provide general background about Harding Loevner's investment philosophy and process. For more detailed information regarding particular investment strategies, please see our Publications page.

Any discussion of specific securities is not a recommendation to buy or sell. It should not be assumed that investment in the securities identified has been or will be profitable. To request a complete list of holdings for the past year, please contact Harding Loevner.

The portfolios invest in foreign securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. They also invest in emerging markets, which involve unique risks, such as exposure to economies less diverse and mature than the US or other more established foreign markets. The portfolios may invest in smaller companies which involve additional risks such as limited liquidity and greater volatility. Economic and political instability may cause larger price changes in emerging markets securities than other foreign securities.

Past performance does not guarantee future results. Investing involves risk. There is no guarantee that any investment strategy will meet its objective.


Pricing as of 12/18/14

Global Equity Class A - USD
NAV 1.431
Daily Change 2.361 %
YTD Return 5.843%
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International Equity Class A - USD
NAV 1.009
Daily Change 2.022 %
YTD Return -1.175%
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Emerging Markets Class A - USD
NAV 1.066
Daily Change 2.500 %
YTD Return -3.179%
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Frontier Markets Class A - USD
NAV 1.265
Daily Change 1.362 %
YTD Return -4.239%
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International Equity Class B - USD
NAV 1.018
Daily Change 2.004 %
YTD Return -1.357%
Emerging Markets Class B - USD
NAV 0.954
Daily Change 2.361 %
YTD Return -3.441%