Overview

Investment Objective
The International Small Companies Strategy (the "Portfolio") seeks long-term capital appreciation through investments in equity securities of small companies based outside the United States. Companies considered to be small are those with a market capitalization below US$3 billion.

Principal Investment Strategy
The Portfolio invests in equity securities of small companies based outside the U.S., including companies in emerging as well as developed markets. Harding, Loevner Management, L.P. ("Harding Loevner"), the investment adviser, undertakes fundamental research in an effort to identify companies that are well managed, financially sound, fast growing and strongly competitive and whose shares are under-priced relative to their intrinsic value. The Portfolio normally holds 50-200 investments across at least 12 countries. To reduce its volatility, the Portfolio is diversified across dimensions of geography, industry and currency.

The Portfolio invests in foreign securities, which will involve greater volatility and political, economic, and currency risks, such as exposure to economies less diverse and mature than the U.S. or other more established foreign markets. Economic and political instability may cause larger price changes in emerging markets securities than other foreign securities. The portfolio invests in smaller companies which involve additional risks such as limited liquidity and greater volatility.