Emerging Markets Strategy - Portfolio Characteristics
The Emerging Markets Strategy invests primarily in equity securities of companies that are based in emerging markets or whose activities are primarily located in those markets. The portfolio normally holds 50-80 investments across at least 15 countries. To reduce its volatility, the portfolio is diversified across dimensions of geography, industry, currency and market capitalization.
Because of the often complex and expensive registration and custody requirements for direct investors into emerging markets equities, minimum investments for separate accounts in this strategy are significantly higher than for our other strategies.
Composite Performance (%) For Periods Ending December 31, 2011
| Annualized Returns | |||||
| 3 Months | 1 Year | 3 Years | 5 Years | 10 Years | |
|---|---|---|---|---|---|
| Emerging Markets (gross) | 6.39 | -16.01 | 20.03 | 2.87 | 15.38 |
| Emerging Markets (net) | 6.14 | -16.77 | 18.93 | 1.92 | 14.31 |
| MSCI Emerging Markets Index1 | 4.45 | -18.17 | 20.42 | 2.70 | 14.20 |
1Benchmark Index.
The Emerging Markets Composite contains fully discretionary US dollar-based emerging markets accounts investing in non-US equity and equity equivalent securities and cash reserves of companies domiciled predominantly in emerging markets countries. Harding Loevner is an affiliate of Affiliated Managers Group, Inc. (NYSE: AMG), an investment holding company with stakes in a diverse group of boutique firms. Harding Loevner claims compliance with the Global Investment Performance Standards (GIPS®). Harding Loevner has been independently verified by Ashland Partners & Company, LLP for the period November 1, 1989 through June 30, 2011. Verification assesses whether (1) the firm has complied with all composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm's policy and procedures are designed to calculate and present performance in compliance with GIPS standards. The Emerging Markets Composite has received a performance examination beginning December 1, 1998. Performance data quoted represents past performance; past performance does not guarantee future results. The US dollar is the currency used to express performance. Complete information on the construction and historical record of the Emerging Markets Composite is available by clicking here.
Ten Largest Holdings at December 31, 2011
| Company | Sector | Country | % |
|---|---|---|---|
| Samsung Electronics | Information Technology | South Korea | 4.9 |
| Ambev | Consumer Staples | Brazil | 2.6 |
| Petrobras | Energy | Brazil | 2.6 |
| America Movil | Telecom Services | Mexico | 2.4 |
| Taiwan Semiconductor | Information Technology | Taiwan | 2.3 |
| Wal-Mart de Mexico | Consumer Staples | Mexico | 2.3 |
| MTN Group | Telecom Services | South Africa | 2.1 |
| Gazprom | Energy | Russia | 2.0 |
| Hengan International | Consumer Staples | China | 2.0 |
| Bank Rakyat | Financials | Indonesia | 2.0 |
Ten Largest Holdings: 25.2% |
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For a complete list of Holdings, click here.
The portfolio is actively managed therefore holdings shown may not be current. They should not be considered recommendations to buy or sell any security.
The largest holdings, sector and country are shown as supplemental information only and complement the fully compliant Emerging Markets Composite GIPS presentation, which is available by clicking here.
Sector Weightings (%) at December 31, 2011
| Sector | Emerging Markets | Benchmark1 |
|---|---|---|
| Cons Discretionary | 7.6 | 8.1 |
| Cons Staples | 15.2 | 8.1 |
| Energy | 12.2 | 14.0 |
| Financials | 19.9 | 23.8 |
| Health Care | 3.0 | 1.0 |
| Industrials | 7.9 | 6.4 |
| Info Technology | 15.7 | 13.1 |
| Materials | 7.1 | 13.3 |
| Telecom Services | 9.4 | 8.5 |
| Utilities | 0.0 | 3.7 |
| Cash | 2.0 | — |
Geographical Weightings (%) at December 31, 2011
| Region | Emerging Markets | Benchmark1 |
|---|---|---|
| Brazil | 13.5 | 14.9 |
| China | 12.2 | 17.8 |
| India | 4.9 | 6.2 |
| Mexico | 8.3 | 4.7 |
| Russia | 7.6 | 6.3 |
| South Africa | 5.7 | 7.8 |
| South Korea | 8.3 | 15.0 |
| Taiwan | 6.4 | 10.9 |
| Developed Markets2 | 4.8 | — |
| Frontier Markets | 4.7 | — |
| Other Emg Markets3 | 21.6 | 16.4 |
| Cash | 2.0 | — |
1MSCI Emerging Markets Index; 2Includes countries outside the benchmark where holdings that have operations and/or sales focused in emerging markets are based; 3Includes the remaining 13 smaller emerging markets countries where holdings that have operations and/or sales focused in emerging markets are based.
Sector and geographical weights are shown as supplemental information only and complement the fully compliant Emerging Markets Composite GIPS presentation, which is available by clicking here.