Frontier Emerging Markets Strategy - Portfolio Characteristics
The Frontier Emerging Markets Strategy invests in equity securities of companies based in frontier markets that are not part of the standard emerging market indices as well as in smaller traditionally-recognized emerging markets. The portfolio is constructed according to the same quality-growth investment philosophy shared by all our strategies, with country risk analysis also incorporated into the process. The portfolio may hold from 50 to 200 investments (the normal range is 60 to 80) across at least 12 countries. To reduce its volatility, the portfolio is diversified across dimensions of geography, industry, currency and market capitalization.
Composite Performance (%) For Periods Ending December 31, 2011
| Annualized Returns | |||||
| 3 Months | 1 Year | 3 Years | Since Inception1 | ||
|---|---|---|---|---|---|
| Frontier Emerging Markets (gross) | -0.68 | -19.52 | 13.51 | -10.14 | |
| Frontier Emerging Markets (net) | -1.05 | -20.73 | 11.98 | -11.35 | |
| MSCI Frontier Emerging Markets Index2 | 0.35 | -17.26 | 10.36 | -12.95 | |
1Inception Date: May 31, 2008; 2Benchmark Index.
The Frontier Emerging Markets Composite contains fully discretionary US dollar-based frontier emerging markets accounts. 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 assess whether (1) the firm has complied with all the 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 the GIPS standards. Verification does not ensure the accuracy of any composite presentation. The Frontier Emerging Markets Composite has not received a performance examination. 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 Frontier Emerging Markets Composite is available by clicking here.
Ten Largest Holdings at December 31, 2011
| Company | Sector | Country | % |
|---|---|---|---|
| The National Bank of Kuwait | Financials | Kuwait | 3.6 |
| Bancolombia | Financials | Colombia | 3.4 |
| Credicorp | Financials | Peru | 3.2 |
| Jarir Marketing | Industrials | Saudi Arabia | 3.1 |
| Qatar National Bank | Financials | Qatar | 2.9 |
| Qatar Electricity & Water | Utilities | Qatar | 2.7 |
| Industries of Qatar | Industrials | Qatar | 2.6 |
| Kuwait Investment Project | Financials | Kuwait | 2.5 |
| Managem | Materials | Morocco | 2.5 |
| Home Product Center | Consumer Discretionary | Thailand | 2.3 |
Ten Largest Holdings: 28.8% |
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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 Frontier Emerging Markets Composite GIPS presentation, which is available by clicking here.
Geographical Weightings (%) at December 31, 2011
| Region | Frontier Emerging | Benchmark1 |
|---|---|---|
| Africa | 18.9 | 14.3 |
| Asia | 7.5 | 18.3 |
| Europe | 9.4 | 5.3 |
| Gulf States | 18.9 | 29.6 |
| Latin America | 20.9 | 31.0 |
| Middle East | 2.5 | 1.5 |
| Developed Mkts2 | 4.3 | — |
| Other Emg Mkts3 | 7.6 | — |
| Other Frnt Mkts2 | 8.4 | — |
| Cash | 1.6 | — |
Sector Weightings (%) at December 31, 2011
| Sector | Frontier Emerging | Benchmark1 |
|---|---|---|
| Cons Discretionary | 6.0 | 0.6 |
| Cons Staples | 11.1 | 6.0 |
| Energy | 6.6 | 9.9 |
| Financials | 33.9 | 45.0 |
| Health Care | 3.8 | 1.3 |
| Industrials | 15.9 | 8.7 |
| Info Technology | 0.6 | 0.0 |
| Materials | 10.1 | 11.1 |
| Telecom Services | 6.1 | 13.5 |
| Utilities | 4.3 | 3.9 |
| Cash | 1.6 | — |
1MSCI Frontier Emerging Markets Index; 2Includes countries outside the benchmark where holdings with a portion of operations and/or sales focused in emerging and/or frontier markets are based; 3Includes countries outside the benchmark that constitute less than 5% of the MSCI Emerging Markets Index.
Sector and geographical weights are shown as supplemental information only and complement the fully compliant Frontier Emerging Markets Composite GIPS presentation, which is available by clicking here.