Harding Loevner Has Succeeded by Staying Focused

Harding Loevner has stuck with its core strengths and principles for more than a quarter century while many other fund shops have overextended themselves. Indeed, the firm has only opened five funds since it was founded by a pair of overseas investing experts in 1989. All five of the funds are international-stock offerings. And the funds were launched in a very deliberate and sensible manner. For example,

Each of the funds follows the same quality-driven strategy, and that approach is both attractive and distinctive. Specifically, the firm's managers focus on healthy growers with clear competitive advantages as well as several other positive attributes. The managers pay ample attention to valuations and risk controls and move at a measured pace, but they are also comfortable loading up on sectors and countries that are packed with compelling investments. The end results are portfolios that have appealing mixes of more-conservative traits (such as high-quality metrics and moderate price multiples) and more-aggressive characteristics (such as notable sector and country overweightings). As a result, all of the funds provide significant downside protection without sacrificing too much upside potential.

Meanwhile, Harding Loevner has built a superior investment team by retaining a healthy majority of the seasoned professionals that joined the firm in its early years and by hiring a good number of individuals with strong credentials in the subsequent years. Chief investment officer Simon Hallett came on board in 1991, served as the manager of

The merits of the family discipline and the mettle of the investment team are evident in the performance of the funds. Harding Loevner International Equity, Harding Loevner Emerging Markets, and

Harding Loevner, like nearly all fund shops, has areas where it could improve. Its fees could be lower, for example, particularly on its two younger funds and its retail share classes. But investors who are seeking international-stock funds for the long run have ample grounds to check out its lineup.