ATLPF - Harding Loevner International Developed Markets Equity Composite Q1 2024 Report

2024-05-29 10:30:00 ET

Summary

• Harding Loevner is an investment manager that invests primarily in publicly traded global equities. We were founded in 1989 by former managers for the Rockefeller family. Harding Loevner is a Delaware limited partnership. We operate independently of Affiliated Managers Group.
• The International Developed Markets Equity composite rose 1.67% in the quarter gross of fees, trailing the 5.74% gain for the MSCI World ex US Index.
• As global markets increasingly align to capitalize on the AI theme, driving up a diverse array of beneficiaries, our decision to own, or not, various companies tied to this theme is rooted in a deliberate process of bottom-up decision-making that spans years and occasionally decades.
• The anticipated growth in semiconductor demand isboosting expectations for related suppliers, and this dynamic extends to a broad set ofcompanies involved in various facets of semiconductor production.

Market Review

Stock markets gained in the quarter despite rising bond yields, due in no small part to ongoing interest in the prospects for artificial intelligence ('AI'). Most sectors and all regions except Pacific ex Japan finished in positive territory.

Monetary policies in global developed markets, which had previously moved together toward higher rates to curb inflation, began to diverge as central bankers addressed varied inflationary trends. In the US, the Federal Reserve kept its benchmark rate steady at 5.25–5.5% for the fifth consecutive meeting, as higher-than-expected Consumer Price Index figures largely caused by rising housing expenses dashed hopes for an early rate cut. Nevertheless, the Fed continued to signal three rate cuts this year. Longer-term interest rates in the US such as mortgage rates actually increased as investors adjusted their expectations for timing and magnitude of future rate cuts from the Fed; expectations began the year at seven cuts of 25 basis points (bps), well ahead of guidance. Both the Bank of England and European Central Bank also kept rates unchanged, in contrast to the Swiss National Bank’s unexpected reduction of 25 bps—the first cut by a major central bank since the pandemic’s end—triggered by inflation there returning to the bank’s target range....

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