Harding Loevner International Equity ADR Q4 2024 Report

2025-02-18 07:30:00 ET

Summary

• US stocks outperformed globally in 2024, driven by AI leaders like Nvidia, Apple, and Microsoft, while international markets lagged.
• Trump's election win boosted US equities, but international markets and bonds were cautious, with rising yields and political uncertainties.
• Health Care stocks faced pressure due to regulatory concerns under Trump, while Financials and IT sectors performed relatively well.
• Portfolio strategy focuses on high-growth companies like TSMC, Disco Corp, and MercadoLibre, despite challenges from political and economic uncertainties.

Market Review

International stock markets finished the final quarter of 2024 on a down note, while US stocks significantly outpaced the rest of the world, in both the quarter and the year, boosted by strong returns from growth-oriented index heavyweights and continued enthusiasm for artificial intelligence. In the US, the rising share prices of the so-called “Magnificent Seven”—Nvidia ( NVDA ), Apple ( AAPL ), Amazon ( AMZN ), META , Microsoft ( MSFT ), Alphabet ( GOOG , GOOGL ), and Tesla ( TSLA ), all in some respect seen as leaders in AI—played a pivotal role. While international investors have enjoyed investment opportunities that are key beneficiaries and facilitators of AI’s growth, TSMC ( TSM ) perhaps being the most prominent, such companies represent a smaller weight in the MSCI ACWI ex US Index than the MSCI ACWI index.

Donald Trump’s victory in the US presidential election gave US equities a bump during the quarter, as investors looked forward to some business-friendly policies, such as tax cuts and deregulation, while perhaps overlooking the consequences to US companies of some potentially less business-friendly ones. International equity markets took a more cautious view of the incoming administration, as did US bond investors, who sent bond prices lower presumably anticipating further fiscal largesse. The ICE US Treasury Core Bond Index, which maintains exposure to Treasuries ranging from one to thirty-year maturities, fell 4% after peaking in mid-September.

MSCI ACWI ex US Index Performance (USD %)

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