Portfolio Manager
Portfolio Manager
An International Fund targeting superior risk-adjusted returns through investing in high-quality and durable growing companies at reasonable prices.
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The Pengana Harding Loevner International Fund invests in high-quality, growing companies identified through fundamental research with a long-term, global perspective.
Pengana has appointed Harding Loevner to managed the Fund. Harding Loevner is a New Jersey-based global equity fund manager formed in 1989 with over US$86billion in Assets under Management.
Harding Loevner’ analysts search the world for companies that meet their high quality and durable growth criteria, conduct fundamental research, then value and rate their stocks to make them available to PMs for investment.
1. Harding Loevner was appointed fund manager as of 10 May 2021. June 2021 represents the first full month of Harding Loevner managing the Fund.
2. Class B Inception date 1 July 2015. Figures shown are calculated from the continuous performance of both the current and previous strategies. For performance see row labelled Fund (APIR PCL0026AU) in the table above which is the continuous performance of both the current and previous (shaded) strategies.
3. Harding Loevner Global Equity Strategy inception 1 Dec 1989
4. Prior to June 2021, the Harding Loevner Global Equity Strategy performance (labelled ‘Current Strategy (Partial Simulation)’ and shown in the shaded area) includes the strategy performance simulated by Pengana from the monthly gross returns of the Harding Loevner Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of Class B. From June 2021 the strategy performance is the performance of the Pengana Harding Loevner International Fund Class B.
5. MSCI All Country World Total Return Index in AUD.
6. Performance for periods greater than 12 months are annualised. Net performance figures are shown after all fees and expenses and assume reinvestment of distributions. No allowance has been made for buy/sell spreads. Please refer to the PDS for information regarding risks. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
7. The Harding Loevner Global Equity Strategy performance (shown in the shaded area in the chart, and in the performance table as row labeled ‘Harding Loevner Global Equity Strategy) has been simulated by Pengana from the monthly gross returns of the Harding Loevner Global Equity strategy. This simulation was done by: 1) the conversion of US-denominated gross returns to AUD, 2) applying the fee structure of the stated class. Strategy Inception 30 November 1989.
8. Annualised standard deviation since inception.
9. Relative to MSCI All Country World Total Return Index in AUD
* For further information regarding fees please see the PDS available on our website.
COMMENTARY
Market Commentary
Global equities rose strongly in September, with the benchmark up 2.3%. Overall, the month saw broad regional participation but sector leadership concentrated in Technology.
Emerging Markets led, driven by a sharp rebound in China as sentiment improved following government encouragement for internet leaders such as Tencent to expand their domestic AI investments. The policy support helped offset trade concerns and reignited optimism around long-term growth prospects.
Developed markets also advanced, supported by ongoing enthusiasm for AI-related companies and continued capital investment in data-centre infrastructure. The United States remained a key driver, while Europe and Japan delivered moderate gains alongside improving economic indicators.
The sustained focus on AI investment continues to channel market momentum toward a small group of large-cap beneficiaries. Meanwhile, defensive sectors such as Consumer Staples lagged as investors rotated toward cyclical and growth-oriented areas. Despite this narrow leadership, underlying economic conditions remain constructive, with easing inflation, resilient labour markets, and a gradual improvement in global demand.
Portfolio Commentary
The Fund returned 0.6% in September, underperforming the benchmark’s gain. Results were held back by weakness in US software holdings and other Information Technology companies.
The market’s enthusiasm for a narrow group of perceived AI leaders has remained a key challenge for the portfolio. The strategy is designed to emphasise diversification and attractive valuations rather than thematic exposure, recognising that leadership driven by a single investment theme rarely endures. Several holdings, such as NVIDIA, Broadcom, ASML, TSMC, Alphabet, Microsoft, and Tencent, are benefiting from AI adoption. However, these positions are held because of their strong fundamentals and consistent earnings power, not short-term price momentum.
This environment, which has persisted for much of the year, has been difficult for portfolios tilted toward quality companies, as investors have preferred lower-quality and more speculative areas of the market. History suggests that such phases are temporary, and the team believes its focus on valuation discipline, sustainable growth, and prudent diversification will be rewarded over time as market leadership broadens.
During the month, the Fund initiated a new position in Elevance Health, a leading US health management organisation. The investment followed share price weakness that presented an attractive opportunity to invest in a company with a strong brand, disciplined underwriting, and a growing technology and services platform. Elevance’s Carelon division, which provides data analytics and operational support to health plans and providers, offers an additional source of growth and potential margin expansion.
Among individual holdings, Synopsys detracted after issuing softer fourth-quarter guidance due to reduced spending from a large foundry customer and ongoing export restrictions to China. Tradeweb also declined, extending weakness following mixed results in August. By contrast, Alphabet contributed positively after a favourable ruling in its US antitrust case eased regulatory uncertainty and supported confidence in the company’s long-term business model.
The portfolio remains positioned in high-quality companies with sustainable growth drivers and strong balance sheets. The team continues to apply its disciplined, bottom-up investment process, maintaining a diversified portfolio built to deliver resilient results and long-term value across a range of market conditions.