Depositary Receipts, and European Depositary Receipts (collectively,
“Depositary Receipts”) will be considered to be denominated in the currency of the country where the securities underlying the Depositary Receipts are principally traded.
The Portfolio invests, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in common stocks, preferred stocks, rights, and warrants issued
by small companies that are based outside the United States, securities convertible into such securities
(including Depositary Receipts), and investment companies that invest in the types of securities in which the
Portfolio would normally invest. If the Portfolio continues to hold securities of small companies whose market
capitalization, subsequent to purchase, grows to exceed the upper range of the market capitalization of the Index, it may continue to treat them as small for the purposes of the 80% requirement. The Portfolio also may invest in securities of small
U.S. companies that derive, or are expected to derive, a significant portion of their revenues from their foreign
operations, although under normal circumstances not more than 15% of the Portfolio’s total assets will be
invested in securities of U.S. companies.
Because some emerging market countries may present difficulties
for efficient foreign investment, the Portfolio may use equity derivative securities to gain exposure to those countries.
Principal
Risks
The Portfolio is subject to numerous risks, any of which could cause an investor to lose money. The principal risks of the Portfolio are as follows:
Market Risk. The value of
investments in the Portfolio may fluctuate suddenly and unexpectedly as a result of various market and economic
factors, including those affecting individual companies, issuers or particular industries.
Currency Risk. Foreign currencies may experience steady or sudden devaluation relative to the U.S. dollar, adversely affecting the value of the Portfolio’s investments. Because the Portfolio’s net asset value is determined on the basis of
U.S. dollars, if the local currency of a foreign market depreciates against the U.S. dollar, you may lose money
even if the foreign market prices of the Portfolio’s holdings rise.
Foreign Investment Risk. Securities issued by foreign entities involve risks not associated with U.S. investments. These risks include additional taxation, political, economic, social or
diplomatic instability, and the above-mentioned possibility of changes in foreign currency exchange rates. There
may also be less publicly-available information about a foreign issuer. Such risks may be magnified with respect
to securities of issuers in frontier emerging markets.
Emerging and Frontier Market
Risk. Emerging and frontier market securities involve certain risks, such as exposure to economies less diverse and mature than that of the United States or more
established foreign markets. Economic or political instability may cause larger price changes in emerging or
frontier market securities than in securities of issuers based in more developed foreign countries. The smaller
size and lower levels of liquidity in emerging markets, as well as other factors, contribute to greater
volatility. Because of this volatility, this Portfolio is better suited for long-term investors.
Small Company Risk. The securities of
small companies have historically exhibited more volatility with a lower degree of liquidity than larger companies.
NAV Risk. The net asset value of
the Portfolio and the value of your investment will fluctuate.
Portfolio Performance
The following bar chart shows how the investment results of the Portfolio’s Investor Class shares have varied from year
to year. The table that follows shows how the average annual total returns of the Portfolio’s Investor
Class shares compare with a broad measure of market performance. Together, these provide an indication of the risks of investing in the Portfolio. How the Investor Class shares of the Portfolio have performed in the past (before and after taxes) is not necessarily an indication of how they
will perform in the future.
Updated
Portfolio performance information is available at www.hardingloevnerfunds.com or by calling (877) 435-8105.
International Small Companies Portfolio |
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The best calendar quarter return during the period shown above was 24.17% in the second quarter of 2020; the worst was -26.28% in the first quarter of 2020.
Average Annual Total Returns
(for the Periods Ended December 31, 2021)
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Harding Loevner International Small Companies Portfolio – Investor Class |
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Return After Taxes on Distributions1 |
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Return After Taxes on Distributions
and Sale of Portfolio Shares1 |
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MSCI All Country World ex-U.S. Small Cap (Net) Index (Reflects No Deduction for Fees, Expenses, or U.S. Taxes) |
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1After-tax returns in the table above are calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown, and after-tax returns shown
are not relevant to investors who hold their Portfolio shares through tax-deferred arrangements, such as 401(k) plans or Individual Retirement Accounts.
Management
Investment Adviser
Harding Loevner
serves as investment adviser to the Portfolio.
Portfolio Managers
Jafar Rizvi and
Anix Vyas serve as the portfolio managers of the International Small Companies Portfolio. Mr. Rizvi has held his
position since June 2011 and Mr. Vyas has held his position since April 2018. Messrs. Rizvi and Vyas are co-lead
portfolio managers.