Mutual Fund Summary Prospectus (497k)
February 28 2014 - 5:26PM
Edgar (US Regulatory)
Summary Prospectus
February 28, 2014
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Frontier Emerging Markets Portfolio
Investor Class
HLMOX
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Before you
invest, you may want to review the Funds prospectus, which contains more information about the Fund and its risks. You can find the Funds prospectus and other information about the Fund online at
www.hardingloevnerfunds.com/literature-forms-for-investing.html
. You can also get this information at no cost by calling (877) 435-8105 or by sending an e-mail request to
hardingloevnerfunds@ntrs.com. If you purchase shares of the Fund through a financial intermediary, the prospectus and other information will also be available from your financial intermediary. The current prospectus and statement of additional
information, dated February 28, 2014, are incorporated into this summary prospectus and may be obtained, free of charge, at the website, phone number or e-mail address noted above.
Investment Objective
The Frontier Emerging Markets Portfolio (the Portfolio) seeks long-term capital appreciation through investments in equity securities of companies based in frontier and smaller emerging
markets.
Portfolio Fees and Expenses
This table describes the fees and expenses that you may pay if you buy and hold shares of the Investor Class of the Portfolio.
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Shareholder Fees
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(fees paid directly from your investment)
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Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
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None
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Redemption Fee (as a percentage of amount redeemed within 90 days or less from the date of purchase)
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2.00%
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Annual Portfolio Operating Expenses
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(expenses that you pay each year as a percentage of the
value of your investment)
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Management Fees
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1.50%
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Distribution (12b-1) Fees
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0.25%
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Other Expenses
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0.89%
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Total Annual Portfolio Operating Expenses
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2.64%
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Fee Waiver and/or Expense Reimbursement
1
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-0.39%
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Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense
1
Reimbursement
1
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2.25%
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1
Harding
Loevner LP has contractually agreed to waive a portion of its management fee and/or reimburse the Investor Class of the Portfolio for its other operating expenses to the extent Total Annual Portfolio Operating Expenses, as a percentage of average
daily net assets, exceed 2.25% through February 28, 2015.
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Example
: This example is intended to help you compare the cost of investing in the Investor Class of the Portfolio with the cost of
investing in other mutual funds. The example assumes that you invest $10,000 in the Investor Class of the Portfolio for the time periods indicated and then redeem all of your shares at the end of those periods. The example also assumes that your
investment has a 5% rate of return each year and that the Investor Classs operating expenses remain the same, except that the example assumes that the fee waiver and expense reimbursement agreement pertains only through
February 28, 2015. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
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1 Year
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3 Years
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5 Years
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10 Years
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$228
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$783
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$1,365
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$2,945
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Portfolio Turnover
The Portfolio pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction
costs and may result in higher taxes when Portfolio shares are held in a taxable account. These costs, which are not reflected in annual portfolio operating expenses or in the Example, affect the Portfolios performance. During the most recent
fiscal year, the Portfolios portfolio turnover rate was 24% of the average value of its portfolio.
Principal Investment
Strategies
The Portfolio invests primarily in companies that are based in frontier emerging markets, including the smaller traditionally-
recognized emerging markets. Frontier emerging markets, with the exception of the oil-producing Gulf States and certain of the smaller traditionally-recognized emerging markets, tend to have relatively low gross national product per capita compared
to the larger traditionally-recognized emerging markets and the worlds major developed economies. The frontier emerging markets include the least developed markets even by emerging markets standards. Frontier emerging markets offer investment
opportunities that arise from long-term trends in demographics, deregulation, offshore outsourcing and improving corporate governance in developing countries. Harding Loevner LP (Harding Loevner), the Portfolios investment adviser,
undertakes fundamental research in an effort to identify companies that are well managed, financially sound, fast growing and strongly competitive, and whose shares are under-priced relative to their intrinsic value. To reduce its volatility, the
Portfolio is diversified across dimensions of geography, industry and currency. The Portfolio normally holds 50-200 investments across at least 12 countries.
As used herein, frontier emerging markets include countries that are represented in the MSCI Frontier Markets Index or the S&P Frontier Markets BMI, or similar market indices, and the smaller of the
traditionally-recognized emerging markets, such as those individually constituting less than 5% of the MSCI Emerging Markets Index or the S&P Emerging Markets BMI. Factors bearing on whether a company is considered to be based in a
frontier emerging market may include: (1) it is legally domiciled in a frontier emerging market; (2) it conducts at least 50% of its business, as measured by the location of its sales, earnings, assets, or production, in frontier emerging
markets; or (3) it has the principal exchange listing for its securities in a frontier emerging market. Frontier emerging markets generally include all countries except the developed markets of Australia, Austria, Belgium, Canada, Denmark,
Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand,
Frontier Emerging Markets Portfolio
Investor Class
HLMOX
Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States and the larger traditionally-recognized emerging markets of Taiwan, Korea, Mexico, South Africa,
Brazil, India, China and Russia. At least 65% of the Portfolios total assets will be denominated in at least three currencies other than the U.S. dollar. For purposes of compliance with this restriction, American Depositary Receipts, Global
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 traded.
The Portfolio invests at least 65% of its total assets in common stocks, preferred stocks, rights and warrants issued by companies that are based in the
frontier emerging markets, 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. The Portfolio also may invest in
securities of 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 Portfolios total assets will be invested
in securities of U.S. companies. The Portfolio may invest in short-term or other debt securities.
The Portfolio invests at least 80% of its
net assets (plus any borrowings for investment purposes) in frontier emerging market securities, and investment companies that invest in the types of securities in which the Portfolio would normally invest. This strategy is not fundamental, but
should the Portfolio decide to change this strategy, it will provide shareholders with at least 60 days prior written notice.
The
Portfolio may also invest in derivatives, including forward foreign currency exchange contracts and equity derivative securities such as participation notes; options on common stocks; and options, futures and options on futures on foreign common
stock indices. Because some emerging market countries do not permit foreigners to participate directly in their securities markets or otherwise present difficulties for efficient foreign investment, the Portfolio may use equity derivative
securities, and, in particular, participation notes, 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:
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Market Risk
: Investments in the Portfolio may lose value due to a general downturn in stock markets.
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Currency Risk
: Foreign currencies may experience steady or sudden devaluation relative to the U.S. dollar, adversely affecting the
value of the Portfolios investments. Because the Portfolios 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 Portfolios holdings rise.
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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 the foreign currency exchange rates.
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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.
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Frontier Emerging Market Risk
: Frontier emerging market securities involve unique 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 frontier emerging market securities than in securities of issuers based in more developed foreign
countries, including securities of issuers based in larger emerging markets. Frontier emerging markets generally receive less investor attention than developed markets and larger emerging markets.
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Participation Notes Risk
: Participation notes are designed to replicate the return of a particular underlying equity or debt
security, currency or market. Participation notes involve the same risks associated with a direct investment in the underlying security, currency or market. In addition, participation notes involve counterparty risk, because the Portfolio has no
rights under participation notes against the issuer(s) of the underlying security(ies) and must rely on the creditworthiness of the issuer of the participation note.
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Concentration Risk
: The Portfolio may invest up to 35% of its total assets in securities of companies in any one industry if, at the
time of investment, that industry represents 20% or more of the Portfolios benchmark index, currently the MSCI Frontier Emerging Markets Index. Accordingly, at any time the Portfolio has such a concentration of investments in a single industry
group, it will be particularly vulnerable to factors that adversely affect that industry group.
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NAV Risk
: The net asset value of the Portfolio and the value of your investment will fluctuate.
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Financial Services Sector Risk
: To the extent the Portfolio invests in securities and other obligations of issuers in the financial
services sector, the Portfolio will be vulnerable to events affecting companies in the financial services industry. Examples of risks affecting the financial services sector include changes in governmental regulation, issues relating to the
availability and cost of capital, changes in interest rates and/or monetary policy and price competition. In addition, financial services companies are often more highly leveraged than other companies, making them inherently riskier.
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Portfolio Performance
The bar chart shows how the Portfolios investment results have varied from year to year. The table that follows shows how the Portfolios Investor Class average annual total returns 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 of the Portfolio has performed in the past (before and after taxes) is not necessarily an indication
of how it will perform in the future.
Updated Portfolio performance information is available at
www.hardingloevnerfunds.com
or by calling (877) 435-8105.
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Summary Prospectus
February 28, 2014
The best calendar quarter return during the period shown above was 10.42% in the 1st quarter of 2012; the worst was
-15.70% in the 3rd quarter of 2011.
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Average Annual Total Returns
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(for the periods ended December 31, 2013)
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1-Year
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Since
Inception
12/31/10
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Frontier Emerging Markets Portfolio - Investor Class
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Return Before Taxes
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16.48%
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3.12%
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Return After Taxes on
Distributions
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16.48%
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3.05%
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Return After Taxes on Distributions and Sale of Portfolio Shares
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9.38%
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2.43%
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MSCI Frontier Emerging Markets (net) Index (reflects no deduction for fees, expenses, or
taxes)
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4.28%
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1.29%
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1
After-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 investors 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.
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Management
Investment Adviser
Harding Loevner serves as investment adviser to the Portfolio.
Portfolio Managers
Pradipta
Chakrabortty, G. Rusty Johnson, and Richard Schmidt serve as the portfolio managers of the Frontier Emerging Markets Portfolio. Messrs. Chakrabortty and Johnson have held their positions since December 2008 and Mr. Schmidt has held
his position since January 2012. Messrs. Chakrabortty and Johnson are the lead portfolio managers.
Purchase and Sale of Portfolio
Shares
The minimum initial investment in the Investor Class of the Portfolio is $5,000. Additional purchases may be for any amount. You may
purchase or redeem (sell) shares of the Portfolio on any business day through certain authorized brokers and other financial intermediaries or directly from the Portfolio by mail, telephone or wire.
Tax Considerations
The Portfolios distributions are generally taxable to you as ordinary income, capital gains, or a combination of the two, unless you are investing through a tax-deferred arrangement, such as a
401(k) plan or an individual retirement account. Upon withdrawal, your investment through a tax-deferred arrangement may become taxable.
Payments to Brokers-Dealers and Other Financial Intermediaries
If you purchase Portfolio shares through a broker-dealer or other financial intermediary (such as a bank), the Portfolio and its related companies may pay the intermediary for the sale of Portfolio shares
and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Portfolio over another investment. Ask your salesperson or visit your financial
intermediarys website for more information.
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Harding, Loevner Funds, Inc.
c/o Northern Trust
Attn: Funds Center C5S
801 South Canal Street
Chicago, IL 60607
www.hardingloevnerfunds.com
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