Harding Loevner global portfolio manager Rick Schmidt isn’t afraid of the heat.
When Mexico had “big problems post-election,” Harding Loevner bought its first stock in Mexico, Schmidt told ThinkAdvisor.
“It’s just having the discipline to implement your beliefs when things are a little scary, and we took a little heat owning Mexico at that time,” he added. “A similar story in emerging markets, we bought Russia when the sanctions were coming on. Both of those have worked out — some a little quicker, but that’s the approach we’re taking.”
Schmidt is a co-manager on Harding Loevner Global Equity (HLMVX), which has a 4-star Morningstar rating and nearly $924 million in assets; Harding Loevner Emerging Markets (HLEMX), which has a 4-star Morningstar rating and $3.6 billion in assets; and Harding Loevner Frontier Emerging Markets (HLMOX), which has a 3-star Morningstar rating and more than $420 million in assets. The emerging markets fund soft-closed at the end of June 2016.
So, what was Harding Loevner’s first stock in Mexico? Grupo Televisa.
Grupo Televisa operates cable and direct-to-home satellite pay television system in Mexico. It distributes content it produces through broadcast channels and through pay-TV brands and television networks, and cable operators.
“Television in Mexico is still very important, and the system is a bit like the U.S. in the ’50s, maybe the ’30s, when … the studios controlled the artists,” Schmidt said. “They’ve learned from what’s going on in the U.S. and they’re building out a cable network.”
Prior to buying, Harding Loevner’s analysts had covered Grupo Televisa for around 10 years, according to Schmidt. The firm had “never bought it because we didn’t think it was attractively priced,” he added.
Any business Harding Loevner invests in has to be covered by analysts. So there are a lot of businesses that Harding Loevner covers but doesn’t invest in.