Harvard Management Is Bullish on China, Mexico: From Alibaba Group Holding Ltd (BABA) To America Movil SAB de CV (ADR) (AMX)

Harvard Management Company is, as one might deduce from its name, a fully owned subsidiary of Harvard University. Ironically, the fund is run by a Yale grad, Jane Mendillo. The firm manages not only more than half a billion dollars in U.S. traded equities, but also Harvard University’s endowment, the largest academic endowment in the world, valued at more than $37.6 billion.

According to its latest 13F filing, the fund owned $514.2 million in equities as of June 30, and was mostly focused on financial stocks, which represented 52% of the portfolio’s total value. Also substantial was its exposure to information technology stocks, which accounted for roughly 23% of the portfolio. In this article, in particular, we will look into some bullish positions the fund held in Mexican and Chinese companies – as of the end of the second quarter of the year.

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JD.Com Inc(ADR) (NASDAQ:JD)

– Shares held by Harvard Management as of June 30: 336,871

– Value of Harvard Management’s stake as of June 30: $7.15 million

Although the number of hedge funds in our database long JD.Com Inc(ADR) (NASDAQ:JD) tumbled by more than 30% over the second quarter of 2016, as the stock lost more than 22% of its value. However, Harvard Management remained bullish, boosting its exposure by 15% over the period. Another fund that remained optimistic on the company was Andreas Halvorsen’s Viking Global, which disclosed ownership of 22.49 million shares as of June 30. Since the end of the second quarter, shares of JD.Com Inc(ADR) (NASDAQ:JD) have gained around 23% during the third quarter, largely driven by strong second-quarter results. Net revenue rose by 42% year-over-year, to approximately $9.8 billion, with revenue from services and other businesses up by 67% to $832.25 million. Gross profit also rose by 66% to $1.4 billion, while annual active customer accounts spiked by 65% to 188.1 million.

Fomento Economico Mexicano SAB (ADR) (NYSE:FMX)

– Shares held by Harvard Management as of June 30: 105,742

– Value of Harvard Management’s stake as of June 30: $9.78 million

Next up is Harvard Management’s stake in Fomento Economico Mexicano SAB (ADR) (NYSE:FMX), which remained unchanged over the second quarter, accounting for almost 2% of the portfolio’s total value. Even more bullish seemed Jim Simons’s Renaissance Technologies, which more than doubled its exposure to the stock between April and June, taking it to 479,000 shares.Shares of Fomento Economico Mexicano SAB (ADR) (NYSE:FMX) lost 4.25% in the second quarter, and inched down by 0.5% in the third quarter. However, the company last reported second-quarter EPS of roughly $0.74 per ADS, well above consensus of $0.66, while revenue also rose by 25.9% to approximately $5.22 billion, again beating estimates of $4.88 billion.

America Movil SAB de CV (ADR) (NYSE:AMX)

– Shares held by Harvard Management as of June 30: 890,923

– Value of Harvard Management’s stake as of June 30: $10.92 million

Same as its Mexican peer on the previous page, Harvard Management left its stake in America Movil SAB de CV (ADR) (NYSE:AMX) unchanged during the second quarter, but still became one of the fund’s top 10 positions. The largest position among the funds that we track was the one held by Ken Fisher’s Fisher Asset Management, which disclosed ownership of 11.4 million shares of the company as of June 30, up by 70% on the quarter. America Movil SAB de CV (ADR) (NYSE:AMX) had a terrible second quarter, with its stock down more than 21%. And, the third quarter hasn’t been much better, as the shares tumbled by another 7%. Recently, the company’s Board of Directors proposed a delisting from the NASDAQ and Latibex exchanges.

Baidu Inc (ADR) (NASDAQ:BIDU)

– Shares held by Harvard Management as of June 30: 130,166

– Value of Harvard Management’s stake as of June 30: $21.49 million

One of Harvard Management’s most bullish moves in the second quarter involved its stake in Baidu Inc (ADR) (NASDAQ:BIDU), which was increased by 69% during the second quarter. However, the firm’s position was quite small when compared to that of Harris Associates, which held 5.26 million shares, valued at almost $870 million by June 30.  Unlike America Movil, Baidu Inc (ADR) (NASDAQ:BIDU) has had a groovy third quarter, as its stock gained more than 10%. Recently, analysts at Deutsche Bank have reiterated their ‘Buy’ rating on the stock, boosting their price target from $182 to $219. According to our records, 56 funds among those we track were long the Chinese company as of the end of the first half of the year.

Alibaba Group Holding Ltd (NYSE:BABA)

– Shares held by Harvard Management as of June 30: 487,976

– Value of Harvard Management’s stake as of June 30: $38.8 million

Finally, there’s Alibaba Group Holding Ltd (NYSE:BABA), the largest equity (non-ETF) position in Harvard Management’s equity portfolio. After a 71% increase in exposure, the firm held 487,976 shares of the e-commerce behemoth. As one might expect, Alibaba was the most popular Chinese stock among the funds that we track, counting 69 funds holding shares as of June 30. Other bulls included Silver Lake Partners, with 16.36 million shares on June 30, and Ken Fisher’s Fisher Asset Management, with 3.22 million shares. Alibaba Group Holding Ltd (NYSE:BABA)’s stock has gained more than 30% year-to-date, and over 33% in the third quarter alone, surpassing its resistance level of $100. A couple of weeks ago, the company explained that it was not acquiring the remaining portion of its shares currently held by Yahoo! Inc. (NASDAQ:YHOO), due to the hefty U.S. tax implications. “If there was an easy tax solution someone would have figured it out already,” said executive vice chairman Joseph Tsai.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.