Harbor Capital’s large-cap growth ETF has handily outpaced the Russell 1000 Growth Index year to date in 2023. This demonstrates the potential strength of a distinct active approach.
The Harbor Long-Term Growers ETF (WINN) seeks to exploit market inefficiencies by investing in companies with underappreciated multiyear structural growth opportunities. This compelling methodology seeks to set itself apart from passive indexes in the large-cap growth space.
Traditional cap-weighted indexes are designed to continue to allocate to past winners, making them inherently backward-looking. In contrast, WINN is actively managed. This allows the Fund’s investment team to deliberately lean into concentration and potentially capture some opportunities outside of the purview of indexes.
Furthermore, Harbor’s large-cap growth ETF looks considerably different than its benchmark. The Fund holds 63 securities as of October 31, 2023, while the benchmark comprises 444 constituents. This clearly impacts the Fund’s sector allocation, which is an important consideration when considering growth strategies.
WINN’s Performance Enhancement
As of the end of October, WINN’s performance has been enhanced by its slight overweight to the healthcare sector versus the benchmark. The sector comprises 12.2% of WINN by weight, while the sector makes up 11.1% of the benchmark Russell 1000 Growth Index by weight, according to the Fund’s website.
Conversely, WINN’s lack of exposure to the utilities sector and its underweight to the consumer staples sector has supported the Fund’s performance. Avoiding the more value-tilted utilities and consumer staples sectors may be compelling for investors looking for pure growth exposure.
The design of Harbor’s active large-cap growth ETF combines bottom-up, fundamental research, and systematic portfolio construction. This thoughtful approach and distinct allocation choices could have added to the Fund’s recent outperformance over its benchmark.
Harbor’s Active Large-Cap Growth ETF: Performance
The Harbor Long-Term Growers ETF (WINN) is up 36.45% at NAV over a one-year period as of November 20, 2023. Meanwhile, the benchmark Russell 1000 Growth Index has climbed 30.15% during the same period.
Looking at the past month, as of November 20, 2023, WINN has climbed 11.81%. Similarly, the Russell 1000 Growth is up 9.99%.
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Investors should carefully consider the investment objectives, risks, charges and expenses of a Harbor fund before investing. To obtain a summary prospectus or prospectus for this and other information, visit harborcapital.com or call 800-422-1050. Read it carefully before investing.
All investments involve risk including the possible loss of principal. Please refer to the Fund’s prospectus for additional risks. For current standardized performance, fees, holdings, and important information: WINN
WINN: All investments involve risk including the possible loss of principal. There is no guarantee that the investment objective of the Fund will be achieved. Stock markets are volatile and equity values can decline significantly in response to adverse issuer, political, regulatory, market and economic conditions. At times, a growth investing style may be out of favor with investors which could cause growth securities to underperform value or other equity securities.
Since the Fund may hold foreign securities, it may be subject to greater risks than funds invested only in the U.S. These risks are more severe for securities of issuers in emerging market regions. A non-diversified Fund may invest a greater percentage of its assets in securities of a single issuer, and/or invest in a relatively small number of issuers. It is more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio.
Shares are bought and sold at market price not net asset value (NAV). Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times.
The weightings, holdings, industry, sector and/or countries mentioned may change at any time and may not represent current or future investments.
The Russell 1000® Growth Index is an unmanaged index generally representative of the U.S. market for larger capitalization growth stocks. This unmanaged index does not reflect fees and expenses and is not available for direct investment. The Russell 1000® Growth Index and Russell® are trademarks of Frank Russell Company.
The views expressed herein may not be reflective of current opinions, are subject to change without prior notice, and should not be considered investment advice.
Diversification does not assure a profit or protect against loss in a declining market.
Jennison Associates LLC is an independent subadvisor to the Harbor Long-Term Growers ETF.
This article was prepared as Harbor Funds paid sponsorship with VettaFI.
Foreside Fund Services, LLC is the Distributor of the Harbor ETFs.
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