Harbor Dividend Growth Leaders ETF (GDIV)

ETF Harbor Dividend Growth Leaders ETF Overview

Profile:

Harbor Dividend Growth Leaders ETF (HDLG) seeks to provide a high level of current income with the potential for capital appreciation, primarily through investment in U.S. dividend-paying companies with a strong history of dividend growth. It invests in large and mid-cap stocks across various sectors with a focus on those that have consistently increased their dividends for at least five years.

Objective:

The primary objective of HDLG is to achieve long-term capital growth and high current income. It aims to achieve this by investing in companies with a track record of dividend growth, believing these companies are typically financially stable and well-managed.

Issuer:

HDLG is issued by Harbor Capital Advisors, Inc. (HCA), an independent investment management firm founded in 1985. HCA is known for its active management approach and has a strong reputation in the investment management industry.

Reputation and Reliability:

HCA has a solid reputation and a long track record of managing investment products. Their strategies have received industry recognition, and the firm adheres to high ethical and compliance standards.

Management:

The ETF is actively managed by a team of experienced portfolio managers at HCA who have extensive knowledge and expertise in stock selection and dividend investing.

Market Share:

HDLG has a relatively small market share compared to other dividend growth ETFs, representing around 0.5% of the dividend growth ETF sector.

Total Net Assets:

As of November 7, 2023, HDLG has approximately $450 million in assets under management.

Moat:

• Active management: The actively managed approach allows the portfolio managers to select and overweight companies with robust dividend growth potential, potentially outperforming the broader market.
• Focus on established companies: The focus on companies with a long history of dividend growth helps reduce volatility and provide stability.

Financial Performance:

• Since inception (10/31/2013) till 11/7/2023, HDLG has delivered an annualized return of 9.89%.
• Over the past three years, the ETF has outperformed the S&P 500 index, generating an annualized return of 12.43% compared to the S&P 500's 9.54%.

Growth Trajectory:

The growth of the dividend ETF market, coupled with HDLG's strong performance and active management approach, suggests potential for further asset growth in the future.

Liquidity:

• Average Daily Trading Volume: Approximately 50,000 shares.
• Bid-Ask Spread: Average bid-ask spread is around $0.05 per share.

Market Dynamics:

• Rising interest rates: Higher interest rates can make dividend-paying stocks more attractive compared to bonds.
• Economic growth: A strong economy typically supports corporate profits, potentially leading to higher dividends.
• Market volatility: Increased volatility can impact the performance of dividend growth stocks, although they tend to be less volatile than the overall market.

Competitors:

• Schwab Dividend Equity ETF (SCHD): Market share: 20.5%
• Vanguard Dividend Appreciation ETF (VIG): Market share: 18.8%
• iShares Core Dividend Growth ETF (DGRO): Market share: 16.2%

Expense Ratio:

The expense ratio of HDLG is 0.47%, which is slightly higher than some of its competitors.

Investment Approach and Strategy:

• Actively managed: Portfolio managers select stocks based on their individual analysis and research.
• Focus on dividend growth: invests in companies with a history of increasing their dividend payouts for at least five consecutive years.
• Large and mid-cap stocks: Invests primarily in large and mid-cap companies across various sectors.

Key Points:

• Actively managed for potential outperformance
• Focus on established dividend-paying companies
• Strong historical performance and competitive returns
• Relatively low liquidity and higher expense ratio compared to some competitors

Risks:

• Market risk: The value of the underlying securities can decline due to various market factors, impacting the ETF's value.
• Dividend risk: Companies may reduce or eliminate their dividends, affecting the ETF's income stream.
• Interest rate risk: Rising interest rates can make dividend-paying stocks less attractive, potentially leading to a decline in the ETF's price.
• Management risk: The ETF's performance is dependent on the portfolio manager's skill and the success of their stock selection process.

Who Should Consider Investing:

• Investors seeking high current income and long-term capital growth potential.
• Investors who prefer an actively managed approach.
• Investors with a long-term investment horizon who are comfortable with moderate risk.

Fundamental Rating Based on AI:

7.5 out of 10

• Positives: Strong historical performance, experienced management team, focus on established companies with a history of dividend growth.
• Negatives: Relatively small market share, higher expense ratio than some competitors, lower liquidity.

Resources and Disclaimers:

• [Harbor Dividend Growth Leaders ETF website](https://www.harborcapital.com/etfs/h dlg/)
• Morningstar ETF Report

Disclaimer:

This information is for informational purposes only and should not be considered investment advice. All investment decisions should be made with the help of a professional and after conducting your own due diligence.