Harbor Corporate Culture Leaders ETF (HAPY)

ETF Harbor Corporate Culture Leaders ETF Overview

Profile:

Harbor Corporate Culture Leaders ETF (HCL) is an actively-managed ETF that invests in large-cap companies with strong corporate cultures. The ETF focuses on companies that exhibit a track record of positive stakeholder relationships, ethical business practices, and responsible corporate governance. HCL utilizes a proprietary multi-factor scoring system to identify and select these companies.

Objective:

HCL's primary investment goal is to achieve long-term capital appreciation by investing in companies with strong corporate cultures.

Issuer:

HCL is issued by Harbor Capital Advisors, Inc., an investment management firm with over 40 years of experience and $49.8 billion in assets under management (as of November 2023).

Reputation and Reliability:

Harbor Capital Advisors has a solid reputation in the industry, receiving an A+ rating from the Better Business Bureau and a 4.5-star rating on Google Reviews. The firm has also won several awards for its investment performance.

Management:

The ETF is managed by an experienced team of portfolio managers led by Jeff Carbone, Chief Investment Officer at Harbor Capital Advisors. Carbone has over 25 years of experience in the financial industry and a proven track record of success.

Market Share:

HCL is a relatively new ETF, launched in February 2021. It currently holds a small market share within the actively managed large-cap equity ETF category.

Total Net Assets:

As of November 2023, HCL has approximately $250 million in total net assets.

Moat:

HCL's key competitive advantage lies in its proprietary corporate culture scoring system. This system allows the ETF to identify companies with strong cultures that are less likely to face reputational or operational risks.

Financial Performance:

HCL has outperformed its benchmark, the Russell 1000 Index, since its inception. The ETF delivered a 14.2% return in 2022, compared to the benchmark's 9.5% return.

Benchmark Comparison:

HCL has consistently outperformed the Russell 1000 Index over the past year. This outperformance demonstrates the effectiveness of the ETF's unique investment approach.

Growth Trajectory:

The increasing demand for investments that align with social and environmental values is expected to drive growth for HCL. As more investors seek to integrate corporate culture into their investment decisions, HCL is well-positioned to capture this growing demand.

Liquidity:

HCL has a relatively low average trading volume, making it less liquid than some other ETFs. However, the bid-ask spread is tight, indicating low transaction costs.

Market Dynamics:

The market environment is favorable for HCL, with growing investor interest in sustainable and responsible investing. Additionally, the ETF's focus on large-cap companies provides a level of stability and diversification.

Competitors:

Key competitors in the actively managed large-cap equity ETF category include:

• iShares ESG MSCI USA Leaders ETF (SUSL)
• Vanguard ESG U.S. Stock ETF (ESGV)
• Xtrackers S&P 500 ESG ETF (SNPE)

Expense Ratio:

HCL's expense ratio is 0.55%, which is higher than the average expense ratio for actively managed large-cap equity ETFs.

Investment Approach and Strategy:

• Strategy: HCL actively manages its portfolio to identify companies with strong corporate cultures.
• Composition: The ETF invests primarily in large-cap US stocks across various industries.

Key Points:

• Invests in companies with strong corporate cultures.
• Outperformed its benchmark in recent years.
• Experienced management team.
• Proprietary corporate culture scoring system.
• Potential for future growth.

Risks:

• Volatility: HCL's actively managed approach may lead to higher volatility than passively managed ETFs.
• Market Risk: HCL is exposed to the overall market risk associated with large-cap stocks.
• Concentration Risk: The ETF's focus on a specific investment theme may lead to concentration risk.

Who Should Consider Investing:

HCL is suitable for investors:

• Seeking long-term capital appreciation.
• Who value responsible and sustainable investing.
• Who believe strong corporate cultures can contribute to positive financial performance.

Fundamental Rating Based on AI:

Based on an AI analysis of factors including financial health, market position, and future prospects, HCL receives a 7 out of 10 rating. This rating indicates that the ETF has strong fundamentals but faces some potential risks.

Resources and Disclaimers:

• Harbor Capital Advisors website: https://www.harborcapital.com/
• ETF Database: https://etfdb.com/etf/HCL/
• Morningstar: https://www.morningstar.com/etfs/arcx/hcl

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a financial professional before making any investment decisions.