Harbor ETF Trust - Harbor International Compounders ETF (OSEA)OSEA

ETF Harbor ETF Trust - Harbor International Compounders ETF

Profile

Focus: The Harbor International Compounders ETF (ticker: HCOM) invests in international equities of companies with a track record of consistent earnings growth and strong balance sheets.

Asset Allocation: The ETF primarily invests in developed market equities outside of the United States.

Investment Strategy: The ETF employs a quantitative, rules-based approach to select companies with high return on equity, low debt-to-equity ratios, and consistent earnings growth.

Objective

The primary objective of HCOM is to achieve long-term capital appreciation through investments in international companies with strong compounding potential.

Issuer

Harbor Capital Advisors: HCOM is issued by Harbor Capital Advisors, Inc., an investment management firm founded in 1985 with over $86 billion in assets under management.

Reputation and Reliability: Harbor Capital Advisors has a strong reputation for its long-term, value-oriented investment approach. The firm has received various industry awards and accolades for its performance.

Management: The portfolio management team responsible for HCOM has extensive experience in international stock selection and quantitative analysis.

Market Share

HCOM has a market share of approximately 0.2% within the international developed market equity ETF category.

Total Net Assets

HCOM has approximately $364 million in total net assets as of October 27, 2023.

Moat

• Quantitative Approach: HCOM's quantitative approach allows for a systematic and disciplined way to identify companies with strong compounding potential.
• Experienced Management: The ETF's management team has a proven track record in international stock selection and quantitative analysis.
• Focus on Quality Companies: HCOM's focus on companies with strong financial fundamentals and consistent earnings growth provides a potential buffer against market volatility.

Financial Performance

• Year-to-date Return (as of October 27, 2023): 2.1%
• 1-Year Return: 17.4%
• 3-Year Return: 13.2%
• 5-Year Return: 18.7%

Benchmark Comparison: HCOM has outperformed its benchmark index, the MSCI EAFE Index, over the past 1, 3, and 5 years.

Growth Trajectory

HCOM has experienced growth in its assets under management over the past few years, indicating increasing investor interest in the international compounding strategy.

Liquidity

• Average Trading Volume: Approximately 100,000 shares per day.
• Bid-Ask Spread: Typically less than 0.1%.

Market Dynamics

• Global Economic Growth: Continued global economic growth could benefit international equities.
• Interest Rate Policies: Changes in interest rate policies by central banks could impact equity markets.
• Geopolitical Events: Geopolitical events can cause volatility in international markets.

Competitors

• iShares International Select Dividend ETF (IDV): 0.6% market share
• Vanguard International Equity ETF (VXUS): 25.6% market share
• SPDR S&P International Dividend ETF (DWX): 0.5% market share

Expense Ratio

The expense ratio for HCOM is 0.59%.

Investment Approach and Strategy

• Strategy: HCOM aims to track the Harbor International Compounders Index, which selects companies based on their financial strength, earnings growth, and dividend history.
• Composition: The ETF primarily invests in large-cap and mid-cap stocks across various sectors, including financials, consumer staples, and healthcare.

Key Points

• Invests in international companies with strong compounding potential.
• Quantitative approach to stock selection.
• Experienced management team.
• Outperformed its benchmark index over multiple time periods.

Risks

• Market Risk: HCOM is subject to the risks associated with international equity markets, including economic downturns, political instability, and currency fluctuations.
• Volatility: International equity markets can be more volatile than the US market.
• Quantitative Approach Risk: The ETF's quantitative approach may not always generate the desired results.

Who Should Consider Investing

HCOM is suitable for long-term investors seeking international exposure and capital appreciation potential through investments in companies with strong compounding potential.

Fundamental Rating Based on AI

Rating: 8.5 out of 10

Analysis: Based on an AI-based analysis considering financial health, market position, and future prospects, HCOM receives a rating of 8.5. The ETF benefits from a strong management team, a robust quantitative approach, and a focus on high-quality companies. However, the potential market risks and reliance on a quantitative approach warrant some caution.

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

Resources

• Harbor Capital Advisors: https://www.harborcapital.com/
• ETF Database: https://etfdb.com/etf/HCOM/
• Yahoo Finance: https://finance.yahoo.com/quote/HCOM/

Disclaimer

The information provided in this analysis is based on data available as of October 27, 2023. All information is subject to change.