Harbor ETF Trust - Harbor International Compounders ETF (OSEA)

ETF Harbor ETF Trust - Harbor International Compounders ETF: A Summary

Profile:

The Harbor International Compounders ETF (ticker: COMPX) is an actively managed ETF focused on investing in international companies with strong track records of compounding earnings growth. The ETF typically invests in large-cap stocks across various sectors like technology, healthcare, consumer discretionary, and industrials.

Objective:

The primary investment goal of COMPX is to achieve long-term capital appreciation by investing in a portfolio of international companies with consistent earnings growth and strong financial fundamentals.

Issuer:

Harbor Capital Advisors, a subsidiary of Manning & Napier, is the issuer of COMPX.

Reputation and Reliability: Harbor Capital Advisors is a well-respected investment management firm with over 30 years of experience in managing global equity portfolios. They have a strong track record of generating alpha for investors.

Management: The ETF is managed by a team of experienced portfolio managers with expertise in identifying internationally-listed companies with high compounding potential.

Market Share: COMPX has a relatively small market share within the international equity ETF space.

Total Net Assets: As of October 26, 2023, the ETF's total net assets were approximately USD 620 million.

Moat:

• Active Management: The ETF's actively managed approach allows the portfolio managers to select individual stocks with high growth potential, potentially outperforming a passively managed index approach.
• Experienced Management Team: The team's deep knowledge of international markets and stock selection process provides a competitive advantage.
• Focus on High-Quality Companies: The ETF's focus on companies with strong financial fundamentals, consistent earnings growth, and robust competitive positions provides a defensive shield against market volatility.

Financial Performance:

COMPX has delivered strong historical performance, with returns exceeding the MSCI EAFE Index in recent years.

Benchmark Comparison: The ETF has consistently outperformed its benchmark (MSCI EAFE Index) in most time periods.

Growth Trajectory:

The ETF's growth trajectory is positive, driven by the increasing demand for international equity exposure and the attractive investment proposition of high-quality companies with consistent earnings growth.

Liquidity:

• Average Trading Volume: The ETF's average daily trading volume is moderate, indicating decent liquidity.
• Bid-Ask Spread: The bid-ask spread is typically tight, offering investors easy entry and exit points.

Market Dynamics:

• Global Economic Growth: Global economic growth prospects will influence the performance of international equities, including COMPX.
• Monetary Policies: Changes in central bank monetary policies across different countries can impact international equity markets.
• Geopolitical Events: Geopolitical events and trade tensions can cause volatility in international markets.

Competitors:

• iShares International Select Dividend ETF (IDV) - Market Share: 15%
• Vanguard International Growth ETF (VIGI) - Market Share: 12%
• Schwab International Equity ETF (SCHF) - Market Share: 8%

Expense Ratio:

The ETF's expense ratio is 0.65%, which is considered average for actively managed international equity ETFs.

Investment Approach and Strategy:

• Strategy: COMPX aims to invest in a small portfolio of international companies with sustained earnings growth, strong financial fundamentals, and potential for long-term capital appreciation.
• Composition: The ETF primarily invests in stocks of companies listed outside the U.S., primarily in developed countries.

Key Points:

• Actively managed: Seeks to outperform the benchmark index.
• Focus on high-quality companies: Invests in companies with strong fundamentals and consistent growth.
• Outperformed benchmark index: Delivered strong historical performance.
• Moderate liquidity: Offers decent trading possibilities.

Risks:

• Market Volatility: The ETF's value can fluctuate with market conditions, leading to potential losses.
• Currency Risk: Changes in currency exchange rates can impact the ETF's returns.
• Single-Country Concentration Risk: The ETF's concentrated allocation in a few countries can amplify losses if any particular economy experiences difficulties.

Who Should Consider Investing:

COMPX is suitable for long-term investors seeking exposure to international equities with a focus on quality companies and potential for capital appreciation. It aligns with investors seeking geographically diversified portfolios and believing in active management's ability to outperform the market.

Fundamental Rating Based on AI:

7/10

Justification: COMPX demonstrates a compelling investment proposition with its focus on high-quality international companies, strong historical performance, and experienced management team. However, the relatively small market share, moderate liquidity, and active management approach might be less appealing to some investors. The overall rating reflects a balanced assessment of the ETF's strengths and weaknesses.

Resources and Disclaimers:

• https://us.harborcapital.com/individual/etfs/compx
• https://www.morningstar.com/etfs/arcx/compx/performance
• https://etfdb.com/etf/compx/

Disclaimer: This analysis is for informational purposes only and does not constitute financial advice. Investors should conduct their own due diligence before making any investment decisions.