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Asset manager Harbor Capital Advisors is expanding its footprint with four new exchange-traed funds that will be managed by the firm’s longtime collaborator EARNEST Partners—the Harbor Mid Cap Value ETF (EPMV), the Harbor SMID Cap Value ETF (EPSV), the Harbor Mid Cap Core ETF (EPMB) and the Harbor SMID Cap Core ETF (EPSB).
Investors can expect to see subadvisor EARNEST’s emphasis on strong balance sheets, consistent free cash flow and disciplined capital allocation, according to the press release—all traits that are especially attractive during times of market uncertainty like we’re seeing now.
“Uncertainty doesn’t obscure what matters—it reveals it. In periods of volatility, the traits that drive enduring performance become unmistakably clear,” EARNEST CEO Paul Viera said in a statement shared in the release. “At EARNEST Partners, we focus on those keystone traits—resilient business models, strong capital discipline, and long-term decision-making. That focus has made a tremendous difference for our clients and for us.”
New ETFs: EPMV, EPSV, EPMB & EPSB
EPMV offers investors access to “a contrarian approach to mid-cap value investing,” Harbor Capital’s site says. It seeks to identify companies that demonstrate strong business fundamentals, such as revenue growth, strong profit margins, manageable debt and strong cash flow, and earnings prospects that are “not recognized by the market as a whole and therefore not reflected in the companies’ current market valuations,” according to the prospectus.
EPMB also invests in mid-cap companies, but instead of focusing on value investing it focuses on “high-conviction mid-cap equity.”
EPSB uses a similar disciplined approach to identify U.S. small- and mid-capitalization (SMID) companies, as does EPSV but with a focus on value investing.
“Today’s environment is as uncertain as any I can remember," Kristof Gleich, president and CIO of Harbor Capital, told etf.com. "One principle of investing that is timeless is diversification. We aim to help clients build better, stronger and more resilient portfolios through high quality active management. We believe EARNEST Partners’s proven long-term alpha generation married with today’s near historical high index concentration and uncertainty bodes well for future returns. The era of disinflationary rising tides lifting all passive boats is over."
"Additionally," he added, "EARNEST's commitment to quality holdings at attractive valuations has enabled them to outperform across various market cycles and investment styles. We believe their emphasis on downside protection and minimizing downside deviation reduces the likelihood of underperforming the benchmark. We feel these new ETFs are well-positioned to succeed during uncertain and volatile times.”