News & Commentary

First Quarter 2012 Dividend Notice -- Update
March 29, 2012

Four of seven Harbor funds with dividend payable dates on March 29, 2012 made dividend distributions. The Harbor Commodity Real Return Strategy, Harbor Unconstrained Bond and Harbor Real Return funds did not make a dividend distribution.

All Harbor bond funds have total return or real return as the investment objective. Total return means the fund is seeking returns through a combination of interest income and short-term and long-term capital gains -- the total of which is expected to maximize returns to shareholders, consistent with the characteristics of the fund. Real return means the fund is seeking total returns that are protected against inflation, to the extent possible.

When yields on certain fixed income securities are very low, as they are currently on U.S. Treasury Inflation Protected Securities ("TIPS") and short-term investments due to government policies and other market factors, a fund may not have sufficient income in a quarter to pay a dividend. Such was the case in the first quarter 2012 for the Harbor Commodity Real Return Strategy Fund (which uses TIPS in its strategy), the Harbor Unconstrained Bond Fund, and the Harbor Real Return Fund. While these funds did not pay a dividend for the first quarter 2012, the funds are generating a total return and/or a real return year-to-date in 2012 and may make dividend distributions in subsequent quarters during the year. These funds could also make a distribution of short-term and/or long-term capital gains in December.

At Harbor Funds, and at most mutual fund families, capital gains are distributed only once per year, usually in December. Although any short-term and long-term capital gains are not distributed until December, funds generate net capital gains or losses throughout the year.

Investing in mutual funds involves risk. There can be no assurance that any fund will generate sufficient income to pay a dividend or short-term or long-term capital gains to distribute during the year. Past performance is no guarantee of future results.