News & Commentary

Third Quarter Dividend Notice
September 26, 2013

Six of seven Harbor funds with dividend payable dates on September 26, 2013 made dividend distributions. The Harbor Commodity Real Return Strategy Fund did not make a dividend distribution in the third quarter.

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 third quarter 2013 for the Harbor Commodity Real Return Strategy Fund (which uses TIPS in its strategy). While this fund did not pay a dividend for the third quarter 2013, the fund may make a dividend distribution as well as short-term and/or long-term capital gain distributions 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.

If you have any questions about dividend distributions, please contact a Shareholder Services Representative at 800-422-1050, Monday through Friday, 8:00 a.m. to 6:00 p.m. Eastern time.