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Global Leaders Fund —
New fund name reflects shift in strategy
1st Quarter, 2017

Please note: This commentary was provided by Marsico Capital Management, LLC, the subadviser to the Harbor Global Growth Fund. The Harbor Global Growth Fund was renamed the Harbor Global Leaders Fund with Sands Capital Management, LLC, as the subadviser effective March 1, 2017.

"We believe competitive advantage is perhaps the most critical element enabling a business to sustain leadership and growth. When it is found in an attractive business space, there is the potential for sustained wealth creation that compounds over many years. Our entire process is built around seeking these types of opportunities, and owning them for the long-term. "
– Sands Capital Management, LLC

As of March 1, 2017, Sands Capital Management, LLC began managing the Harbor Global Leaders Fund. Effective the same date, the Fund’s name changed from Harbor Global Growth Fund to Harbor Global Leaders Fund, to better reflect Sands Capital’s investment strategy. The Fund will continue to invest in global equities, but will focus on companies that Sands Capital Management believes are established business leaders in terms of products, services, or execution of their business strategy.
In managing the Fund, Sands Capital Management employs a bottom-up portfolio construction process that seeks to identify leading growth businesses that meet the following criteria: sustainable above-average earnings growth, a leadership position in a promising business space, significant competitive advantages, or a unique business franchise, clear mission and value-added focus, financial strength, and rational valuation relative to the market and business prospects. The Fund is a conviction weighted and concentrated portfolio, holding between 30 and 50 companies, and typically has a five year investment horizon.
Sands Capital Management believes the Fund should invest in companies that are capable of generating sustainable, above-average, and relatively stable rates of earnings per share growth and strong free cash flow. This focus typically leads to higher exposure to faster growing or more innovative areas of the global economy, such as Consumer Staples, Health Care, and Information Technology sectors, and lower exposure to more cyclical and commoditized sectors, such as Energy, Materials, and Financials.
Sands Capital Management’s comments were presented in an April 2017 report. Highlights adapted from the report appear below. All comments relate to the quarter ended March 31, 2017, unless otherwise indicated. All references to the year-to-date are for the period January 1 through March 31, 2017.

Interview Highlights

A Focus on Long-Term Business Growth Fundamentals
Over the long-term, we believe growth fundamentals will drive stock price appreciation. It is therefore critical that we conduct in-depth research to understand the underlying growth fundamentals of the businesses in which we invest. By using our six investment criteria, we conduct extensive primary research and due diligence to understand the long-term earnings potential and the value in investing in the business. Companies with the ability to drive sustained and relatively stable long-term earnings growth are often key innovators or vital facilitators in promising business spaces. We believe they are leading their industries with quality products and services that are ubiquitous to consumers, are able to grow through various economic conditions, and are forging the future of their industries with their innovation. They also maintain large market share positions or are taking market share from competitors, and are establishing wide and resilient competitive moats. In our view, our long-term investment horizon provides us the ability to capture the benefit of these characteristics and realize the ultimate earnings power of a company, while weathering share price volatility over shorter periods. We believe investing in companies that we deem are high quality, leading businesses through our process allows us to provide our clients wealth creation opportunities over the long-term.
Bottom-Up Approach to Portfolio Construction
We seek high-quality, long growth duration businesses, regardless of geography, industry, or benchmark weights. U.S. companies comprise between 50 and 60 percent of the portfolio, and the remainder is split between non-U.S. developed and emerging markets, with a stronger tilt towards developed non-U.S. markets. Our portfolio’s geographic composition is primarily driven by our bottom-up approach; as a result, we anticipate the weights and exposures will fluctuate over time. For sector exposures, as we employ a bottom-up approach to seeking companies with sustainable, above-average earnings growth, the majority of our portfolio will typically have strong exposure to faster growing industries within the Information Technology, Health Care, and Consumer Staples sectors.
An Optimistic Long-Term Outlook
We are optimistic about the growth prospects of the individual companies in our portfolio. We believe these companies are positioned to deliver strong business results and earnings growth over our five year investment horizon. We believe their growth is driven by strong fundamentals that will persist for long durations and through various economic environments. In our view, their fundamentals and earnings power are supported by their innovation and deep competitive advantages, which we believe will enable them to strengthen or maintain their leadership position.

Performance data shown represents past performance, which is no guarantee of future results. Current performance may be higher or lower than the past performance data shown. Investment returns and the value of an investment will fluctuate, and an investor's shares, when sold, may be worth more or less than their original cost. You can obtain performance data current to the most recent month-end (available within seven business days after the most recent month-end) by calling 800-422-1050 or visiting

Performance figures discussed reflect that of the institutional class shares.

The views expressed herein are those of the portfolio manager at the time of the interview and may not be reflective of their current opinions or future actions.  These views are not necessarily those of the fund company and should not be construed as such.

This information should not be considered as a recommendation to purchase or sell a particular security and the holdings or sectors mentioned may change at any time and may not represent current or future investments.