In order to ready the Fund for liquidation, the Fund's portfolio of investments will be transitioned prior to the planned liquidation date to one that consists of all or substantially all cash, cash equivalents and debt securities with remaining maturities of less than one year. As a result, shareholders should no longer expect that the Fund will seek to achieve its investment objective.
The Harbor Unconstrained Bond Fund is subadvised by Pacific Investment Management Company LLC (PIMCO). The Fund seeks to invest at least 80% of its net assets in a diversified portfolio of fixed income instruments. In order to achieve its investment objectives, the Subadviser will utilize various investment strategies, and the Fund will not be constrained by management against an index. The average portfolio duration of this Fund will normally range from -3 years to 8 years based on the Subadviser's forecast for interest rates.
The Fund may invest up to 40% of its total assets in below investment-grade or high-yield securities or up to 50% in securities and instruments that are economically tied to emerging market countries.
Employing an unconstrained investment approach, the Fund may be exposed to certain types of securities, credit qualities, maturities, countries and regions not reflected in other fixed income indices. For example, high-yield, or below investment-grade, securities carry a higher degree of credit risk, and may be speculative and more volatile. Investing in emerging markets may entail risk due to foreign economic and political developments. Also, foreign currency exposure can entail significant volatility, and this may be amplified with the currencies of developing countries. As a result, investors considering an investment in the Fund should be prepared to accept significant volatility in the Fund's performance, particularly over shorter time periods, due to the unconstrained nature of the Fund's investment approach.
As of Quarter Ended 06/30/2016
YTD 1 Year 5 Year 10 Year Since Inception 0.78% -1.64% 1.90% N/A 2.12%
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 www.harborfunds.com.
The Harbor Funds performance shown assumes the reinvestment of dividend and capital gain distributions and is net of management fees and expenses. Returns for periods less than one year are not annualized.
From time to time, certain fees and/or expenses have been voluntarily or contractually waived or reimbursed, which has resulted in higher returns. Without these waivers or reimbursements, the returns would have been lower. Voluntary waivers or reimbursements may be applied or discontinued at any time without notice. Only the Board of Trustees may modify or terminate contractual fee waivers or expense reimbursements.
The Barclays U.S. Aggregate Bond Index is an unmanaged index of investment-grade fixed-rate debt issues with maturities of at least one year. This unmanaged index does not reflect fees and expenses and is not available for direct investment.
The BofA Merrill Lynch US Dollar 3-Month LIBOR Constant Maturity Index tracks the performance of a synthetic asset paying Libor to a stated maturity. The index is based on the assumed purchase at par of a synthetic instrument having exactly its stated maturity and with a coupon equal to that day's fixing rate. That issue is assumed to be sold the following business day (priced at a yield equal to the current day fixing rate) and rolled into a new instrument.
The Harbor Unconstrained Bond Fund received a 3-star Overall Morningstar Rating™ as of 06/30/2016 out of 240 Nontraditional Bond funds. Unconstrained Bond Fund was rated 3-star among 163, -star among , and 0-star among 0 domestic Nontraditional Bond funds for the three-, five- and ten-year periods ended 06/30/2016, respectively. The Morningstar Rating is for the Institutional share class only; other classes may have different performance characteristics.
For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar risk-adjusted return measure that accounts for variations in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics.
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