News & Commentary

First Quarter 2014 Dividend Notice
March 27, 2014

Three of seven Harbor funds with dividend payable dates on March 27, 2014 made dividend distributions. Harbor Commodity Real Return Strategy Fund, Harbor Unconstrained Bond Fund, Harbor Real Return Fund and Harbor Emerging Markets Debt Fund did not make a dividend distribution in the first 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 first quarter 2014 for the aforementioned Harbor funds. While these funds did not pay a dividend for the first quarter 2014, the funds may make a dividend distribution in the following quarters as well as short-term and/or long-term capital gain distributions at year end.

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, please call Harbor Shareholder Services at 800-422-1050, Monday through Friday, from 8:00 a.m. to 6:00 p.m. Eastern time.