News & Commentary

View all Commentary headlines

Global Leaders Fund —
A strong quarter for global equities and economic growth
3rd Quarter, 2017
"Macro conditions in the third quarter had a positive impact on the share prices of our businesses. However, we believe business-specific factors and fundamentals will be the main drivers of investment results over the long-term. "
– Sands Capital Management, LLC

U.S. growth equities steamed ahead in the third quarter of 2017 amid robust earnings and low volatility. U.S. large cap growth in particular continued to outperform value, as consumer confidence has remained on an upward trend while the economy has continued to grow.
The macroeconomic picture in the global economy also appears healthy. The Organization for Economic Cooperation and Development (OECD) reported an expectation that all 45 countries that it tracks will grow this year—which, if it proves true, would be the first time that has occurred since 2007. Impressively, 33 countries are expected to accelerate their growth over the prior year.
The Harbor Global Leaders Fund advanced in the third quarter, returning 4.93%. The Fund underperformed its benchmark, the MSCI All Country World (ND) Index, which advanced 5.18%. The Consumer Discretionary and Health Care sectors were the largest detractors from relative results, due to stock selection and overweight allocations. On the positive side, stock selection and an overweight allocation in Information Technology, one of the better performing sectors in the benchmark for the quarter, also helped. On a country basis, stock selection made the United States the top detractor, whereas an overweight allocation and stock selection in China made a positive impact on relative performance. The Fund’s sector and country allocations, however, are purely a residual outcome of the bottom-up stock selection process.
Sands Capital Management’s comments were presented in an October, 2017 report. Highlights adapted from the report appear below. All comments relate to the quarter ended September 30, 2017, unless otherwise indicated. All references to the year-to-date are for the period January 1 through September 30, 2017.

Interview Highlights


A Favorable Macroeconomic Backdrop
Macro conditions in the third quarter had a positive impact on the share prices of our businesses. However, we believe business-specific factors and fundamentals will be the main drivers of investment results over the long-term. Through our fundamental, bottom-up approach, we believe that we have identified businesses that can grow through various economic and macro conditions. Over the long-term, we believe the businesses in our portfolio can create value for our investors through their strong fundamentals and capacity to generate above-average earnings.
Maintaining Our Long-Term Focus
Given the long-term and business-focused nature of our investment approach, we tend to not make calls on the direction of the market. Instead, we remain focused on the fundamental strengths and long-term growth prospects of our portfolio businesses, which are typically independent of macro events and/or conditions. We are optimistic about the growth prospects for our businesses. We believe they are positioned to deliver strong business results and earnings growth over our 5-year investment horizon.

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.

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.