Harbor Mid Cap Value Fund Institutional Class (HAMVX)

Investment Strategy

The Fund invests primarily in equity securities, principally common stocks, of mid cap companies. Under normal market conditions, the Fund invests at least 80% of its net assets, plus borrowings for investment purposes, in securities of mid cap companies.

The Fund defines mid cap companies as those with market capitalizations that fall within the range of the Russell Midcap® Index, provided that if the upper end of the capitalization range of that Index falls below $15 billion, the Fund will continue to define those companies with market capitalizations between the upper end of the range of the Index and $15 billion as mid cap companies. As of December 31, 2018, the range of the Index was $365 million to $67.8 billion, but it is expected to change frequently.

The Subadviser looks to identify companies that it believes are out of favor and thus undervalued in the marketplace at the time of purchase and have the potential for appreciation. The Subadviser's active investment strategy uses a quantitative investment model to evaluate and recommend investment decisions for the Fund in a bottom-up, contrarian value approach. The primary components of the quantitative model are:

  • Indicators of fundamental undervaluation, such as low price-to-cash flow or low price-to-earnings ratios
  • Indicators of past negative market sentiment, such as poor past stock price performance
  • Indicators of recent momentum, such as high recent stock price performance
  • Control of incremental risk relative to the benchmark index

All such indicators are measured relative to the overall universe of mid cap companies.

The Subadviser utilizes its proprietary quantitative model to make its assessments and except in very limited circumstances follows the output of those models when making buy and sell decisions for the Fund's portfolio.

Risks

The value of securities selected using quantitative analysis can react differently to issuer, political, market, and economic developments than the market as a whole or securities selected using only fundamental analysis. The factors used in quantitative analysis and the weight placed on those factors may not be predictive of a security's value. In addition, any model may contain flaws or the model may not perform as anticipated.

Stocks of mid cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies.

Stock markets are volatile and equity values can decline significantly in response to adverse issuer, political, regulatory, market and economic conditions.