Harbor Small Cap Value Opportunities Fund Institutional Class (HSOVX)

Investment Strategy

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

The Fund defines small cap companies as those with market capitalizations that fall within the range of the Russell 2000® Index, provided that if the upper end of the capitalization range of that Index falls below $2.5 billion, the Fund will continue to define those companies with market capitalizations between the upper end of the range of the Index and $2.5 billion as small cap companies. As of December 31, 2018, the range of the Index was $8 million to $6.2 billion, but it is expected to change frequently.

The Subadviser employs a fundamental bottom-up, research intensive investment process to identify approximately 60 to 70 companies toownin the Fund. The Subadviser invests in companies that it believes possess sustainable business models supported by:

  • Strong competitive positions,
  • Solid financial health,
  • Capable management teams, and/or
  • Attractive positioning in their industries

The Subadviser seeks to invest in these types of companies at attractive valuation levels, typically below the Subadviser's estimate of their long-term intrinsic value. The Subadviser attempts to identify value drivers that will cause the value of the company to appreciate towards the intrinsic value.

The Fund's sector weightings are a result of the Subadviser's bottom-up stock selection process. A holding may be sold if it becomes fully valued, its fundamentals deteriorate, more attractive opportunities are identified, value drivers are realized, or value drivers are delayed beyond its investment horizon, as determined by the Subadviser.

The Fund may invest up to 10% of its total assets in the securities of foreign issuers.


Stocks of small 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