Harbor Long-Term Growers ETF (WINN)

Long-Term Thinking

Harbor’s longest serving subadvisor is Jennison Associates, a partnership that has lasted more than 40 years, which exemplifies the long-term orientation taken at both Harbor and Jennison.

That long-term mindset is also evident in Jennison’s investment process. The firm’s experienced and long-tenured team of portfolio managers and industry analysts conducts detailed bottom- up research in an effort to identify attractive companies that they believe they can hold for years. These long-term growers, in Jennison’s view, typically possess the following characteristics:

• Structural competitive advantage
• Industry leadership and innovation
• Strong cash flow generation and reinvestment
• Balance sheet strength
• Experienced leadership with the ability to execute on attractive business opportunities

Why WINN

Harbor’s newest partnership with Jennison is Harbor Long-Term Growers ETF (WINN). WINN is an actively managed ETF that offers exposure to the investment ideas embodied in Jennison’s flagship large‐cap growth strategies, as well as additional investment opportunities from Jennison’s other growth strategies. It is built on the same successful large-cap growth foundation as that of the Harbor Capital Appreciation Fund, but expands the opportunity set further to provide your clients with additional alpha opportunities.

WINN employs a proprietary combination of Jennison’s bottom-up, fundamental research and systematic portfolio construction. Jennison’s seasoned team of investors selects stocks of U.S. large- and mid-cap companies that they believe have compelling prospects for long-term growth. Those names are then systematically constructed into a portfolio that provides the desired characteristics and risk exposures. This systematic portfolio optimization tool incorporates the investment team’s fundamental growth insights, considering diversification and liquidity risk.

Because the strategy is offered via an ETF, it may hold appeal for tax-sensitive growth investors. The growth universe has become populated with more secular, rather than cyclical, growth opportunities which can lend itself to taking a longer‐term (lower turnover) approach. Over time, growth-oriented approaches can lead to significant embedded gains in a mutual fund, which may then be distributed to investors as those gains are realized. However, because of ETFs tax efficient properties, annual capital gains distributions tend to be much lower, which makes ETFs potentially more attractive for incremental allocations to growth going forward.

Why Now

Given subdued U.S. GDP and S&P 500 EPS (earnings per share) growth expectations for 2023, investors have sought companies with stronger growth profiles during the year. This is a climate that favors Jennison’s fundamental, long-term approach.

As economic growth decelerates, WINN’s investment team anticipates that S&P 500 EPS growth will decline to more normalized levels. Importantly, periods of normalized S&P 500 EPS growth have historically favored WINN’s investment style, as well as growth equities.

Within a backdrop of elevated volatility, bottom-up fundamental research and active security selection are increasingly important. WINN enables investor access to Jennison’s seasoned large-cap growth team and their time-tested philosophy and approach, all within a fully transparent ETF offering enhanced liquidity and tax-efficiency.

Important Information

Investors should carefully consider the investment objectives, risks, charges and expenses of a Harbor fund before investing. To obtain a summary prospectus or prospectus for this and other information, visit harborcapital.com or call 800-422-1050. Read it carefully before investing.

WINN: All investments involve risk including the possible loss of principal. There is no guarantee that the investment objective of the Fund will be achieved. Stock markets are volatile and equity values can decline significantly in response to adverse issuer, political, regulatory, market and economic conditions. At times, a growth investing style may be out of favor with investors which could cause growth securities to underperform value or other equity securities. Since the Fund may hold foreign securities, it may be subject to greater risks than funds invested only in the U.S. These risks are more severe for securities of issuers in emerging market regions. A non-diversified Fund may invest a greater percentage of its assets in securities of a single issuer, and/or invest in a relatively small number of issuers, it is more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio.

Shares are bought and sold at market price not net asset value (NAV). Market price returns are based upon the closing composite market price and do not represent the returns you would if you traded shares at other times.

Alpha is a measure of risk (beta)-adjusted return. Earnings per Share (EPS) is the portion of a company’s profit allocated to each outstanding share.

Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.

ETFs are subject to capital gains tax and taxation of dividend income. However, ETFs are structured in such a manner that taxes are generally minimized for the holder of the ETF. An ETF manager accommodates investment inflows and outflows by creating or redeeming “creation units,” which are baskets of assets. As a result, the investor usually is not exposed to capital gains on any individual security in the underlying portfolio. However, capital gains tax may be incurred by the investor after the ETF is sold.

Harbor Funds Distributors, Inc. is the Distributor of the Harbor Mutual Funds

Foreside Fund Services, LLC is the Distributor of the Harbor ETFs.

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