For this episode of ETF 360, ETF Trends’ CEO Tom Lydon speaks with Steve Cook, managing director at Harbor Capital Advisors, about the company’s entrance into the ETF industry and its recent launch of an inflation-focused ETF.
Harbor Capital began as a mutual find firm over 35 years ago and has a long history of finding asset managers that are positively positioned to deliver alpha for clients, Cook explains. Its transition into the ETF space was based on the needs of investors and advisors in accessing strategies, particularly those within active management.
“We really looked at the changing nature of the advisory market and how investors access active management and recognized the need to be more vehicle agnostic,” Cook says.
Last year, Harbor Capital launched its first two ETFs, the Harbor Scientific Alpha Income ETF (SIFI) and the Harbor Scientific Alpha High-Yield ETF (SIHY), which provide access to the fixed income space. However, with inflation also top of mind, Harbor wanted to make an option focused entirely on inflation. The company created the All-Weather Inflation Focus Index in conjunction with Quantix Commodities LP, which brought years of experience within commodities to the table.
“We try and deliver different solutions for investors that they may not be getting or they need access to,” Cook says. “We surveyed the marketplace and said: ‘Is there a product out there that is specifically designed to help investors with the inflation problem?'”
Harbor felt that the funds offered in markets weren’t targeting inflation as effectively as they could, as most were based on commodity indexes that weren’t created to address inflation specifically. In February of this year, Harbor launched the Harbor All-Weather Inflation Focus ETF (HEGR), a fund seeking to address the two different types of inflation that can occur: that which is driven by scarcity and demand that which is driven by debasement of currency.
“If we’re experiencing inflation as a result of scarcity, HEGR can be a solution; if we’re experiencing inflation involving debasement, HEGR can dynamically change its focus and add more gold to its allocations and thereby protecting investors in a number of different regimes,” Cook explains.
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