On Monday, Harbor Capital Advisors, Inc. (“Harbor”), a premier multi-manager investment firm offering access to specialized expertise across a range of investment strategies and vehicles, announced the launch of its first ETFs — the Harbor Scientific Alpha Income ETF (NYSE: SIFI) and the Harbor Scientific Alpha High-Yield ETF (NYSE: SIHY).
The Harbor Scientific Alpha Income ETF is an actively managed multi-sector fixed income strategy that seeks total return to provide competitive total returns and income to investors through employing a structured investment process that utilizes a proprietary model-based framework in the asset allocation and security selection of both investment-grade and below investment-grade (high-yield) bonds. Additionally, SIFI employs a tactical derivative overlay that provides a potential added source of returns. SIFI has an expense ratio of 0.50%.
The Harbor Scientific Alpha High-Yield ETF is an actively managed fixed income strategy that seeks total return to provide total returns in excess of its benchmark (ICE BofA US High Yield Index) through employing a structured investment process that utilizes a proprietary model-based framework in the security selection of below investment-grade (high-yield) bonds. SIHY has an expense ratio of 0.48%.
“Harbor is excited to launch its first-ever ETFs, providing advisers and investors more ways to access exclusive investment management solutions to help them achieve their long-term investment goals,” said Kristof Gleich, president and chief investment officer of Harbor.
BlueCove Limited (“BlueCove”), the subadviser to the new ETFs, is a scientific asset management firm founded in 2018 that brings together leading fixed income industry investment and engineering professionals, with the specific purpose of researching and developing state-of-the-art scientific investment processes applicable to fixed income investment management.
“As we continue to pursue vehicle agnostic solutions to meet our clients’ needs, we are excited to deliver greater choice to our investors. Partnering with a world-class boutique-like BlueCove is an excellent example of how we are moving to provide active, innovative, differentiated, and disruptive investment approaches that address the growing needs of our clients and investors,” said Gleich.
“We are pleased to partner with Harbor to introduce these two exciting ETFs to the marketplace. SIFI and SIHY offer cost-aware solutions to gaining access to differentiated, actively managed, and scientifically driven fixed income exposure in the multi-sector and high-yield bond categories,” said Alex Khein, co-founder and chief executive officer of BlueCove.
Key Features of Scientific Fixed Income Investing
Active scientific investing offers investors a clearly differentiated alternative to passive and traditional active discretionary strategies by benefiting from significant breadth and applying insights that are otherwise difficult to capture.
Active scientific investing:
- Can potentially improve returns by mitigating cognitive and behavioral biases that may compromise traditional discretionary investment strategies.
- Applies market-tested insights across a large set of instruments and markets.
- Harnesses large datasets to help create innovative sources of alpha.
- Applies modern portfolio construction techniques by targeting consistent risk-adjusted returns while mitigating transaction costs.
- Has the potential to offer low correlations to traditional discretionary strategies while helping remove unwanted market exposures.
- Allows for adaptation to changes in market behavior by transparently attributing performance.
For more information, visit HarborFunds.com.