Harbor Capital Launches Active International Compounders ETF: OSEA

Harbor Capital Advisors today launched a new active ETF focused on international companies with expected sustainable earnings growth to help drive compounded long-term wealth creation.

The Harbor International Compounders ETF (OSEA), listed September 8 on the NYSE, will pursue an actively managed strategy that seeks long-term growth of capital and invests primarily in equity securities of non-U.S. companies, including those located in emerging market countries. The new fund will be subadvised by C WorldWide Asset Management Fondsmaeglerselskab A/S.

OSEA is a compelling option as the Foreign Large Growth component of any well-diversified portfolio. The fund’s distinctive high-conviction portfolio and benchmark agnostic approach can provide advisors with the greater versatility needed given the volatility in today’s markets versus more broadly diversified funds that either track the index or take more conservative bets, according to Harbor. 

“The launch of the Harbor International Compounders ETF is another exciting addition to our suite of ETFs. It’s a great example of how we curate best-in-class boutique managers from across the World that can add value for our clients,” Kristof Gleich, president and CIO at Harbor Capital Advisors, said in a statement. “We are thrilled to partner with C WorldWide Asset Management Fondsmaeglerselskab A/S. Compared to recent history, the current market regime is very different for investors, making true alpha even more valuable. C WorldWide has generated exceptional returns going back to 1986 and we’re thrilled to bring them to U.S. based investors in a fully transparent ETF.”

“We’re excited to add expertise in overseas investing to Harbor Capital’s strategic investment solutions,” Bo Knudsen, CEO at C WorldWide, said in a statement. “Being part of their exclusive investment partnerships, we bring another distinct offer to the Harbor lineup, continuing their path as a leader in active fully transparent ETFs.”

The C WorldWide investment team seeks to identify what they believe to be high-quality companies with consistent recurring revenues, stable free cash flows, and sustainable returns on invested capital. In seeking to identify those companies for the fund’s portfolio, the investment team conducts qualitative assessments of companies, including, among other criteria, each company’s business model, management, and financial and valuation metrics, according to the firm.

With the fund being actively managed, OSEA is free from most benchmark and diversification constraints that other funds are subject to. This flexibility allows the team to embrace a long-term mindset when sourcing new ideas and can be patient while their growth thesis plays out, Harbor said. 

“Part of the research process also incorporates long-term top-down themes into stock selection such as deglobalization, climate change and infrastructure spending. These forward-thinking themes often don’t fit neatly into a benchmark or short-term market environment and require a patient approach as markets gyrate,” the firm said. “Combined with the benefits offered by the ETF wrapper such as possible lower fees, greater tradability, and tax efficiency than mutual funds, OSEA will be a welcome addition to the space for long-term oriented investors.”

C WorldWide’s investment approach is grounded in detailed fundamental research carried out by a highly experienced investment team, many of whom have worked together for decades, and their investment approach has several distinctive elements that Harbor believes will resonate with many investors, beginning with OSEA.

“As CWW looks to grow their presence in the U.S., the decision for Harbor and CWW to partner with this innovative strategy made perfect sense for both firms as advocates for active management,” Harbor said.

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