Harbor Capital has launched a purpose-driven ETF for investors looking to capitalize on the financial outcomes of companies that foster workplaces where employees are valued and motivated, driving equity value.
The Harbor Corporate Culture Leaders ETF (HAPY), listed on the NYSE on February 24 with an expense ratio of 50 basis points, will use data from Irrational Capital to invest in companies based on their Human Capital Factors. According to the firm, the strategy is timely and relevant to a marketplace that is increasingly focused on socially conscious investing and products driving tangible impact.
“Social measures like corporate culture tend to be under-represented in sustainable investing,” Harbor said. “Despite business leaders often citing employees as their most important asset, human capital is difficult to measure quantitatively. Using Irrational Capital’s thoughtful approach to quantifying this “Human Capital Factor,” the portfolio aims to provide exposure to those companies that best foster the employee/employer relationship.”
For advisors who do not specifically allocate to ESG but are open to socially conscious options, the strategy fits as a core U.S. equity allocation or a complement to traditional U.S. large cap core allocations.
Irrational Capital’s data advantage lies in moving away from disclosure data to analyzing what companies are really doing – intention and behavior – through employee surveys that give employees a voice that Irrational Capital believes uncovers more meaningful results, according to Harbor.
Through proprietary surveys and public data, the Human Capital Factor measures intrinsic and extrinsic motivation to establish the relationship between employee well-being and business fundamentals, which impacts equity performance, according to the firm.
The Human Capital Factor is meant to deeply understand corporate culture and translate it in an investable way.
Some examples of what the HCF measures include:
- Intrinsic motivation metrics like psychological safety, sense of appreciation, and open communication
- Extrinsic motivation measures like benefits and compensation level.
For more information, visit www.harborcapital.com.
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