Today, Harbor Capital launched its latest fund, the Harbor Osmosis International Resource Efficient ETF (EFFI).
An actively managed fund, EFFI looks to offer long-term capital appreciation to its investors. Its net expense ratio currently sits at 0.55%.
Primarily, EFFI aims to achieve its investment goals by investing in resource-efficient companies across a variety of developed markets. This portfolio contains a mix of large- and midcap companies based outside the United States.
Finding Resource-Efficient Companies
Osmosis Investment Management U.S. serves as the fund’s subadvisor. Osmosis believes companies with good resource-efficiency ratings can outperform the MSCI World ex US Index. To properly screen companies for resource efficiency, Osmosis employs a quantitative strategy.
This quantitative strategy compares companies to peers within their respective sectors. These companies are screened based on carbon emissions, water use, waste production, and nuclear waste. Companies then receive a proprietary Resource Efficiency Score based on these findings
Overall weightings and portfolio exposure are constructed to focus on companies with strong Resource Efficiency Scores. However, the fund also tinkers with weightings to build similar country, factor, and sector exposure to the benchmark index.
As an important note, companies within the financial sector do not generally receive Resource Efficiency Scores. This is due to their broadly minimal water consumption, carbon emission, and waste generation compared with other sectors. However, EFFI may invest in some companies within this sector to correctly tilt its factor weightings.
Additionally, up to 20% of the fund’s overall assets may be invested in assets that are potentially not resource efficient. This may be done to preserve similar weightings to that of the fund’s benchmark.
Harbor Capital has more than 10 ETFs listed within the United States. These funds account for over $1.8 billion in assets under management.
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