The Harbor Commodity All-Weather Strategy ETF (HGER) is among the top-performing broad commodity ETFs in the past month as of August 2023.
HGER’s dynamic approach to commodities investing has recently led the fund to outpace category peers in the same timeframe. HGER adjusts commodity weights based on different market and inflationary regimes, particularly commodity scarcity and debasement.
“Many advisors want the diversification benefits of commodities but would benefit from a dynamic approach,” Todd Rosenbluth, head of research at VettaFi, said. “The economic environment today is different than it was at the beginning of 2023.”
HGER’s increased allocation to energy commodities appears advantageous in recent weeks. Energy commodities make up 38.4% of HGER’s underlying index by weight as of August 14. Brent crude oil comprises 14.5% of HGER’s underlying index by weight, heating oil comprises 12.5%, and RBOB gasoline and gasoline comprise a combined 11.4% by weight.
Harbor’s Commodity All-Weather Strategy ETF Outperforms as Energy Rallies
In the one-month period trailing August 2023, HGER had climbed 5.4% at NAV. In comparison, the commodities benchmark had increased 3.9% during the same period.
Performance data shown represents past performance and is no guarantee of future results. Past performance is net of management fees and expenses and reflects reinvested dividends and distributions. Past performance reflects the beneficial effect of any expense waivers or reimbursements, without which returns would have been lower. Investment returns and principal value will fluctuate and when redeemed may be worth more or less than their original cost. Returns for periods less than one year are not annualized. Current performance is available through the most recent month end at harborcapital.com or by calling 800-422-1050.
HGER has climbed 3.1% year to date at NAV as of August 2023, while the commodities benchmark declined has 3.5%.
Third quarter to date, oil prices have increased on OPEC+ supply cuts, improved macroeconomic sentiment, and record global demand.
Global oil demand could peak in August after reaching a record level in June, as cited by the International Energy Agency (IEA) on August 11th. Oil demand is boosted by strong summer air travel, increased oil use in power generation, and surging petrochemical activity in China, according to the IEA.
Global oil demand is currently on track to expand by 2.2 mb/d, or million barrels per day, to 102.2 mb/d, its highest-ever annual level, according to the IEA.
Energy commodities were supported as OECD demand was revised for May and June. According to the IEA, consumption returned to growth during the second quarter after two-quarters of contraction. Notably, demand in China was stronger than expected during the period despite concerns about the economy.
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Important Information
All investments involve risk including the possible loss of principal. Please refer to the Fund’s prospectus for additional risks associated with the Fund. For the Fund’s prospectus, holdings, and most current standardized performance, please click: HGER
Investors should carefully consider the investment objectives, risks, charges and expenses of a fund before investing. To obtain a summary prospectus or prospectus for this and other information, visit harborcapital.com or call 800-422-1050. Read it carefully before investing.
The views expressed herein are those of Harbor Capital Advisors, Inc. investment professionals at the time the comments were made. They may not be reflective of their current opinions, are subject to change without prior notice, and should not be considered investment advice.
HGER Risk: There is no guarantee that the investment objective of the Fund will be achieved. Stock markets are volatile and equity values can decline significantly in response to adverse issuer, political, regulatory, market and economic conditions. A non-diversified Fund may invest a greater percentage of its assets in securities of a single issuer, and/or invest in a relatively small number of issuers, it is more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio.
Commodity Risk: The Fund has exposure to commodities through its and/or the Subsidiary’s investments in commodity-linked derivative instruments.
Authorized Participant Concentration/Trading Risk: Only authorized participants (“APs”) may engage in creation or redemption transactions directly with the Fund.
Commodity-Linked Derivatives Risk: The Fund’s investments in commodity-linked derivative instruments (either directly or through the Subsidiary) and the tracking of an Index comprised of commodity futures may subject the Fund to significantly greater volatility than investments in traditional securities.
Additional Information
The Bloomberg Commodity Index (BCOM) is a broadly diversified commodity price index distributed by Bloomberg Index Services Limited, that tracks prices of futures contracts on physical commodities on the commodity markets.
Net-zero end state is cutting greenhouse gas emissions to as close to zero as possible, with any remaining emissions re-absorbed from the atmosphere.
Quantix Commodities, LP is the subadvisor for the Harbor Commodity All-Weather Strategy ETF (HGER).
This article was prepared as Harbor Funds paid sponsorship with VettaFI.
Foreside Fund Services, LLC is the Distributor of the Harbor ETFs.
Foreside Fund Services, LLC is the Distributor of the Harbor ETFs.
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