ContactHarbor Commodity All-Weather Strategy (HGER) ETF Strategy Profile
November 07, 2024Table of Contents
Average Annual Returns as of 9/30/2024
| 3 Months | YTD | 1 Yr. | 3 Yr. | 5 Yr. | 10 Yr. | Since Inception | Inception Date | |
| Harbor Commodity All-Weather Strategy ETF (NAV) | 0.49% | 8.23% | 5.66% | N/A | N/A | N/A | 7.83% | 02/09/2022 |
| Harbor Commodity All-Weather Strategy ETF (Market) | 0.49% | 7.93% | 5.55% | N/A | N/A | N/A | 7.80% | 02/09/2022 |
| Bloomberg Commodity Index | 0.68% | 5.86% | 0.96% | 3.66% | 7.79% | 0.03% | 0.84% | |
| Bloomberg U.S. Aggregate Bond Index | 5.20% | 4.45% | 11.57% | -1.39% | 0.33% | 1.84% | -0.35% | |
| S&P 500 Index | 5.89% | 22.08% | 36.35% | 11.91% | 15.97% | 13.38% | 10.78% | |
| Morningstar Commodity Broad Basket Category | -0.23% | 5.74% | 1.07% | 5.35% | 8.82% | 0.55% | 1.75% |
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. 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 may be higher or lower and is available through the most recent month end at harborcapital.com or by calling 800-422-1050. For most current performance please click here.
Shares are bought and sold at market price not net asset value (NAV). A fund’s NAV is the sum of all its assets less any liabilities, divided by the number of shares outstanding. Market price returns are based upon the closing composite market price and do not represent the returns you would receive if you traded shares at other times.
The dynamic approach employed by the Quantix Commodity Index (QCI) results in differentiated positioning throughout cycles.
Driven by this differentiated positioning, HGER, which closely tracks the QCI, has cumulatively outperformed the Bloomberg Commodity Index by 19.76% (NAV) since its February 2022 inception.
HGER has also outpaced the Bloomberg US Aggregate Bond Index and only slightly lagged the S&P 500 Index since inception.
The use of target weights in this context is around transparency and ease of interpretation. Since QCI is a dynamic index, prior to each quarter’s end Quantix publishes the target weights for the subsequent quarter. Operationally, the index will roll over into those weights in the days following quarter-end and those weights will be reflected for the full quarter (subject to market movements). The intent with showing target weights rather than actual weights is to better represent the exposure provided by QCI/HGER following quarter-end.
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. 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 may be higher or lower and is available through the most recent month end at harborcapital.com or by calling 800-422-1050.
The chart above includes performance for the Bloomberg Aggregate Index and the S&P 500 Index to demonstrate the Fund's diversification to traditional US Equity and Bond Indices. The Bloomberg Aggregate Index and S&P 500 Index are common proxies for US equity and fixed income exposure.
In addition to outperformance relative to the Bloomberg Commodity Index, HGER has delivered attractive results versus industry peers since the ETF’s inception in early 2022.
Notably, HGER’s returns have ranked within the top decile of Morningstar’s Commodity Broad Basket category since inception.
Inception to Date: 5th percentile ranking out of 102 funds based on total returns reported as of 9/30/2024. Trailing 1YR (1 year): 13th percentile ranking out of 109 funds based on total returns reported as of 9/30/2024. See Important Information for full Morningstar rankings.
Source: Morningstar Direct.
| Matthew Schwab Portfolio Manager |
Founded in 2018 and headquartered in Greenwich, CT, Quantix Commodities boasts a seasoned investment team averaging approximately 20 years of experience investing in commodities.
Prior to founding Quantix, the team worked side by side for seven years at Goldman Sachs to run one of the largest commodity index portfolios, developed innovative trading techniques seeking to outperform commodity indices, and developed bespoke investor solutions.
Leveraging this expertise and experience in enhanced commodity index investing, the team developed the Quantix Commodity Index and then the Harbor Commodity All-Weather Strategy ETF (HGER).
The index employs a dynamic approach that seeks to represent a more thoughtful approach to commodities investing.
The Bloomberg Commodity Index (BCOM) often serves as a primary source of investors’ broader-based commodities exposure. However, the Quantix Commodity Index (QCI) has exhibited outperformance relative to BCOM since the index inception given an allocation process that considers each commodity’s inflation sensitivity and roll yield dynamics, and also incorporates a dynamic adjustment of its gold weighting for determined inflationary regimes.
| Share Class | Institutional |
|---|---|
| Cusip | 41151J505 |
| Listed Exchange | NYSE |
| Gross Expense Ratio | 0.68% |
| Lead Market Maker | Jane Street |
| Inception Date | 2/9/2022 |
| Manager Name | Quantix Commodities LP |
| Benchmark | Quantix Commodity Total Return Index |
| Rebalance Frequency | Quarterly |
| Morningstar Category | Commodities Broad Basket |
| 1 | Calculate the ‘Economic Significance’ of each commodity in the universe in order to understand their importance to the real economy |
| 2 | Calculate the Quality Score of each commodity |
| 3 | Reweight the Economic Significance base weights according to the Quality Score |
| 4 | Ensure diversification within the QCI to provide broad based commodity exposure and remain highly liquid and tradeable |
| 5 | A proprietary Quantix Scarcity Debasement Indicator adjusts the gold weight for the determined type of inflationary regime |
Important Information
Risks
Investing involves risk, principal loss is possible. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value. The ETF is new and has limited operating history to judge.
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.
ETFs are subject to capital gains tax and taxation of dividend income. However, ETFs are structured in such a manner that taxes are generally minimized for the holder of the ETF. An ETF manager accommodates investment inflows and outflows by creating or redeeming “creation units,” which are baskets of assets. As a result, the investor usually is not exposed to capital gains on any individual security in the underlying portfolio. However, capital gains tax may be incurred by the investor after the ETF is sold.
Benchmarks
The Bloomberg Commodity Index (“BCOM”) is designed to be a highly liquid and diversified benchmark for commodity investments via futures contracts. The Bloomberg US Aggregate Bond Index is an unmanaged index of investment-grade fixed-rate debt issues with maturities of at least one year. The S&P 500 Index is an unmanaged index generally representative of the U.S. market for large capitalization equities. The Quantix Commodity Index (“QCI”) is calculated on a total return basis, which combines the returns of the futures contracts with the returns on cash collateral invested in 13-week U.S. Treasury Bills. The Quantix Commodity Index was developed by Quantix Commodities LP and is owned by Quantix Commodities Indices LLC. These indices are unmanaged and do not reflect fees and expenses and are not available for direct investment.
Disclosures
© Morningstar 2024. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results.
The Morningstar Rankings are based on total returns, with distributions reinvested and operating expenses deducted. Morningstar does not take into account sales charges. Harbor Commodity All-Weather Strategy ETF was ranked against Morningstar’s Commodity Broad Basket category, quarterly, over the following time periods for absolute rank: 13 out of 109 investments in the category for the 1-year period as of 09/30/2024. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100.
The views expressed herein may not be reflective of current opinions, are subject to change without prior notice, and should not be considered investment advice.
Forecast and estimates are based on hypothetical assumptions and for informational purposes only. This material does not constitute investment advice and should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or to adopt any investment strategy. The information presented does not represent the results that any particular investor may actually attain. Actual results will differ, and may differ substantially, from the hypothetical information provided.
Quantix Commodities LP (“Quantix”) is a third-party subadvisor to the Harbor Commodity All-Weather Strategy ETF.
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