Harbor Small Cap Growth, which reopened earlier this year, focuses on undervalued companies with high forecasted earnings potential.
Christopher Franz: Harbor Small Cap Growth has been a strong long-term performer, and is on our radar. The fund, which re-opened to investors in March 2016, is subadvised by a team at Westfield Capital Management, and has been since its November 2000 inception. The Westfield investment team, guided by president, CEO, and CIO Will Muggia, employs a growth-at-a-reasonable-price investment style, searching for undervalued companies with high forecasted earnings potential, quality balance sheets, and strong management teams. This search process tends to yield a portfolio of around 75 small-cap stocks, with an average annual turnover.
The fund often features large sector over- and underweights versus its Russell 2000 Growth benchmark, with current overweights in industrial and healthcare stocks. These types of bets have paid off, as the fund's 7.5% annualized return over the past 10 years through October 2016 eclipsing the 6.9% return of the Russell 2000 Growth Index, and over 75% of small-growth peers. The fund also benefits from an attractive fee structure, with low fees relative to other funds in its small-cap peer group.
