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A Large-Cap Fund Worth a Second Look

A Large-Cap Fund Worth a Second Look

Andrew Daniels: Harbor Large Cap Value has posted solid risk-adjusted results in recent years, and is on our radar.

The fund has been subadvised by Aristotle Capital Management since 2012 and is led by Howard Gleicher. Gleicher and a team of about a dozen analysts employ a bottom-up, fundamental approach. They target high-quality companies with sustainable competitive advantages, attractive fundamentals, and experienced management teams. While valuation is an important component to the process, the team prefers quality firms when they're out of favor over mediocre firms trading at fire-sale prices, hence why the fund lands in the large-blend Morningstar Category.

The resulting portfolio is concentrated, holding between 35 and 45 stocks, so portfolio turnover is below average. What's more is that most of the fund's assets are in share classes that charge below average fees. While the fund had just $660 million of assets under management as of August 2017, Aristotle does run more than $11 billion in this strategy, most of which via a separate account.

For investors seeking large-cap exposure, this fund may be worth a second look.

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About the Author

Andrew Daniels

Associate Director
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Andrew Daniels, CFA, CAIA, is associate director of equity strategies for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He helps oversee Morningstar’s U.S.-based equity strategies team and is responsible for qualitative research on prominent equity strategies, including those offered by Harris Associates and Artisan Partners.

From 2018-21, Daniels was based in Morningstar’s Hong Kong office, conducting qualitative research on global emerging-markets and Asia-Pacific equity strategies, in addition to helping on the delivery of manager research services in the region.

Before joining Morningstar in 2015, Daniels worked in corporate finance for Caterpillar and in portfolio management for Evanston Advisors.

Daniels holds bachelor's degrees in finance, economics, and marketing from the University of Iowa, where he graduated with distinction. He also earned a Master of Business Administration from the University of Chicago Booth School of Business. Daniels holds the Chartered Financial Analyst® designation and the Chartered Alternative Investment Analyst® designation. He is also a Certified Management Accountant.

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