(PUB) Investing 2016

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Data through September 30, 2016 FINRA members: For internal or institutional use only.
Harbor Capital Appreciation Instl Ticker
HACAX
Yield
0.1%
Total Assets
$25,397 mil
Mstar Category
Large Growth
Benchmark 1: Russell 1000 Growth TR USD
Benchmark 2: S&P 500 TR USD
Morningstar Analyst Rating 09-30-16
Œ
Morningstar Pillars
Process ∞ Positive
Performance ∞ Positive
People ∞ Positive
Parent ∞ Positive
Price ∞ Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which its
analysts believe lead to funds that are more likely to outperform over the
long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ ‰ Á
Pillar Spectrum
∞ Positive § Negative ¶ Neutral
10.0
15.0
20.0
Historical Profile
Return
Risk
Rating
Above Avg
Above Avg
QQQQ
Above Avg
7 7 7 7 7 7 7 7 Investment Style
Equity
Growth of $10,000
Investment Values of
Fund
Investment Values of
Benchmark 1
) ( & & ) & * & ( & ) Performance Quartile
(within Category)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 09-16 History
33.35 37.31 23.30 32.97 36.72 36.90 42.52 56.69 58.52 60.81 61.35 NAV
2.33 12.25 -37.13 41.88 11.61 0.61 15.69 37.66 9.93 10.99 0.89 Total Return %
-6.74 0.44 1.31 4.67 -5.10 -2.03 0.43 4.18 -3.12 5.32 -5.12 +/- Bmark 1
-13.47 6.76 -0.13 15.42 -3.45 -1.50 -0.31 5.27 -3.76 9.61 -6.95 +/- Bmark 2
0.22 0.37 0.42 0.37 0.23 0.12 0.46 0.11 0.08 0.08 0.00 Income Return %
2.11 11.88 -37.55 41.51 11.37 0.49 15.23 37.55 9.85 10.91 0.89 Capital Return %
85 54 21 21 82 24 43 17 53 4 85 Total Rtn % Rank Cat
0.07 0.12 0.16 0.09 0.08 0.04 0.17 0.05 0.05 0.05 0.00 Income $
0.00 0.00 0.00 0.00 0.00 0.00 0.00 1.73 3.77 4.11 0.00 Capital Gains $
0.67 0.67 0.68 0.70 0.70 0.68 0.68 0.68 0.67 0.68 0.64 Expense Ratio %
0.25 0.38 0.47 0.40 0.24 0.14 0.20 0.35 0.11 0.12 0.17 Income Ratio %
71 69 82 72 68 53 41 48 34 37 . Turnover Rate %
7,939 8,348 5,039 7,957 9,749 11,115 15,081 20,516 22,329 24,466 22,273 Net Assets $mil
Performance 09-30-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2012 19.08 -6.87 5.62 -1.23 15.69
2013 6.91 2.35 12.38 11.94 37.66
2014 -0.12 4.59 1.91 3.26 9.93
2015 5.55 2.88 -5.44 8.09 10.99
2016 -5.49 -1.31 8.16 — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo 8.16 3.58 4.31 11 10,816
6 Mo 6.75 1.53 0.35 33 10,675
1 Yr 9.05 -4.71 -6.38 70 10,905
3 Yr Avg 11.28 -0.55 0.12 17 13,779
5 Yr Avg 15.99 -0.61 -0.38 29 20,999
10 Yr Avg 8.68 -0.17 1.44 21 22,985
15 Yr Avg 7.54 0.19 0.39 29 29,742
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) 9.90 11 1.24 31
5 Yr (estimated) 15.11 19 0.77 26
10 Yr (estimated) 8.23 14 0.41 21
Potential Capital Gain Exposure: 42% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr 9.05
3 Yr 11.28 +Avg High QQQQ
5 Yr 15.99 +Avg +Avg QQQ
10 Yr 8.68 +Avg Avg QQQQ
Incept 11.17
Other Measures Standard Index Best Fit Index
Alpha -0.8 -1.0
Beta 1.11 1.04
R-Squared 77 92
Standard Deviation 13.70
Mean 11.28
Sharpe Ratio 0.84
Portfolio Analysis 06-30-16
Total Stocks: 60
Share change since 03-31-16 Sector YTD Ret % % Assets
YAmazon.com Inc Cnsmr Cyc 23.88 6.13
YFacebook Inc A Technology 22.56 4.38
YApple Inc Technology 8.98 4.03
Visa Inc Class A Finan Svcs 7.18 3.54
TTencent Holdings Ltd Technology — 2.86
YMasterCard Inc A Finan Svcs 5.12 2.72
TBristol-Myers Squibb Comp Hlth Care -20.51 2.68
Industria De Diseno Texti Cnsmr Cyc — 2.43
Salesforce.com Inc Technology -9.02 2.43
Adobe Systems Inc Technology 15.54 2.40
YAlphabet Inc A Technology 3.35 2.31
YAlphabet Inc C Technology — 2.31
TMicrosoft Corp Technology 5.77 2.27
YO'Reilly Automotive Inc Cnsmr Cyc 10.53 2.14
YNike Inc B Cnsmr Cyc -14.99 2.10
Celgene Corp Hlth Care -12.72 2.08
TShire PLC ADR Hlth Care — 2.04
TAlibaba Group Holding Ltd Cnsmr Cyc — 2.02
TAllergan PLC Hlth Care -26.30 1.95
YNetflix Inc Comm Svcs -13.84 1.87
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 55.2
Large 34.1
Mid 10.7
Small 0.0
Micro 0.0
Avg $mil:
82,205
Value Measures Rel Category
Price/Earnings 27.29 1.17
Price/Book 4.89 1.25
Price/Sales 3.06 1.26
Price/Cash Flow 15.33 1.18
Dividend Yield % 0.91 0.69
Growth Measures % Rel Category
Long-Term Erngs 13.55 1.14
Book Value 14.43 1.93
Sales 10.51 1.46
Cash Flow 18.10 1.63
Historical Erngs 12.00 1.01
Profitability %
Return on Equity 22.89
Return on Assets 9.57
Net Margin 14.45
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 37.77 1.31
r BasicMat 0.19 0.06
t CnsmrCyc 30.56 1.65
y FinanSvcs 7.02 1.37
u Real Est 0.00 0.00
j Sensitive 41.44 0.93
i CommSrvs 3.43 0.80
o Energy 2.28 3.56
p Industrl 4.83 0.38
a Technlgy 30.90 1.15
k Defensive 20.79 0.78
s CnsmrDef 5.25 0.56
d Hlthcare 15.54 0.90
f Utilities 0.00 0.00
Composition - Net
Cash 2.1
Stocks 97.9
Bonds 0.0
Other 0.0
Foreign 13.2
(% of Stock)
Morningstar's Take by David Kathman, CFA 09-30-16
Harbor Capital Appreciation has seen a dramatic shift in
its fortunes over the past two years. In 2015, it was one
of the best-performing funds in the large-growth
Morningstar Category, posting double-digit returns in a
tough year, thanks to big gains by its Internet and
healthcare holdings. It has been a different story in 2016,
as the fund has struggled to stay in positive territory and
ranksnearthecategory'sbottomdecilethroughtheyear's
first nine months. Such short-term slumps are no reason
to be too concerned, though, as the fund still features an
excellent long-term record under veteran manager Sig
Segalas. It still earns a Morningstar Analyst Rating of
Gold.
Segalashas ledthis fund formorethan25yearsusing
a fairly traditional growth strategy, one that's disciplined
but also flexible when necessary. Along with comanager
Kathleen McCarragher, he looks for companies that are
growing faster than the S&P 500 benchmark, especially
those with strong revenue growth driven by unit sales
rather than price increases. Fundamentals such as strong
balance sheets are also important, as are solid
competitive advantages that will allow a company to
maintain its growth into the future. Segalas and his team
don't ignore price, but it's not a primary concern, so the
fund'saveragevaluations tend tobehigher than the large-
growth category averages.
This strategy results in a portfolio that tends to be
heavy in technology, Internet, and healthcare stocks--
primarily big, established names that still have significant
growth potential, such as top holdings Amazon AMZN
and Facebook FB. Many of these stocks can be volatile in
the short term, which accounts for the fund's ups and
downs of the past couple of years. Amazon and Facebook
were among the prominent holdings whose big gains
drove the fund's great 2015 returns, but those stocks
have all cooled off to varying degrees in 2016, and that,
combined with a market favoring the type of high-yielding
stocks that this fund doesn't own, accounts for its
underperformance. But the fund has trounced its peers
over Segalas' 26-year tenure, and it remains a standout
among large-growth funds.
Address: Harbor Funds Minimum Purchase: $50000 Add: — IRA: $50000
Chicago, IL 60606-4302 Min Auto Inv Plan: — Add: —
800-422-1050 Sales Fees: No-load
Web Address: Management Fee: 0.60%
Inception: 12-29-87 Actual Fees: Mgt:0.60% Dist:—
Advisor: Harbor Capital Advisors Inc Expense Projections: 3Yr:$218 5Yr:$383 10Yr:$862
Subadvisor: Jennison Associates LLC Income Distribution: Annually
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