Harbor Capital Appreciation Fund

Scorecard
4 / 5 Stars
Lipper
5 5 4 5 4
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
5 / 5 Stars
TheStreet.com
A+ (Buy)

#9 in Large Growth

U.S. News evaluated 465 Large Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 28.60 percent over the past year, 15.22 percent over the past three years, 20.57 percent over the past five years, and 8.46 percent over the past decade. 

Trailing Returns Updated 03.31.2014
Year to date -0.1%
1 Year 28.6%
3 Years (Annualized) 15.2%
5 Years (Annualized) 20.6%
10 Years (Annualized) 8.5%

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Summary

Harbor Capital Appreciation's focus on blue chips has served it well.

As of April 22, 2014, the fund has assets totaling almost $23.11 billion invested in 73 different holdings. Its portfolio consists primarily of shares of large companies.

For Harbor Capital Appreciation, 2010 was a disappointing year. Notably, its 11 percent return landed it in the bottom 18 percent of Morningstar's large-growth category. Still, there were some bright spots. Apple and Amazon, which together represent (as of the end of 2010) almost 10 percent of the fund's portfolio, were both strong performers last year. Going forward, the fund's fortune will continue to be very much wed to the success of those two companies. While Amazon and Apple are atypical in terms of the amount of space they take up in the portfolio, the companies are very much representative of management's basic preference for big, blue-chip companies with strong brand-name appeal. Elsewhere in the portfolio you'll find some of the bigger names in tech, such as Google and IBM, and consumer goods and services, such as Nike and Target. By sticking with companies that have long proven their worth, management has put together a solid track record. As of the end of 2010, the fund's trailing three-year returns landed it in the top fifth of its Morningstar category. The fund has returned 28.60 percent over the past year and 15.22 percent over the past three years. 

This fund's investor share class launched in 2002, but its institutional share class dates back to 1987. In the period leading up to the launch of the investor share class, the fund struggled quite a bit, underperforming the S&P 500 by 8 percentage points in 2000 and 6 percentage points in 2001. Since then, however, management has steadied the ship, leading the fund to some strong, though occasionally middling, finishes. The fund has returned 20.57 percent over the past five years and 8.46 percent over the past decade.

Investment Strategy

According to the fund's prospectus: "In selecting stocks for the Fund's portfolio, [management] looks for companies that it believes have the following financial characteristics: superior absolute and relative earnings growth; superior sales growth, improving sales momentum and high levels of unit growth; high or improving profitability; [and] strong balance sheets."

Role in Portfolio

Morningstar calls the fund a "core" holding.

Management

Spiros Segalas manages the fund.

Fees

Harbor Capital Appreciation Fund has an expense ratio of 0.65 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 1 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 1 for one year, 2 for five years, and 2 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-04-10

The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-04-10

The firm's collaborative and performance-driven culture is another strong positive.

Litman Gregory 2010-06-30

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying: "Harbor Capital Advisors is a top steward with a clean regulatory history. The firm's subadvisory model is supported by rigorous research and gives investors less-expensive access to strong managers than they can get elsewhere. Manager investment in fund shares also is strong." 

Morningstar 2011-02-06

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying: "Harbor Capital Advisors is a top steward with a clean regulatory history. The firm's subadvisory model is supported by rigorous research and gives investors less-expensive access to strong managers than they can get elsewhere. Manager investment in fund shares also is strong." 

Morningstar 2011-02-06