|
|
|
|
|
|
|
|
|
|
Harbor Commodity Real Return Strategy Fund
Summary Prospectus
– March 1, 2013
|
|
Institutional Class
HACMX
Administrative Class
HCMRX
|
|
|
Before you invest, you may want to review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s
prospectus and other information about the Fund online at www.harborfunds.com/prospectus. You can also get this information at no cost by calling 800-422-1050 or by sending an e-mail request to funddocuments@harborfunds.com. If you purchase shares
of the Fund through a financial intermediary, the prospectus and other information will also be available from your financial intermediary. The current prospectus and statement of additional information, dated March 1, 2013, are incorporated by
referenced into this summary prospectus and may be obtained, free of charge, at the website, phone number or e-mail address noted above.
Investment Objective
The Fund seeks maximum real return, consistent with prudent investment management.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your investment)
|
|
|
|
|
|
|
|
|
|
|
|
|
Institutional
Class
|
|
|
Administrative
Class
|
|
|
Management Fees
1
|
|
|
0.81%
|
|
|
|
0.81%
|
|
|
Distribution and/or Service (12b-1) Fees
|
|
|
None
|
|
|
|
0.25%
|
|
|
Other Expenses
|
|
|
0.23%
|
|
|
|
0.23%
|
|
|
Interest Expense from Sale-Buyback Transactions
|
|
|
0.06%
|
|
|
|
0.06%
|
|
|
Other Operating Expenses
|
|
|
0.17%
|
|
|
|
0.17%
|
|
|
Total Annual Fund Operating Expenses
1
|
|
|
1.04%
|
|
|
|
1.29%
|
|
|
Expense
Reimbursement
2
|
|
|
0.09%
|
|
|
|
0.09%
|
|
|
Total Annual Fund Operating Expenses After Expense Reimbursement
1,2
|
|
|
0.95%
|
|
|
|
1.20%
|
|
|
1
|
|
Management Fees, Total Annual Fund Operating Expenses and Total Annual
Fund Operating Expenses After Expense Reimbursement have been restated to reflect current fees.
|
|
2
|
|
The Adviser has contractually agreed to limit the Fund’s operating expenses, excluding Interest Expense from Sale-Buyback Transactions, through
February 28, 2014. Only the Board of Trustees may modify or terminate this agreement.
|
Expense Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in the Fund for the time periods indicated. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may
be higher or lower, under these assumptions, your costs would be:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One
Year
|
|
|
Three
Years
|
|
|
Five
Years
|
|
|
Ten
Years
|
|
|
Institutional
|
|
$
|
97
|
|
|
$
|
322
|
|
|
$
|
565
|
|
|
$
|
1,263
|
|
|
Administrative
|
|
$
|
122
|
|
|
$
|
400
|
|
|
$
|
699
|
|
|
$
|
1,549
|
|
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may
result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. The Fund’s portfolio turnover rate in the most
recent fiscal year was 474%.
Principal Investment Strategy
Principal Style Characteristics:
Commodity-linked derivative instruments backed by a portfolio of inflation-indexed and other fixed income instruments
The Fund seeks to achieve its investment objective by investing under normal market conditions in commodity-linked derivative
instruments backed by a portfolio of inflation-indexed securities and other fixed income instruments. Rather than invest directly in physical commodities, the Fund employs an enhanced index strategy. The commodity-linked derivative instruments in
which the Fund primarily invests are linked to the Dow Jones-UBS Commodity Index Total Return
SM
(the “Commodity Index”), which is intended to provide the Fund with exposure to the investment returns of the commodities markets as represented by the Commodity Index without the Fund
investing directly in physical commodities. Commodity-linked derivative instruments in which the Fund may invest include commodity index-linked notes, swap agreements, commodity options, futures and options on futures. The assets used to
collateralize the commodity-linked derivative instruments are invested in an actively managed portfolio of inflation-indexed bonds and other fixed income securities, including derivative fixed income instruments. The Fund may engage in short
selling, which is the sale by the Fund of a borrowed security. The Fund also may invest in common and preferred stocks as well as convertible securities of issuers in commodity-related industries.
The Commodity Index tracks the returns of futures contracts in different physical commodities. The Commodity Index is structured to seek to provide
diversified commodity exposure by requiring that no related group of commodities may constitute more than 33% of the index and no single commodity may constitute more than 15% or less than 2% of the index. The value of the Commodity Index, and
therefore the value of any derivative instruments linked to that index, may be affected by overall market movements and other factors affecting the value of a particular industry or commodity, such as weather, disease, embargoes or political and
regulatory developments.
The Fund will seek to gain exposure to the commodity markets primarily through investments in leveraged or
unleveraged commodity index-linked notes and through investments in Harbor Cayman Commodity Fund Ltd., a
1
Summary Prospectus
HARBOR COMMODITY REAL RETURN STRATEGY FUND
wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”). Commodity index-linked notes are derivative debt instruments with principal and/or
coupon payments linked to the performance of commodity indices. The Subsidiary has the same investment objective and is subject to substantially the same investment policies and restrictions as the Fund, except that the Subsidiary (unlike the Fund)
may invest without limitation in commodity-linked swap agreements and other commodity-linked derivative instruments. The Subsidiary is advised by Harbor Capital Advisors and subadvised by PIMCO. The Fund may invest up to 25% of its total assets in
the Subsidiary.
The derivative instruments in which the Fund and the Subsidiary primarily intend to invest are instruments linked to the
Commodity Index. However, the Subadviser also seeks to generate additional incremental return over that of the Commodity Index by seeking to take advantage of temporary market fluctuations in the manner in which the Fund creates exposure to the
Commodity Index. The Fund’s or the Subsidiary’s investments in commodity-linked derivative instruments may include exposure to commodity futures with different roll dates, reset dates or contract months than those specified within the
Commodity Index. The Fund or the Subsidiary may also invest in derivative instruments linked to the value of a particular commodity or commodity futures contract, or a subset of commodities or commodity futures contracts. As a result, the
commodity-linked derivatives component of the Fund’s portfolio may deviate from the returns of the Commodity Index. The Fund or the Subsidiary also may over-weight or under-weight its exposure to the Commodity Index, or a subset of commodities,
such that the Fund may have a greater or lesser exposure to that index than the value of the Fund’s net assets, or greater or lesser exposure to a subset of commodities than is represented by a particular commodity index. These deviations will
frequently be the result of temporary market fluctuations, and under normal circumstances the Fund will seek to maintain notional exposure to the Commodity Index within 5% (plus or minus) of the value of the Fund’s net assets.
The Fund may invest up to 30% of its total assets in securities denominated in foreign currencies and may invest beyond this limit in U.S. dollar
denominated securities of foreign issuers. The Fund may invest up to 10% of its total assets in securities and instruments that are economically tied to emerging market countries. The Fund will normally limit its foreign currency exposure (from
non-U.S. dollar-denominated securities or currencies) to 20% of its total assets. The Fund may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale
contracts or by using other investment techniques (such as buy backs or dollar rolls). The Fund also may invest up to 10% of its total assets in preferred stocks.
The Fund is non-diversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund. In addition, the Fund may concentrate its assets in particular sectors
of the commodities market.
Duration.
The average portfolio duration of the fixed income portion of the Fund will vary based on the
Subadviser’s forecast for interest rates, but under normal market conditions is not expected to exceed ten years. Average duration is the weighted average of all bond durations in the Fund’s portfolio, and is an approximate measure of the
sensitivity of the market value of the Fund’s fixed income holdings to changes in interest rates. If the Fund’s duration is longer than the market’s duration, the Fund’s fixed income assets would experience a greater change in
value when interest rates are rising or falling than would the market as a whole.
Credit Quality.
The Fund may invest up to 10% of its
total assets in below investment-grade securities, commonly referred to as “high-yield” or “junk” bonds. For all securities other than mortgage-related securities, the Fund may invest in below investment-grade securities only if
they are rated B or higher by Moody’s, S&P or Fitch, or, if unrated, determined to be of comparable quality. For mortgage-related securities, the Fund may invest in securities of any credit quality, including those rated below B.
Principal Risks
Investors considering an investment in the Fund should be prepared to accept significant volatility in the Fund’s performance, particularly over
shorter time periods. The Fund is not intended to serve as a core holding in an investor’s portfolio but instead should represent only a small portion of an investor’s overall diversified portfolio. Investors considering an investment in
this Fund should be sure they carefully read and understand the investment strategies employed and the heightened risks associated with those strategies.
There is no guarantee that the investment objective of the Fund will be achieved. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency. Commodities and commodity-linked derivative instruments can be significantly more volatile than other securities, such as stocks or bonds. Similarly, the Commodity Index can be significantly more volatile
than broad market equity and fixed income indices. The value of your investment in the Fund may go down, which means that you could lose money on your investment in the Fund or the Fund may not perform as well as other possible investments.
Principal risks include:
Commodity risk:
The Fund’s investments in commodity-linked derivative instruments may subject the Fund to
significantly greater volatility than investments in traditional securities. The value of commodity-linked derivative instruments may be affected by changes in overall market movements, commodity index volatility, changes in interest rates or
factors affecting a particular industry or commodity, such as a drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. The Fund may concentrate its assets in a particular
sector of the commodities market (such as oil, metal or agricultural products). As a result, the Fund may be more susceptible to risks associated with those sectors.
Fixed income security risk:
Fixed income securities fluctuate in price in response to various factors, including changes in interest rates, changes in market conditions and issuer-specific events.
Subsidiary risk:
By investing in the Subsidiary, the Fund is indirectly exposed to the risks associated with the Subsidiary’s
investments. The derivatives and other investments held by the Subsidiary generally are similar to those that are permitted to be held by the Fund and are subject to the same risks that apply to similar investments if held directly by the Fund. The
Subsidiary is not registered under the Investment Company Act of 1940 (the “Investment Company Act”), and, unless otherwise noted in this prospectus, is not subject to all of the investor protections of the Investment Company Act. In
addition, changes in the laws of the United States and/or the Cayman Islands could result in the inability of the Fund
2
Summary Prospectus
HARBOR COMMODITY REAL RETURN STRATEGY FUND
and/or the Subsidiary to operate as described in this Prospectus and the Statement of Additional Information and could adversely affect the Fund.
Tax risk:
The ability of the Fund to gain commodity exposure as contemplated may be adversely affected by future legislation, regulatory
developments, interpretive guidance or other actions by the Internal Revenue Service or the Treasury Department.
Regulatory risk:
The
Commodity Futures Trading Commission has recently adopted amendments to CFTC Rules, which, when fully implemented with related regulations, will subject the Fund to regulation by the CFTC, including registration, disclosure and operational
requirements governing commodity pools. Certain of the CFTC regulations that would apply to the Fund as a commodity pool have not yet been adopted, and it is unclear what the effect of those rules would have on the Fund if adopted.
Interest rate risk:
As nominal interest rates rise, the values of fixed income securities held by the Fund are likely to decrease and reduce the
value of the Fund’s portfolio. Securities with longer durations tend to be more sensitive to changes in interest rates, and are usually more volatile than securities with shorter durations. For example, a 5 year average duration generally means
the fixed income security will decrease in value by 5% if interest rates rise by 1%.
A nominal interest rate can be described as the sum of a
real interest rate and an expected inflation rate. Inflation-indexed securities, including U.S. Treasury inflation protected securities (“TIPS”), decline in value when real interest rates rise. In certain interest rate environments, such
as when real interest rates are rising faster than nominal interest rates, inflation-indexed securities may experience greater losses than other fixed income securities with similar durations. Interest rates in the U.S. are at, or near, historic
lows, which may increase the Fund’s exposure to risks associated with rising rates.
Credit risk:
The issuer of a security owned by
the Fund could default on its obligation to pay principal or interest or its credit rating could be downgraded. Likewise, a counterparty to a derivative or other contractual instrument owned by the Fund could default on its obligation. This risk is
higher for below investment-grade securities.
Prepayment risk:
When interest rates are declining, the issuer of a pass-through
security, such as a mortgage-backed or an asset-backed security, may exercise its option to prepay principal earlier than scheduled, forcing the Fund to reinvest in lower yielding securities.
Selection risk:
The Subadviser’s judgment about the attractiveness, value and potential appreciation of a particular security may be incorrect.
Derivatives risk:
The value of derivative instruments held by the Fund may not change in the manner expected by the Subadviser, which could result
in disproportionately large losses to the Fund.
Leveraging risk:
The Fund’s use of certain investments, such as derivative
instruments, and certain transactions, such as securities purchased on a when-issued, delayed delivery or forward commitment basis, can give rise to leverage within the Fund’s portfolio, which could cause the Fund’s returns to be more
volatile than if leverage had not been used.
Foreign securities risk:
Because the Fund may invest in securities of foreign issuers, an
investment in the Fund is subject to special risks in addition to those of U.S. securities. These risks include heightened political and economic risks, greater volatility, currency fluctuations, higher transaction costs, delayed settlement,
possible foreign controls on investment, and less stringent investor protection and disclosure standards of foreign markets. Foreign securities are sometimes less liquid and harder to value than securities of U.S. issuers. These risks are more
significant for issuers in emerging market countries. Global economies and financial markets are becoming increasingly interconnected, and conditions and events in one country, region or financial market may adversely impact issuers in a different
country, region or financial market.
Non-diversification risk:
Because the Fund is non-diversified and 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. Some of
those issuers may also present substantial credit or other risks.
Short sales risk:
If the price of securities sold short increases,
the Fund would be required to pay more to replace the borrowed securities than the Fund received on the sale of the securities. Because there is theoretically no limit to the amount of the increase in price of the borrowed securities, the
Fund’s risk of loss on a short sale is potentially unlimited.
Mortgage risk:
Mortgage derivatives in the Fund’s portfolio may
have especially volatile prices because the embedded leverage can magnify the impact of the extension or contraction event on the underlying cash flow. There may be a greater risk that the Fund could lose money due to prepayment and extension risks
because the Fund invests heavily at times in mortgage-related securities.
Performance
The following bar chart and table show two aspects of the Fund: volatility and performance. The bar chart shows the volatility — or variability
— of the Fund’s annual total returns over time, and shows that Fund performance can change from year to year. The table shows the Fund’s average annual total returns for certain time periods compared to the returns of a broad-based
securities index. The bar chart and table provide some indication of the risks and potential rewards of investing in the Fund. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in
the future. To obtain updated performance information please visit the Fund’s website at www.harborfunds.com or call 800-422-1050.
Calendar Year Total Returns for Institutional Class Shares
3
Summary Prospectus
HARBOR COMMODITY REAL RETURN STRATEGY FUND
The Fund’s best and worst calendar quarters during this time period were:
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Return
|
|
|
Quarter/Year
|
|
|
Best Quarter
|
|
|
15.34%
|
|
|
|
4th/2010
|
|
|
Worst Quarter
|
|
|
-32.91%
|
|
|
|
4th/2008
|
|
Average Annual Total Returns — As of December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One
Year
|
|
|
Five
Years
|
|
Ten
Years
|
|
Life of
Fund
|
|
|
Institutional Class (inception date 09-02-2008)
|
|
|
Before Taxes
|
|
|
5.19%
|
|
|
N/A
|
|
N/A
|
|
|
-1.48%
|
|
|
After Taxes on Distributions
|
|
|
4.60%
|
|
|
N/A
|
|
N/A
|
|
|
-3.55%
|
|
|
After Taxes on Distributions and Sale of Fund Shares
|
|
|
3.43%
|
|
|
N/A
|
|
N/A
|
|
|
-2.45%
|
|
|
Administrative Class (inception date 09-02-2008)
|
|
|
Before Taxes
|
|
|
4.96%
|
|
|
N/A
|
|
N/A
|
|
|
-1.74%
|
|
Comparative Index
(reflects no deduction for fees, expenses or taxes)
|
|
|
Dow Jones-UBS Commodity Index Total Return
SM
|
|
|
-1.06%
|
|
|
N/A
|
|
N/A
|
|
|
-6.79%
|
|
After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on a shareholder’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to shareholders who hold their Fund shares through
tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only. After-tax returns for the Administrative Class shares will vary.
Portfolio Management
Investment Adviser
Harbor Capital Advisors, Inc.
Subadviser
Pacific Investment
Management Company LLC (PIMCO) has subadvised the Fund since its inception in 2008.
Portfolio Manager
|
|
|
|
|
|
|
|
|
Mihir Worah
PIMCO
|
|
|
|
Mr. Worah is a Managing Director for PIMCO. Mr. Worah is a Portfolio Manager has managed the Fund since its inception in 2008.
|
Buying and Selling Fund Shares
Shareholders may purchase or sell (redeem) Fund shares on any business day (normally any day the New York Stock Exchange is open). You may conduct transactions by mail, by telephone or through our
website.
|
|
|
|
|
By Mail
|
|
Harbor Funds
P.O. Box 804660
Chicago, IL 60680-4108
|
|
By Telephone
|
|
800-422-1050
|
|
By Visiting Our Website
|
|
www.harborfunds.com
|
Investors
who wish to purchase, exchange or redeem shares held through a financial intermediary should contact the financial intermediary directly.
The
minimum initial investment amounts are shown below. The minimums may be reduced or waived in some cases. There are no minimums for subsequent investments.
|
|
|
|
|
|
|
|
|
|
|
Type of Account
|
|
Institutional
Class
|
|
|
Administrative
Class*
|
|
|
Regular
|
|
$
|
1,000
|
|
|
$
|
50,000
|
|
|
Individual Retirement Account (IRA)
|
|
$
|
1,000
|
|
|
|
N/A
|
|
|
Custodial (UGMA/UTMA)
|
|
$
|
1,000
|
|
|
|
N/A
|
|
|
*
|
|
Limited only to eligible retirement plans and financial intermediaries. There is no minimum investment for qualified retirement plans and Section 457 plans.
|
Tax Information
Distributions you receive from the fund are subject to federal income tax and may also be subject to state and local taxes. These distributions will generally be taxed as ordinary income or capital
gains, unless you are investing through a tax-deferred retirement account, such as a 401(k) plan or individual retirement account. Investments in tax-deferred accounts may be subject to tax when they are withdrawn.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and/or its related companies may pay the intermediary for the sale of Fund shares and related services. These
payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your sales representative to recommend the Fund over another investment. Ask your sales representative or visit your financial intermediary’s
website for more information.
4
[INTENTIONALLY LEFT BLANK]
Nuveen New York Quality Income Municipal Fund, Inc. (NYSE:NUN)
Historical Stock Chart
From May 2024 to Jun 2024
Nuveen New York Quality Income Municipal Fund, Inc. (NYSE:NUN)
Historical Stock Chart
From Jun 2023 to Jun 2024
