| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 9.0% | 4.0% | 15.6% |
| 2025 |
|---|
| 15.6% |
The Harbor Mid Cap Value Fund delivered strong fourth quarter performance, returning 4.07% versus 1.42% for the Russell Midcap Value Index. The outperformance was driven primarily by bottom-up stock selection, particularly in Industrials, Consumer Discretionary, and Financials sectors. Top contributors included Sandisk, which benefited from AI-driven storage demand, General Motors with record truck sales, and Jazz Pharmaceuticals with positive clinical trial results. The fund initiated positions in Garrett Motion and EnerSys based on attractive valuations and strong cash flow metrics, while trimming Sandisk and Amkor Technology given their strong performance. Key detractors included underweights to momentum stocks and struggles in holdings like HP and Harley-Davidson. The Federal Reserve's gradual easing cycle provided market support, though mid-caps lagged large- and small-caps during the quarter. Looking forward, the managers remain committed to their disciplined value approach, noting that mid- and small-cap value stocks continue to trade at attractive multiples despite strong relative performance over recent years.
The Harbor Mid Cap Value Fund seeks to identify undervalued mid-cap companies using a quantitative model that evaluates fundamental undervaluation, past negative market sentiment, and recent momentum while controlling incremental risk relative to the benchmark.
The fund remains committed to its disciplined value investment approach and is excited about opportunities available among mid- and small-cap value stocks. While large-cap U.S. stocks appear quite expensive, the mid- and small-cap segments continue to trade at attractive multiples, particularly value-oriented stocks.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 21 2026 | 2025 Q4 | AMKR, BK, CFG, COIN, EA, ENS, EXPE, FOXA, GM, GTX, HIW, HLF, HOG, HOOD, HPQ, JAZZ, KR, NEU, OC, PHM, PLAB, PVH, SNDK, STT, TXT, WBD, WDC | Buybacks, consumer discretionary, dividends, financials, mid cap, technology, value |
GTX ENS EA AMKR |
The fund maintains its disciplined value investment approach, seeking high-quality, profitable companies that generate cash, pay dividends, and repurchase shares. Mid- and small-cap value stocks… |
| Oct 17 2025 | 2025 Q3 | ARW, CBRE, WWD | aerospace, industrials, Mid Caps, semiconductors, technology | WWD US | The fund highlights opportunities in high-quality mid-cap companies across industrial and technology sectors, capitalizing on market volatility and durable earnings power. AI infrastructure investment continues… |
| Jul 22 2025 | 2025 Q2 | ADT, MCK, NRG, TAP | Factor Investing, fundamentals, Mean reversion, mid cap value, Valuation gap | - | The letter focuses on significant valuation dispersion between growth and value stocks, particularly in the mid-cap segment. Management argues that deep value stocks have been… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
BuybacksShare repurchases in 2024 and 2025 hit consecutive records as companies raced to meet Tokyo Stock Exchange capital efficiency mandates. Buybacks were a primary driver of the market's 20% climb in the first half of FY2025. |
Share Repurchases Capital Efficiency TSE Mandates Shareholder Returns Records | |
ValueManager emphasizes investing in controlled companies trading at significant discounts to NAV, with European holding companies showing discounts of 30-68%. The strategy focuses on securities mispricing where real value exists, contrasting with overvalued technology stocks. |
Discounts NAV Mispricing Undervalued Controlled | |
| 2025 Q3 |
IndustrialsThe fund increased exposure to high-quality industrial businesses with potential for cyclical upturn. Added Quanta Services for AI data center build-out, Hubbell for electrical grid upgrades, Old Dominion for freight cycle recovery, and Waste Connections for secondary market focus. |
Infrastructure Automation Transportation Electrical Equipment Waste Management |
Technology |
||
| 2025 Q2 |
ValueThe manager continues to find attractive value opportunities despite expensive markets, purchasing undervalued companies like Centene, GlaxoSmithKline, Carrefour and PayPal trading at low multiples with strong fundamentals. |
Undervalued Low Multiples Contrarian Opportunistic |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 17, 2025 | Fund Letters | Josef Lakonishok | WWD US | Woodward, Inc. | Industrials | Aerospace & Defense | Bull | NASDAQ | Aerospace, aftermarket, Defense, growth, Margins, recovery, valuation | Login |
| Jan 21, 2026 | Fund Letters | Josef Lakonishok | GTX | Garrett Motion Inc. | Consumer Discretionary | Auto Parts | Bull | NASDAQ | Auto parts, buybacks, cashflow, Momentum, Turbochargers | Login |
| Jan 21, 2026 | Fund Letters | Josef Lakonishok | ENS | EnerSys | Industrials | Electrical Components & Equipment | Bull | New York Stock Exchange | Batteries, buybacks, cashflow, Energy systems, Margins | Login |
| Jan 21, 2026 | Fund Letters | Josef Lakonishok | EA | Electronic Arts Inc. | Communication Services | Interactive Home Entertainment | Bull | NASDAQ | acquisition, Exits, Takeout, valuation, Video games | Login |
| Jan 21, 2026 | Fund Letters | Josef Lakonishok | AMKR | Amkor Technology, Inc. | Information Technology | Semiconductor Assembly & Testing Services | Bear | NASDAQ | AI, cashflow, Momentum, semiconductors, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| AMKR | Amkor Technology Inc. (AMKR) was the top performer. AMKR saw a re-rating that centered around AI/Advanced Packaging excitement, which is being driven by significant demand for AI compute. This was bolstered in November when NVIDIA Corp. (NVDA) cited AMKR has an Advanced Packing partner as part of a broader investment cycle we are seeing to reshore and expand chip production capacity in the U.S. |
| BK | Bank of New York Mellon, the largest financial custodian in the world, advanced amid strong earnings results. America's oldest bank is an early leader in the adoption of AI, with a multiyear partnership with OpenAI. |
| COIN | Coinbase (a new position) experienced extended volatility as crypto currency prices softened into December. We continued to build exposure to our financial deregulation and disintermediation of financial services theme through the purchase of Coinbase, to gain exposure to the regulated infrastructure of cryptocurrencies - particularly stablecoins - following the passage of the GENIUS Act by Congress. |
| EA | We sold our position in Electronic Arts in the Communication Services sector. Electronic Arts did well in 2025, advancing approximately 40% for the year. In late September, the company announced an agreement to be acquired by Saudi Arabia's Public Investment Fund, Silver Lake, and Affinity Partners for $55 billion. The Fund often benefits from takeovers, as the companies we hold tend to be attractively priced, solid businesses that are undervalued, as was the case with Electronic Arts. |
| ENS | We also initiated a position in EnerSys in the Industrials sector. EnerSys designs, manufactures, and distributes energy systems and batteries to customers worldwide. The stock ranks high on multiple cash flow and forecast earnings measure — our two most important blocks of valuation. The company typically pays a dividend and has been aggressively buying back stock, which we view positively. |
| EXPE | Expedia, which was a recent purchase, also posted strong results and raised the outlook going forward. We added to our exposure to Expedia and continue to hold both stocks in the Fund. |
| FOXA | Fox Corporation was sold in December as its share price now more fully reflected its core operational strength and the value of ancillary assets. Over our investment period the share price doubled as the market reassessed Fox's competitive positioning and earnings quality. |
| GM | For insight into the real economy operating beneath this AI and data center boom, we must look elsewhere within the S&P 500, including bellwethers like General Motors |
| GTX | We initiated a position in Garrett Motion, an automotive parts and equipment company in the Consumer Discretionary sector. The company designs, manufactures, and sells turbocharger and electric boosting technologies for commercial vehicles. Garrett ranks high on multiple cash flow and forecast earnings measures on our model. The company typically pays a dividend and has been aggressively buying back stock, which we view positively. |
| HIW | Highwoods Properties (-17.4%) weighed most heavily on results as higher interest rates continued to pressure office valuations. |
| HLF | Herbalife (HLF US) is the second largest multi-level marketing business in the world. The company's brand and portfolio are focused on wellness, with meal-replacement weight loss products as their largest category, followed by supplements, energy products, and other products, including promotional items for its distributors. Herbalife's stock outperformed after the company reported 3Q25 results at the high-end of guidance. The results showed early signs that the business has stabilized, and the turnaround is gaining traction. |
| HOG | Harley Davidson struggled after reporting sharp declines in motorcycle revenue, increased costs, and pricing pressure. We continue to hold Harley Davidson in the Fund. |
| HOOD | Robinhood Markets, Inc. is a digital brokerage platform serving retail investors. Shares detracted during the quarter following robust performance over the first nine months of the year. While overall activity levels remain strong, Robinhood experienced some softening in customer engagement in November, with cryptocurrency trading volumes in particular declining on both a month-over-month and year-over-year basis. |
| HPQ | HP has not benefited much from the AI frenzy like other technology companies. The company has seen rising costs and projected lower-than-expected earnings for 2026. We did not make any changes to our position in HP and continue to hold the stock in the Fund. |
| JAZZ | Jazz Pharmaceuticals, in the Health Care sector, was a top performer, advancing nearly 30% driven by strong third quarter performance and positive clinical trial results for one of its cancer drugs. We continue to hold the company in the Fund. |
| NEU | NEU was a weaker performer as a softer global environment (mostly China's slowdown) pressured Petroleum Additives volumes and margins. The Specialty Materials business had lumpy demand, which weighed on results. Lower oil prices reduced operating leverage. Despite near-term pressure, we continue to view NEU as a strong business with disciplined capital allocation, balance sheet flexibility, and strong cash flow generation. |
| PHM | PulteGroup, in the homebuilding industry, struggled due to slowing orders and margin pressures despite a slight decrease in mortgage rates. We continue to hold PulteGroup in the Fund. |
| PVH | Branded apparel company PVH was a detractor for the quarter and the year. The company's shares experienced considerable price fluctuations, while our appraisal stayed flattish, which was disappointing. This is a company that will likely always have more quarterly earnings volatility than others. The good news is that the long-run earnings per share power remains intact at over $10 per share. |
| SNDK | Following strong performance in the third quarter, Information Technology holding Sandisk significantly outperformed again in the fourth quarter. AI-driven demand for storage led to strong earnings and increases in revenue growth and margins. We trimmed our position in Sandisk given the run-up in the stock. |
| STT | Beat on both EPS and revenue on strong servicing and management fees income; AUC & AUM were both higher than expected, benefitting from market appreciation as well as inflows. Deposit growth was disappointing |
| WBD | Warner Bros Discovery (WBD) was the top contributor during the quarter. The U.S.-headquartered media company's stock price surged as multiple parties submitted offers to acquire all or part of the business. Following several rounds of bidding, WBD announced an agreement to sell its Streaming and Studios business to Netflix, while spinning the Global Networks business to shareholders. Paramount Skydance subsequently made a direct $30 per share offer to shareholders for the entire company. We are pleased with the steps the WBD board has taken thus far to unlock shareholder value. We will continue to closely monitor developments as this bidding war unfolds. |
| WDC | The fund maintained an overweight position in technology hardware, storage & peripherals company Western Digital. Early in 2025, the company announced a strategic spin-off separating its flash division as SanDisk, while Western Digital focused primarily on the hard disk drive (HDD) market, allowing the company to be valued as a standalone HDD leader. The continued surge in AI infrastructure demand massively boosted the demand for high-capacity HDDs, and Western Digital benefited from an increase in purchase orders from major hyperscalers extending into 2026 and even 2027. |
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