Harbor Mid Cap Value Fund

Investor Summary

Dr. Josef Lakonishok serves as the primary portfolio manager and is CEO, CIO, and founding partner of LSV Asset Management, which has subadvised the fund since September 30, 2004. LSV Asset Management was founded in 1994 and manages approximately $112 billion in assets. Dr. Lakonishok is a renowned academic and practitioner in behavioral finance and value investing. The investment team includes Menno Vermeulen, who has co-managed the fund since 2004 as Portfolio Manager and Partner of LSV Asset Management, along with team members Greg Sleight, Guy Lakonishok, and Puneet Mansharamani.

Fund Strategy

Harbor Mid Cap Value Fund seeks long-term total return by investing at least 80% of its net assets in equity securities, principally common stocks of mid-cap companies which are undervalued in the marketplace at the time of purchase but have potential for appreciation. The fund employs LSV Asset Management's systematic quantitative approach that exploits judgmental biases and behavioral weaknesses that influence investor decisions. The investment strategy uses a bottom-up, contrarian value approach targeting the 1,000 largest publicly traded U.S. companies, focusing on per-share growth rates across six key metrics and preferring stocks in cheaper valuation deciles where low valuations provide an advantageous starting point.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
9.12%	4.64%	4.64%

Executive Summary

The Harbor Mid Cap Value Fund returned 4.76% in Q1 2026, outperforming the Russell Midcap Value Index's 3.68% return during a turbulent quarter marked by AI concerns, tariff uncertainty, and Middle East geopolitical shocks. The fund benefited from strong stock selection in Information Technology, Energy, and other sectors, with notable contributors including Sandisk (AI-driven storage demand), energy holdings like Matador Resources and APA Corp (oil price surge from Iran conflict), and CF Industries (fertilizer price spike). The quarter saw continued rotation from mega-cap technology toward smaller, value-oriented stocks, which favored the fund's positioning. Portfolio activity included trimming winners like Sandisk and Matador, initiating positions in top-ranked Smithfield Foods and Commercial Metals, and selling Flex due to valuation concerns. The fund trades at an attractive 10x forward earnings versus 16x for the benchmark, with management remaining committed to their disciplined quantitative value approach and excited about mid- and small-cap value opportunities.

Forward Outlook

Manager remains committed to disciplined value investment approach and is excited about opportunities among mid- and small-cap value stocks. Fund is attractively priced relative to benchmark at 10x forward earnings versus 16x for value benchmark. Holdings are high-quality, profitable companies with potential to generate cash and pay dividends.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Apr 21 2026	2026 Q1	ANGI, APA, CF, CMC, DINO, EXPE, FLEX, FOXA, HAL, JBL, MTDR, SFD, UPWK, WDC	AI, energy, mid cap, quantitative, Rotation, small caps, value	-	Harbor Mid Cap Value outperformed during Q1's market turbulence, benefiting from AI storage demand (Sandisk), energy surge from Iran conflict (Matador, APA), and ongoing rotation toward value stocks. Fund trades at attractive 10x forward earnings versus 16x benchmark, with management excited about mid-cap value opportunities as largest companies remain expensive.
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	Harbor Mid Cap Value Fund outperformed its benchmark by 265 basis points in Q4, driven by strong stock selection in AI-beneficiary Sandisk, record truck sales at General Motors, and positive clinical results at Jazz Pharmaceuticals. The fund continues finding attractive opportunities in mid-cap value stocks despite broader market strength in AI-related names.
Oct 17 2025	2025 Q3	AL, AMAT, ANSS, ARW, CBRE, CHX, COLD, CTRA, DRI, GPN, HP, ICE, MAS, MUR, RGA, RJF, RSG, SF, SMG, ST, SWKS, ULTA, WWD	aerospace, AI, Commercial real estate, fundamentals, mid cap, Quality, Trade Policy, value	WWD US	Harbor Mid Cap Fund's fundamentals-based approach faced momentum trading headwinds in Q2 2025, underperforming despite benefiting from sector overweights in Industrials and Technology. Trade policy volatility created opportunities in quality businesses trading below intrinsic value. Strong aerospace and electronics performance offset commercial real estate weakness. Management maintains disciplined approach targeting companies with durable competitive advantages.
Jul 22 2025	2025 Q2	ADT, BK, CNHI, FLEX, FOXA, HIG, HPQ, JAZZ, JBL, KR, MCK, NRG, ORI, PHM, SNX, STT, SYF, TAP, TXT, WDC	earnings, energy, financials, mid cap, technology, value	ADT MCK	Harbor Mid Cap Value Fund underperformed in Q2 2025 as value stocks lagged the technology-driven market rally. Despite headwinds from deeper value discipline and smaller cap bias, the fund benefits from attractive valuations trading at 10x forward earnings. Strong contributors included AI beneficiary NRG Energy and technology stocks, while the outlook remains compelling for patient value investors.
Mar 31 2025	2025 Q1	AIG, ALSN, AMKR, ATKR, BK, DOX, EBAY, FOXA, HIG, HPQ, KR, NFG, NRG, ORI, PHM, PVH, STT, TOL, UAL, UGI	consumer discretionary, financials, mid cap, Trade Policy, Utilities, value	-	Harbor Mid Cap Value Fund underperformed in Q1 2025 due to trade policy uncertainty impacting smaller-cap stocks despite value outperforming growth. Strong Financials and Utilities performance was offset by weakness in Technology and Industrials. The fund maintains deep value discipline with historically wide valuation spreads creating opportunities in mid-cap segments.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Apr 21 2026

2026 Q1

ANGI, APA, CF, CMC, DINO, EXPE, FLEX, FOXA, HAL, JBL, MTDR, SFD, UPWK, WDC

AI, energy, mid cap, quantitative, Rotation, small caps, value

Harbor Mid Cap Value outperformed during Q1's market turbulence, benefiting from AI storage demand (Sandisk), energy surge from Iran conflict (Matador, APA), and ongoing rotation toward value stocks. Fund trades at attractive 10x forward earnings versus 16x benchmark, with management excited about mid-cap value opportunities as largest companies remain expensive.

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

Harbor Mid Cap Value Fund outperformed its benchmark by 265 basis points in Q4, driven by strong stock selection in AI-beneficiary Sandisk, record truck sales at General Motors, and positive clinical results at Jazz Pharmaceuticals. The fund continues finding attractive opportunities in mid-cap value stocks despite broader market strength in AI-related names.

Oct 17 2025

2025 Q3

AL, AMAT, ANSS, ARW, CBRE, CHX, COLD, CTRA, DRI, GPN, HP, ICE, MAS, MUR, RGA, RJF, RSG, SF, SMG, ST, SWKS, ULTA, WWD

aerospace, AI, Commercial real estate, fundamentals, mid cap, Quality, Trade Policy, value

WWD US

Harbor Mid Cap Fund's fundamentals-based approach faced momentum trading headwinds in Q2 2025, underperforming despite benefiting from sector overweights in Industrials and Technology. Trade policy volatility created opportunities in quality businesses trading below intrinsic value. Strong aerospace and electronics performance offset commercial real estate weakness. Management maintains disciplined approach targeting companies with durable competitive advantages.

Jul 22 2025

2025 Q2

ADT, BK, CNHI, FLEX, FOXA, HIG, HPQ, JAZZ, JBL, KR, MCK, NRG, ORI, PHM, SNX, STT, SYF, TAP, TXT, WDC

earnings, energy, financials, mid cap, technology, value

ADT
MCK

Harbor Mid Cap Value Fund underperformed in Q2 2025 as value stocks lagged the technology-driven market rally. Despite headwinds from deeper value discipline and smaller cap bias, the fund benefits from attractive valuations trading at 10x forward earnings. Strong contributors included AI beneficiary NRG Energy and technology stocks, while the outlook remains compelling for patient value investors.

Mar 31 2025

2025 Q1

AIG, ALSN, AMKR, ATKR, BK, DOX, EBAY, FOXA, HIG, HPQ, KR, NFG, NRG, ORI, PHM, PVH, STT, TOL, UAL, UGI

consumer discretionary, financials, mid cap, Trade Policy, Utilities, value

Harbor Mid Cap Value Fund underperformed in Q1 2025 due to trade policy uncertainty impacting smaller-cap stocks despite value outperforming growth. Strong Financials and Utilities performance was offset by weakness in Technology and Industrials. The fund maintains deep value discipline with historically wide valuation spreads creating opportunities in mid-cap segments.

QUARTER	THEMES	TAGS
2026 Q1	AI AI concerns disrupted technology shares in January as new capabilities threatened the Software-as-a-Service business model. The fund benefited from AI-driven demand for storage through holdings like Sandisk, while also noting potential AI disruption risks in sectors like online travel.	Software Storage Disruption Technology SaaS
	Oil Energy sector surged 38% as crude oil prices soared above $100 per barrel following the US-Israeli military operation against Iran and closure of the Strait of Hormuz. Energy holdings including Matador Resources, APA Corp, and Halliburton were significant contributors to performance.	Energy Geopolitical Iran Strait of Hormuz Exploration
	Value Notable rotation away from mega-cap technology toward smaller, more value-oriented stocks persisted throughout the quarter. Mid-cap value stocks outperformed large-cap, with the fund trading at 10x forward earnings compared to 16x for the value benchmark.	Rotation Mega-cap Valuation Outperformance Earnings
	Small Caps Small- and mid-cap stocks fared better than large-cap during the turbulent quarter, with Russell 2000 gaining 0.9% while Russell 1000 declined 4.2%. Manager finds small-cap and mid-cap stocks remain relatively attractive while largest companies are expensive.	Outperformance Attractive Expensive Large-cap Russell
2025 Q4	AI AI remains transformative but markets are shifting from hype to show-me phase. The industry has spent over $400 billion on capex while producing roughly $50 billion in revenues. Physical constraints like power shortages and build delays are challenging assumptions of frictionless scaling.	Artificial Intelligence Technology Capex Infrastructure Valuations
	Private Credit Private markets are finally offering opportunity as supply and demand balance has shifted. Traditional institutions are over-allocated, distributions have dried up, and scarcity of capital gives patient liquidity providers leverage on price and terms. Firm is launching a private markets fund in Q1 2026.	Private Markets Illiquid Strategies Secondaries Real Estate Credit
	Commercial Real Estate Real estate is where price and replacement cost have meaningfully diverged. Valuations have fallen approximately 20% since 2022 while construction costs have risen 20-30%. This gap creates a powerful setup for patient capital to buy high-quality assets below replacement cost.	Real Estate Valuations Construction Costs Refinancing Patient Capital
2025 Q3	Trade Policy Trade tensions dominated headlines with Liberation Day tariffs affecting imports from China, Europe, and Canada causing significant market volatility. Markets initially dropped 19% following tariff announcements before recovering as policy reversals and bilateral negotiations helped stabilize conditions. Long-term implications of trade policy changes remain uncertain for supply chains and corporate profitability.	Tariffs China Supply Chain Inflation Retaliation
	AI Investment in AI infrastructure remained a key driver of performance, bolstering demand for semiconductor, cloud, industrial, and technology equipment companies. Information Technology led all sectors with 21.99% gains in the quarter, driven by continued AI infrastructure investment themes.	Infrastructure Semiconductors Cloud Technology Equipment
	Commercial Real Estate CBRE Group, the world's largest commercial real estate services company, faced headwinds as tariff uncertainty caused customers to delay decisions on new leases, property purchases, and management opportunities. Despite challenges, the broader return to office trend is expected to continue supporting the sector.	Office Leasing Property Management Return to Office Services
	Aerospace Woodward demonstrated strong performance in aerospace with better-than-consensus earnings driven by strong demand for new defense equipment and higher commercial aftermarket activity. The company showed continued share gains and margin expansion through transformation from component to systems supplier in commercial aircraft engines.	Defense Commercial Aviation Aftermarket Systems Manufacturing
2025 Q2	Value Value stocks were left behind in the market rally and continue to trade at significant discounts to their growth counterparts, enhancing the potential for outperformance if valuations between growth and value stocks revert to a more normal, historical average. The Fund trades at just over 10x forward earnings and 7x cash flow, which are significant discounts to the core and value benchmark.	Value Discount Valuation Growth P/E
	AI NRG Energy continues to benefit from rising electricity demand needed to fuel the AI revolution. The rally was powered primarily by large-cap technology stocks, with the Information Technology sector gaining 24% and contributing more than half of the S&P 500's quarterly gains.	AI Electricity Technology Demand
	Earnings Supporting factors included strong second quarter corporate earnings, particularly in Information Technology. Jabil handily beat analysts' estimates for revenue, earnings, and operating income. Flex reported solid earnings and raised its guidance going forward.	Earnings Revenue Guidance Estimates
2025 Q1	Value The fund maintains a deep value discipline with stretched valuation spreads remaining historically wide. The portfolio continues to trade at discounts relative to the benchmark, focusing on high-quality, profitable companies that generate strong cash flow, pay dividends, and actively buy back shares.	Valuation Discount Quality Cash Flow Dividends
	Trade Policy Uncertainty created by tariffs and evolving global trade policies significantly impacted smaller-cap companies during the quarter. Despite potential long-term benefits from onshoring of production, trade policy uncertainty drove market turbulence and sentiment swings throughout March.	Tariffs Onshoring Uncertainty Global Trade
	Small Caps Small- and mid-cap value stocks lagged large-cap counterparts during the quarter, with the smaller-cap bias detracting from performance. The underperformance further expanded the valuation gap between small and large companies, creating compelling opportunities within mid- and smaller-cap segments.	Mid Cap Valuation Gap Opportunities Underperformance

QUARTER

THEMES

AI

AI concerns disrupted technology shares in January as new capabilities threatened the Software-as-a-Service business model. The fund benefited from AI-driven demand for storage through holdings like Sandisk, while also noting potential AI disruption risks in sectors like online travel.

Software Storage Disruption Technology SaaS

Oil

Energy sector surged 38% as crude oil prices soared above $100 per barrel following the US-Israeli military operation against Iran and closure of the Strait of Hormuz. Energy holdings including Matador Resources, APA Corp, and Halliburton were significant contributors to performance.

Energy Geopolitical Iran Strait of Hormuz Exploration

Value

Notable rotation away from mega-cap technology toward smaller, more value-oriented stocks persisted throughout the quarter. Mid-cap value stocks outperformed large-cap, with the fund trading at 10x forward earnings compared to 16x for the value benchmark.

Rotation Mega-cap Valuation Outperformance Earnings

Small Caps

Small- and mid-cap stocks fared better than large-cap during the turbulent quarter, with Russell 2000 gaining 0.9% while Russell 1000 declined 4.2%. Manager finds small-cap and mid-cap stocks remain relatively attractive while largest companies are expensive.

Outperformance Attractive Expensive Large-cap Russell

2025 Q4

AI

AI remains transformative but markets are shifting from hype to show-me phase. The industry has spent over $400 billion on capex while producing roughly $50 billion in revenues. Physical constraints like power shortages and build delays are challenging assumptions of frictionless scaling.

Artificial Intelligence Technology Capex Infrastructure Valuations

Private Credit

Private markets are finally offering opportunity as supply and demand balance has shifted. Traditional institutions are over-allocated, distributions have dried up, and scarcity of capital gives patient liquidity providers leverage on price and terms. Firm is launching a private markets fund in Q1 2026.

Private Markets Illiquid Strategies Secondaries Real Estate Credit

Commercial Real Estate

Real estate is where price and replacement cost have meaningfully diverged. Valuations have fallen approximately 20% since 2022 while construction costs have risen 20-30%. This gap creates a powerful setup for patient capital to buy high-quality assets below replacement cost.

Real Estate Valuations Construction Costs Refinancing Patient Capital

2025 Q3

Trade Policy

Trade tensions dominated headlines with Liberation Day tariffs affecting imports from China, Europe, and Canada causing significant market volatility. Markets initially dropped 19% following tariff announcements before recovering as policy reversals and bilateral negotiations helped stabilize conditions. Long-term implications of trade policy changes remain uncertain for supply chains and corporate profitability.

Tariffs China Supply Chain Inflation Retaliation

AI

Investment in AI infrastructure remained a key driver of performance, bolstering demand for semiconductor, cloud, industrial, and technology equipment companies. Information Technology led all sectors with 21.99% gains in the quarter, driven by continued AI infrastructure investment themes.

Infrastructure Semiconductors Cloud Technology Equipment

Commercial Real Estate

CBRE Group, the world's largest commercial real estate services company, faced headwinds as tariff uncertainty caused customers to delay decisions on new leases, property purchases, and management opportunities. Despite challenges, the broader return to office trend is expected to continue supporting the sector.

Office Leasing Property Management Return to Office Services

Aerospace

Woodward demonstrated strong performance in aerospace with better-than-consensus earnings driven by strong demand for new defense equipment and higher commercial aftermarket activity. The company showed continued share gains and margin expansion through transformation from component to systems supplier in commercial aircraft engines.

Defense Commercial Aviation Aftermarket Systems Manufacturing

2025 Q2

Value

Value stocks were left behind in the market rally and continue to trade at significant discounts to their growth counterparts, enhancing the potential for outperformance if valuations between growth and value stocks revert to a more normal, historical average. The Fund trades at just over 10x forward earnings and 7x cash flow, which are significant discounts to the core and value benchmark.

Value Discount Valuation Growth P/E

AI

NRG Energy continues to benefit from rising electricity demand needed to fuel the AI revolution. The rally was powered primarily by large-cap technology stocks, with the Information Technology sector gaining 24% and contributing more than half of the S&P 500's quarterly gains.

AI Electricity Technology Demand

Earnings

Supporting factors included strong second quarter corporate earnings, particularly in Information Technology. Jabil handily beat analysts' estimates for revenue, earnings, and operating income. Flex reported solid earnings and raised its guidance going forward.

Earnings Revenue Guidance Estimates

2025 Q1

Value

The fund maintains a deep value discipline with stretched valuation spreads remaining historically wide. The portfolio continues to trade at discounts relative to the benchmark, focusing on high-quality, profitable companies that generate strong cash flow, pay dividends, and actively buy back shares.

Valuation Discount Quality Cash Flow Dividends

Trade Policy

Uncertainty created by tariffs and evolving global trade policies significantly impacted smaller-cap companies during the quarter. Despite potential long-term benefits from onshoring of production, trade policy uncertainty drove market turbulence and sentiment swings throughout March.

Tariffs Onshoring Uncertainty Global Trade

Small Caps

Small- and mid-cap value stocks lagged large-cap counterparts during the quarter, with the smaller-cap bias detracting from performance. The underperformance further expanded the valuation gap between small and large companies, creating compelling opportunities within mid- and smaller-cap segments.

Mid Cap Valuation Gap Opportunities Underperformance

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
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
Oct 17, 2025	Fund Letters	Josef Lakonishok	WWD US	Woodward, Inc.	Industrials	Aerospace & Defense	Bull	NASDAQ	Aerospace, aftermarket, Defense, growth, Margins, recovery, valuation	Login
Jun 30, 2025	Fund Letters	Harbor Mid Cap Value Fund	ADT	ADT Inc	Consumer Discretionary	Household Durables	Bull	NYSE	Consumer Discretionary, dividend, Quantitative Screening, Residential Services, security services, Smart home, Value	Login
Jun 30, 2025	Fund Letters	Harbor Mid Cap Value Fund	MCK	McKesson Corporation	Health Care	Health Care Distributors	Bear	NYSE	Distribution, exit strategy, Health Care, pharmaceuticals, Price momentum, Share Buybacks, valuation	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Jan 21, 2026

Fund Letters

Josef Lakonishok

GTX

Garrett Motion Inc.

Consumer Discretionary

Auto Parts

Bull

NASDAQ

Auto parts, buybacks, cashflow, Momentum, Turbochargers

Jan 21, 2026

Fund Letters

Josef Lakonishok

ENS

EnerSys

Industrials

Electrical Components & Equipment

Bull

New York Stock Exchange

Batteries, buybacks, cashflow, Energy systems, Margins

Jan 21, 2026

Fund Letters

Josef Lakonishok

Electronic Arts Inc.

Communication Services

Interactive Home Entertainment

Bull

NASDAQ

acquisition, Exits, Takeout, valuation, Video games

Jan 21, 2026

Fund Letters

Josef Lakonishok

AMKR

Amkor Technology, Inc.

Information Technology

Semiconductor Assembly & Testing Services

Bear

NASDAQ

AI, cashflow, Momentum, semiconductors, valuation

Oct 17, 2025

Fund Letters

Josef Lakonishok

WWD US

Woodward, Inc.

Industrials

Aerospace & Defense

Bull

NASDAQ

Aerospace, aftermarket, Defense, growth, Margins, recovery, valuation

Jun 30, 2025

Fund Letters

Harbor Mid Cap Value Fund

ADT

ADT Inc

Consumer Discretionary

Household Durables

Bull

NYSE

Consumer Discretionary, dividend, Quantitative Screening, Residential Services, security services, Smart home, Value

Jun 30, 2025

Fund Letters

Harbor Mid Cap Value Fund

MCK

McKesson Corporation

Health Care

Health Care Distributors

Bear

NYSE

Distribution, exit strategy, Health Care, pharmaceuticals, Price momentum, Share Buybacks, valuation

TICKER	COMMENTARY
WDC	The top-performing stock in the Information Technology sector once again was Sandisk, as the strong performance of stocks related to the AI-driven demand for storage continued. While we continue to hold Sandisk, we trimmed the position in the quarter given the run-up in the stock.
ARW	Arrow Electronics also did well in the Information Technology sector after reporting strong fourth quarter earnings with the recovery in the semiconductor market and strong demand for AI infrastructure and cloud services.
MTDR	Matador Resources and APA Corp., both E&P companies, were up significantly due to the Middle East conflict. We trimmed our exposure to Matador Resources.
APA	Matador Resources and APA Corp., both E&P companies, were up significantly due to the Middle East conflict.
HAL	Halliburton in the equipment and services group and refiner HF Sinclair also did well in the quarter.
DINO	Halliburton in the equipment and services group and refiner HF Sinclair also did well in the quarter.
CF	Other top contributors in the quarter included CF Industries in the Materials sector. Much like Energy stocks, CF Industries benefited from the turmoil in the Middle East, as fertilizer prices spiked in the quarter.
ALSN	Allison Transmission rose to new highs in the first quarter, helped by optimistic 2026 earnings and revenue expectations.
FOXA	Fox Corp. was down nearly 20% over concerns about falling net income and ongoing subscriber declines.
ANGI	Angi's stock came under pressure after reporting disappointing fourth quarter revenue and earnings. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.
EXPE	While Expedia Group beat fourth quarter 2025 earnings estimates, weak travel demand to and from the U.S. and the potential for AI disruption in the online travel business weighed on the stock in the first quarter. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.
UPWK	Upwork declined after reducing 2026 guidance. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.
SFD	We initiated a position in Smithfield Foods, the largest pork producer in the U.S. in the packaged foods and meats industry. The company went public in a January 2025 IPO after being taken private in 2013. Smithfield Foods ranks high on multiple cash flow and forecast earnings measures, our two most important blocks of valuation measures. Overall, the stock ranks in the top 5% in our stock ranking universe, which led to the first quarter purchase.
CMC	We also initiated a position in Commercial Metals, a steel company in the Materials sector. The stock ranks high on multiple cash flow and forecast earnings measures, our two most important blocks of valuation measures. Overall, the stock ranks in the top 5% in our stock ranking universe, which led to the first quarter purchase.
FLEX	We sold our position in Flex in the Information Technology sector. Flex has done extremely well the past few years and was up over 100% in the trailing 12 months. While momentum kept the stock in our hold range for some time, earnings and cash flow did not keep pace with the stock's price, and it became less attractive from a valuation perspective. While the company was buying back shares, it did not pay a dividend. The overall rank fell out of the hold range in the first quarter, and the stock was sold.
JBL	We trimmed our position in Jabil, also in the Information Technology sector. Jabil has done well in recent years as the company has capitalized on the rapid growth of AI. While we continue to hold the stock, the ranking has deteriorated as earnings and cash flow have not kept up with the price increases. However, it remains in our hold range even though valuation scores have deteriorated. The strong momentum scores and the company's aggressive stock repurchases are both positives in our model. Given the run-up in the stock, we trimmed our position in the first quarter.

TICKER

COMMENTARY

WDC

The top-performing stock in the Information Technology sector once again was Sandisk, as the strong performance of stocks related to the AI-driven demand for storage continued. While we continue to hold Sandisk, we trimmed the position in the quarter given the run-up in the stock.

ARW

Arrow Electronics also did well in the Information Technology sector after reporting strong fourth quarter earnings with the recovery in the semiconductor market and strong demand for AI infrastructure and cloud services.

MTDR

Matador Resources and APA Corp., both E&P companies, were up significantly due to the Middle East conflict. We trimmed our exposure to Matador Resources.

APA

Matador Resources and APA Corp., both E&P companies, were up significantly due to the Middle East conflict.

HAL

Halliburton in the equipment and services group and refiner HF Sinclair also did well in the quarter.

DINO

Halliburton in the equipment and services group and refiner HF Sinclair also did well in the quarter.

Other top contributors in the quarter included CF Industries in the Materials sector. Much like Energy stocks, CF Industries benefited from the turmoil in the Middle East, as fertilizer prices spiked in the quarter.

ALSN

Allison Transmission rose to new highs in the first quarter, helped by optimistic 2026 earnings and revenue expectations.

FOXA

Fox Corp. was down nearly 20% over concerns about falling net income and ongoing subscriber declines.

ANGI

Angi's stock came under pressure after reporting disappointing fourth quarter revenue and earnings. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.

EXPE

While Expedia Group beat fourth quarter 2025 earnings estimates, weak travel demand to and from the U.S. and the potential for AI disruption in the online travel business weighed on the stock in the first quarter. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.

UPWK

Upwork declined after reducing 2026 guidance. We did not make any trades in Expedia, Fox, or Upwork, but added to our position in Angi.

SFD

We initiated a position in Smithfield Foods, the largest pork producer in the U.S. in the packaged foods and meats industry. The company went public in a January 2025 IPO after being taken private in 2013. Smithfield Foods ranks high on multiple cash flow and forecast earnings measures, our two most important blocks of valuation measures. Overall, the stock ranks in the top 5% in our stock ranking universe, which led to the first quarter purchase.

CMC

We also initiated a position in Commercial Metals, a steel company in the Materials sector. The stock ranks high on multiple cash flow and forecast earnings measures, our two most important blocks of valuation measures. Overall, the stock ranks in the top 5% in our stock ranking universe, which led to the first quarter purchase.

FLEX

We sold our position in Flex in the Information Technology sector. Flex has done extremely well the past few years and was up over 100% in the trailing 12 months. While momentum kept the stock in our hold range for some time, earnings and cash flow did not keep pace with the stock's price, and it became less attractive from a valuation perspective. While the company was buying back shares, it did not pay a dividend. The overall rank fell out of the hold range in the first quarter, and the stock was sold.

JBL

We trimmed our position in Jabil, also in the Information Technology sector. Jabil has done well in recent years as the company has capitalized on the rapid growth of AI. While we continue to hold the stock, the ranking has deteriorated as earnings and cash flow have not kept up with the price increases. However, it remains in our hold range even though valuation scores have deteriorated. The strong momentum scores and the company's aggressive stock repurchases are both positives in our model. Given the run-up in the stock, we trimmed our position in the first quarter.

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Investment Summary

Investor Summary

Fund Strategy

FUND PERFORMANCE AS OF 31st March 2026

Investor Letters

Latest Executive Summary:

Executive Summary

Core Thesis

Forward Outlook

Investment Themes

AI

Oil

Value

Small Caps

AI

Private Credit

Commercial Real Estate

Trade Policy

AI

Commercial Real Estate

Aerospace

Value

AI

Earnings

Value

Trade Policy

Small Caps

Investor Pitches

Current Portfolio as of ( 31st March 2026 )

Key Risks identified by Manager:

Key catalysts include:

Portfolio Implications

Ticker Commentary

Josef Lakonishok Top Holdings

Recent Buys (13F)

Recent Sells (13F)

13F Sector Summary

Portfolio Distribution

Latest 13D & 13G Filings

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Harbor Mid Cap Value Fund