## [# ETF Spotlight: HAPI Bets on Employee Happiness](/sections/features/etf-spotlight-hapi-bets-employee-happiness)
# ETF Spotlight: HAPI Bets on Employee Happiness
The Irrational Capital fund has outperformed the S&P 500 year-to-date.
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[By James Rubin](/authors/james-rubin)
Sep 06, 2024
Edited by: Ron Day
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Do companies with happier workforces outperform organizations with less contented employees?
Irrational Capital's [$333 million](https://www.harborcapital.com/etf/hapi/) in assets [**Harbor Corporate Culture ETF (HAPI)** ](/HAPI)indicates that they do, or at least shows a strong correlation between performance and workers' feelings about the places for which they work.
Despite a slight dip over the past week, HAPI is up nearly 19% year-to-date, better than the S&P 500 index's 16%-plus returns over the same period. The fund's roughly 65% returns since its inception in October 2022 through a partnership between Irrational Capital, a U.S. research firm, and asset manager Harbor Capital Management, are more than double the S&P's gains for that timespan.
HAPI's success comes amid growing belief that employee satisfaction, which human resource leaders [have long connected](https://www.marshmma.com/us/insights/details/employee-satisfaction.html) to morale and retention, may also benefit a company's share price. Irrational Capital uses survey data that includes employee responses to questions about intrinsic rewards, including compensation, benefits, trust, transparency, and in general how their employers value them in its selections. Co-founders David van Adelsberg and Dan Ariely, a behavioral economist, developed the methodology to test the idea that companies with the most positive, inspirational corporate culture will see that reflected in their stock price.
## Nvidia Tops HAPI Holdings
HAPI, which carries a .35% expense ratio, provides exposure to large-cap companies with that profile in a range of sectors. To be sure, Nvidia is HAPI's largest holding at 6.65%, according to etf.com data. The artificial intelligence-focused chipmaker's share price has soared about 125% in 2024. Magnificent 7 tech giants Apple, Meta Platforms and Alphabet that have fueled equity markets' surge in recent years are also among its top 10 appropriations.
***Read More:*** [***Irrational Capital’s HAPI Is Outperforming the S&P 500***](https://www.etf.com/sections/features/irrational-capitals-hapi-outperforming-s-and-p-500)
But those firms have also appeared regularly in surveys of top places to work with Nvidia [ranking three ](https://www.greatplacetowork.com/best-workplaces/100-best/2024)in the Fortune 100 Best Companies to Work For 2024 list–in no small part because they have resources to invest in employee-focused initiatives.
Other companies that HAPI holds includes big pharma stalwarts Eli Lilly and Johnson & Johnson, and financial services behemoth JPMorgan Chase.
“We don’t use any financial information, so there are no P/E ratios, no earnings per share metrics—this is purely the perception of employees, and we’ve codified it into the human capital factor,” van Adelsberg told etf.com in an April interview about his firm's employee-centered approach to weighting companies.
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[ James Rubin Contributing Editor ](/authors/james-rubin)
James Rubin is a contributing editor for etf.com, where he produces the Morning Exchange and Weekly Exchange newsletters. A longtime financial writer,… [View Bio](/authors/james-rubin)
Related Topics [U.S.](http://www.etf.com/topics/us)
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[Pharmaceuticals](http://www.etf.com/topics/pharmaceuticals)
[Harbor](http://www.etf.com/topics/harbor)