Harbor Capital Advisors launched two actively managed fixed income ETFs today, marking the issuer’s entrance into the ETF industry. Both ETFs are subadvised by BlueCove Limited, a scientific asset management firm founded in 2018 that specializes in quantitative fixed income investing. The funds are listed on NYSE Arca.
The Harbor Scientific Alpha High-Yield ETF (SIHY) comes with an expense ratio of 0.48%. The fund is designed to outperform the ICE BofA US High Yield Index by using a proprietary quantitative framework to drive investment selection of below-investment-grade bonds. The resulting portfolio will have a profile consistent with that of the broad benchmark.
The Harbor Scientific Alpha Income ETF (SIFI) is slightly more expensive, with an expense ratio of 0.50%. This fund will use the same proprietary quantitative process to drive asset allocation and security selection, with the goal of providing total return and income while limiting downside risk.
Harbor’s Fixed Income Roots
Though these ETFs are the first for Harbor, the issuer has five fixed income mutual fund strategies, two of which date back to 1987.
The management teams for the fixed income strategies are separate from the portfolio management team for the new ETFs.
As of June 30, 2021, the firm had approximately $63 billion in total assets under management.