If You Invested in Harbor Emerging Markets Equity ETF (EPEM)

Harbor Emerging Markets Equity ETF (EPEM) is an exchange-traded fund launched by Harbor Capital Advisors, Inc. and managed by EARNEST Partners as subadvisor. According to Harbor Capital, the ETF is designed to pursue opportunities in emerging markets equity securities, with an emphasis on companies that exhibit durable financial and operational characteristics.

The ETF is part of Harbor Capital’s suite of actively managed ETFs that are subadvised by boutique investment managers. EARNEST Partners applies its established investment process to the Harbor Emerging Markets Equity ETF, beginning with a screen of the relevant universe of securities. Their proprietary approach is described as aiming to avoid companies driven by exaggerated headlines and to focus instead on businesses where fundamental performance is the key driver of long-term value.

Investment approach and focus

EARNEST Partners’ approach for EPEM emphasizes companies with strong balance sheets, consistent free cash flow, and disciplined capital allocation. Harbor Capital highlights these traits as often underappreciated when risk appetite is high but potentially important when capital becomes more selective. The strategy seeks businesses that may be undervalued by headline-driven markets yet demonstrate operational resilience, leadership adaptability, and sector positioning that can matter when market cycles shift.

The ETF invests in foreign securities, with a particular focus on emerging markets. Harbor Capital notes that these markets can present higher risks than funds investing only in the United States, including currency risk and the risks associated with depositary receipts. The fund’s objective, as stated in the disclosure, is not guaranteed, and equity values can decline in response to adverse issuer, political, regulatory, market, and economic conditions.

Role within Harbor Capital’s lineup

Harbor Capital describes itself as an asset manager that curates active ETFs, mutual funds, and collective investment trusts from boutique managers. Within this context, the Harbor Emerging Markets Equity ETF provides exposure to emerging markets equities managed by EARNEST Partners, an independent, employee-owned investment firm headquartered in Atlanta, Georgia. EARNEST Partners has experience managing equity and fixed income strategies and utilizes a team-based investment process built on ongoing interaction among investment professionals.

By pairing Harbor Capital’s ETF platform with EARNEST Partners’ research and security selection process, EPEM is positioned as an option for investors and advisors seeking actively managed exposure to emerging markets equities. The fund’s disclosures emphasize that investing involves risk, including the possible loss of principal, and that the ETF has limited operating history.

Risk considerations

Harbor Capital’s disclosures for the Harbor Emerging Markets Equity ETF highlight several categories of risk. Stock markets are described as volatile, and equity values can decline significantly due to a range of factors. Investments in foreign securities, particularly in emerging markets, are associated with higher risks than investments limited to U.S. securities. These risks include currency risk, where fluctuations in foreign currencies against the U.S. dollar may negatively impact the fund’s value.

The ETF may also invest through depositary receipts, which Harbor Capital notes can carry risks such as political instability, currency fluctuations, higher costs, and weaker investor protections. The disclosures further state that diversification does not assure a profit or protect against loss in a declining market. As with other ETFs, shares of EPEM may trade at a premium or discount to their net asset value.

Manager and structure

EARNEST Partners serves as subadvisor to the Harbor Emerging Markets Equity ETF. Harbor Capital portrays EARNEST Partners as using a disciplined and replicable investment approach that begins with screening the investable universe and then focusing on companies that exhibit durable financial traits. The team-based structure is intended to draw on the collective judgment of the firm’s investment professionals.

Foreside Fund Services, LLC is identified as the distributor of the Harbor ETFs, which includes EPEM. Harbor Capital’s materials encourage investors to review the fund’s prospectus or summary prospectus to understand its investment objectives, risks, charges, and expenses before investing. The disclosures underscore that there is no guarantee the fund’s investment objective will be achieved and that the ETF’s limited operating history provides a relatively short track record for evaluation.

Key characteristics highlighted by Harbor Capital

• Focus on emerging markets equity securities.
• Active management by EARNEST Partners as subadvisor.
• Emphasis on companies with strong balance sheets, consistent free cash flow, and disciplined capital allocation.
• Screening process designed to avoid companies driven by exaggerated headlines and to emphasize fundamental performance.
• Exposure to foreign securities and emerging markets, with associated currency and political risks.
• Potential use of depositary receipts, with related costs and investor protection considerations.

All information about the Harbor Emerging Markets Equity ETF (EPEM) in this overview is based on statements from Harbor Capital Advisors and EARNEST Partners contained in public communications describing the launch and positioning of the fund.