SIHY Profile
The Harbor Scientific Alpha High-Yield ETF is an actively-managed fund designed to capitalize on the higher income potential offered by below investment-grade corporate bonds, commonly known as high yield or junk bonds. Under normal market conditions, the fund allocates at least 80% of its net assets, including any borrowings used for investment purposes, to these high-yield securities. This allocation may also include unrated bonds that are assessed to be of equivalent credit quality by the funds subadviser, BlueCove Limited.
The investment strategy of the fund involves not only direct investment in high-yield corporate bonds but also the use of derivative instruments to manage risk and enhance returns. These derivatives may include futures and swaps, which provide additional tools for managing exposure and liquidity. The funds focus is predominantly on U.S. dollar-denominated securities, but it may also include bonds issued by foreign entities, thereby broadening its investment universe.
BlueCove Limited, the subadviser, employs a rigorous evaluation process to select securities for the funds portfolio. This process involves in-depth credit analysis to assess the financial health and stability of issuers, as well as market conditions that could impact bond performance. The use of derivatives complements this analysis by providing mechanisms to hedge against potential risks and capitalize on market opportunities.
Investors in the Harbor Scientific Alpha High-Yield ETF can expect a portfolio that is heavily weighted towards high-yield bonds, with the potential for substantial returns due to the higher risk associated with these securities. The funds strategy is geared towards maximizing income while managing the inherent risks of investing in lower-rated bonds and utilizing derivatives for enhanced portfolio management.
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