Advisory Agreement Approvals—Continued
the three-year period ended December 31, 2023. The Morningstar data presented showed that the Fund’s one-, three- and five-year rolling returns ranked in the first, third and first quartile, respectively, for the periods ended December 31, 2023. The Trustees also considered that the Fund had outperformed its primary benchmark, the Russell 1000® Growth Index, for the one-year period ended December 31, 2023 and underperformed the benchmark for the three- and five-year periods ended December 31, 2023.
The Trustees considered the expertise of Jennison Associates LLC (“Jennison”) in managing assets generally and specifically with respect to the Fund’s strategy, noting that Jennison managed approximately $71 billion in assets in this strategy, out of a firm-wide total of approximately $194.2 billion in assets under management. The Trustees also noted the experience of the Fund’s portfolio managers in this strategy.
The Trustees observed that the Broadridge comparison of contractual management fees for the Fund’s expense group, assuming an asset level of $22.6 billion, showed that the Fund’s contractual management fee was above the group median for the Institutional Class. The Broadridge data also showed that the actual total expense ratio for the Fund’s Institutional Class was above its group median and below its universe median. The Trustees also considered that Harbor Capital had agreed to continue the Fund’s existing contractual fee waiver/expense reimbursement arrangement until at least February 28, 2025. The Trustees noted that Harbor Capital’s profitability in operating the Fund was not excessive.
Harbor Convertible Securities Fund. The Trustees considered Harbor Convertible Securities Fund (inception date May 1, 2011), noting that, according to the Broadridge report, the Fund’s Institutional Class had outperformed its Broadridge group and universe medians for the one- and three-year periods ended December 31, 2023, and underperformed its Broadridge group and universe medians for the five-year period ended December 31, 2023. The Morningstar data presented showed that the Fund’s one-, three- and five-year rolling returns ranked in the first, second and third quartiles, respectively, for the periods ended December 31, 2023. The Trustees also considered that the Fund had underperformed its benchmark, the ICE Bank of America (“ICE BofA”) U.S. Convertible Bond Index, for the one-, three-, and five-year periods ended December 31, 2023.
The Trustees noted that BlueCove Limited (“BlueCove”) was appointed as the Fund’s subadviser for an initial two-year period effective March 1, 2023 and therefore performance prior to that date was not attributable to BlueCove.
The Trustees considered the expertise of BlueCove in managing assets generally and in fixed income securities specifically, noting that BlueCove managed approximately $25.6 million in assets in the Fund’s strategy, out of a firm-wide total of $2 billion in assets under management. The Trustees also noted the experience of the Fund’s portfolio managers in this strategy.
The Trustees observed that the Broadridge comparison of contractual management fees for the Fund’s expense group, assuming an asset level of $50 million, showed the Fund’s management fee was below the group median for the Institutional Class. The Broadridge data also showed that the actual total expense ratio of the Fund’s Institutional Class was below the group median and equal to the universe median. The Trustees also considered that Harbor Capital had agreed to continue the Fund’s existing contractual fee waiver/expense reimbursement arrangement until at least February 28, 2025. The Trustees noted that Harbor Capital’s profitability in operating the Fund was negative.
Harbor Core Bond Fund. The Trustees considered Harbor Core Bond Fund (inception date June 1, 2018), noting that, according to the Broadridge report, the Fund’s Institutional Class had outperformed its Broadridge group and universe medians for the one- and five-year periods ended December 31, 2023, equalled its Broadridge group median for the three-year period ended December 31, 2023 and outperformed its Broadridge universe median for the three-year period ended December 31, 2023. The Morningstar data presented showed that the Fund’s one-, three- and five-year period rolling returns ranked in the second, third, and second quartile, respectively, for the periods ended December 31, 2023. The Trustees also considered that the Fund had outperformed its benchmark, the Bloomberg U.S. Aggregate Bond Index, for the one- and five-year periods ended December 31, 2023 and underperformed the benchmark for the three-year period ended December 31, 2023.
The Trustees considered the expertise of Income Research & Management (“IR+M”) in managing assets generally and in the core bond strategy specifically, noting that IR+M managed approximately $17.5 billion in assets in this strategy, out of a firm-wide total of approximately $97 billion in assets under management as of December 31, 2023. The Trustees also noted the experience of the Fund’s portfolio managers in this strategy.
The Trustees observed that the Broadridge comparison of contractual management fees for the Fund’s expense group, assuming an asset level of $125 million, showed the Fund’s management fee was below the group median for the Institutional Class. The Broadridge data also showed that the actual total expense ratio of the Fund’s Institutional Class was below the group and universe medians. The Trustees also considered that Harbor Capital had agreed to continue the Fund’s existing contractual fee waiver/expense reimbursement arrangement until at least February 29, 2025. The Trustees noted that Harbor Capital’s profitability in operating the Fund was negative.
