Harbor Capital Advisors is expanding its suite of thematic exchange-traded funds with a new product seeking to capture a link between happy employees and positive stock performance of smaller companies.
Chicago-based Harbor Capital will debut the Harbor Corporate Culture Small Cap ETF on Thursday, according to a company statement. The fund will track the CIBC Human Capital Small Cap index, which is made up of about 200 small cap US companies rated on factors such as employee motivation, commitments to diversity goals and compensation fairness. The fund will trade under the ticker HAPS and charge a management fee of 0.6%.
“Companies that treat their employees well do better in the ultimate measure of performance for a public company — that being the value of their stock,” said David van Adelsberg, co-founder of Irrational Capital, which is providing the underlying methodology for the index. “If people are your most important asset, we need to be able to measure it.”
The debut comes as US ESG funds continue to overlook social and governance factors when it comes to stock selection, while prioritizing environmental metrics, according to a recent Bloomberg Intelligence analysis. Investor interest in US thematic funds has also waned, with the group seeing nine straight months of outflows.
Read more: US ESG Funds Value ‘E’ Over All Else, Overlooking ‘S’ & ‘G’ Risk
The actively managed fund joins the over $200 million Harbor Corporate Culture ETF (HAPI) and the roughly $10 million Harbor Corporate Culture Leaders ETF (HAPY) in Harbor Capital’s lineup of human capital focused funds. The new small-cap addition was a natural evolution of the theme, said Kristof Gleich, the firm’s president and chief investment officer, as smaller companies tend to employ fewer workers, limiting data noise.
Harbor Capital had $37 billion of assets under management as of Dec. 31, according to its website, and boasts a lineup of 11 ETFs totaling more than $800 million in assets, according to data compiled by Bloomberg.
–With assistance from Angel Adegbesan.
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