New ETF From Harbor Capital Targets Emerging Markets

The ETF seeks to offer capital growth through exposure to emerging markets. This actively managed fund has an expense ratio of 78 basis points. 

Sitting within EFFE’s portfolio is a selection of mid- and large-cap companies based in emerging markets. These companies are then screened to determine their individual resource efficiency. 

Osmosis Investment Management, who works as the fund’s subadvisor, uses this strategy. The firm scrutinizes these companies for a wide range of resource efficient factors. This includes carbon emissions, waste production, and water use, among others. 

After each company is examined, Osmosis will give each firm its own Resource Efficiency Score. This score plays a key factor in portfolio weighting, as EFFE seeks to maximize exposure to those who have stronger resource efficiency. 

Additionally, EFFE’s portfolio team aims to still provide similar sector, country, and factor weighting to the fund’s benchmark index, the MSCI Emerging Markets Index. Given their minimal resource usage, companies in the financials sector are exempt from getting Resource Efficiency Scores. However, they may be added to EFFE’s portfolio to help balance the factor weight. 

EFFE’s portfolio will typically contain somewhere between 70 to 90 companies. The fund won’t invest in certain companies, such as tobacco companies or those that breach the United Nations Global Compact’s social and governance safeguards.  

The launch of EFFE marks the latest expansion in Harbor Capital’s suite of international-focused ETFs. Last week, the company debuted the Harbor Osmosis International Resource Efficient ETF EFFI.

See More: Harbor Lists New International Resource Efficient ETF

Within its ETF library, Harbor Capital offers a variety of different strategies for its investors. One of the largest Harbor funds, the Harbor Long-Term Growers ETF (WINN ), has over $600 million in assets under management. 

For more information, please visit VettaFi.com | ETF Trends.