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Harbor Unconstrained Bond Fund to liquidate

http://www.sec.gov/Archives/edgar/data/793769/000119312516594564/d359875d497.htm

497 1 d359875d497.htm HARBOR FUNDS

111 South Wacker Drive, 34th Floor

Chicago, IL 60606-4302

harborfunds.com

Supplement to Statement of Additional Information dated March 1, 2016

Harbor Unconstrained Bond Fund

Harbor Funds’ Board of Trustees has determined to liquidate and dissolve the Harbor Unconstrained Bond Fund. The liquidation of the Fund is expected to occur on July 29, 2016. The liquidation proceeds will be distributed to any remaining shareholders of the Fund on the liquidation date.

Shareholders may exchange shares of the Fund for another Harbor fund, or redeem shares out of the Fund, in accordance with Harbor’s exchange and redemption policies as set forth in the Fund’s prospectus, until the date of the Fund’s liquidation.

In order to ready the Fund for liquidation, the Fund’s portfolio of investments will be transitioned prior to the planned liquidation date to one that consists of all or substantially all cash, cash equivalents and debt securities with remaining maturities of less than one year. As a result, shareholders should no longer expect that the Fund will seek to achieve its investment objective of seeking total return.

Because the Fund will be liquidating, the Fund is now closed to new investors. The Fund will no longer accept additional investments from existing shareholders beginning on July 22, 2016.

May 18, 2016

Harbor Bond Fund

Effective June 1, 2016, Harbor Bond Fund shall have additional flexibility to invest in securities rated below investment grade. The percentage of the Fund’s total assets that may be invested in securities rated below investment grade is increasing from 15% of total assets to 20% of total assets. In addition, the minimum credit quality rating applicable to securities rated below investment grade is being removed.

Accordingly, effective June 1, 2016, the first paragraph on page 5 within the “Below Investment-Grade Fixed Income Securities” section under Investment Policies is hereby replaced in its entirety with the following:

Harbor Convertible Securities Fund and Harbor High-Yield Bond Fund invest primarily in below investment-grade securities. Harbor Global Growth Fund, Harbor Commodity Real Return Strategy Fund, Harbor Unconstrained Bond Fund, Harbor Bond Fund and Harbor Real Return Fund may invest up to 5%, 10%, 40%, 20% and 10%, respectively, of its assets in below investment-grade securities, commonly referred to as “high-yield” or “junk” bonds. For all securities other than mortgage-related securities, the investments of Harbor Commodity Real Return Strategy Fund and Harbor Real Return Fund in below investment-grade securities are limited to those rated B or higher by S&P, Moody’s or Fitch Ratings, or, if unrated, determined to be of comparable quality. For mortgage-related securities, these Funds may invest in securities of any credit quality, including those rated below B.

May 17, 2016

Investors Should Retain This Supplement For Future Reference

Comments

  • The reason for shutting down HAUBX looks like simply lack of interest. Same team managing it as PFIUX (which is a little cheaper than the Harbor clone). Somewhat similar lackluster performance over the long term, and just $19M AUM (vs. $4.8B for PIMCO).

    Or as M* write of the PIMCO version, "its record to date has been only middling." 784% turnover (for the Harbor version) to boot.
  • Harbor Bond Fund HABDX is similar, same as PIMCO Total Return, but more expensive.
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