Mutual Fund Summary Prospectus (497k)
01 Marzo 2013 - 12:00PM
Edgar (US Regulatory)
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Harbor High-Yield Bond Fund
Summary Prospectus
– March 1, 2013
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Institutional Class
HYFAX
Administrative Class
HYFRX
Investor Class
HYFIX
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Before you invest, you may want to review the Fund’s prospectus, which contains more information about the Fund and its risks. You can find the Fund’s
prospectus and other information about the Fund online at www.harborfunds.com/prospectus. You can also get this information at no cost by calling 800-422-1050 or by sending an e-mail request to funddocuments@harborfunds.com. If you purchase shares
of the Fund through a financial intermediary, the prospectus and other information will also be available from your financial intermediary. The current prospectus and statement of additional information, dated March 1, 2013, are incorporated by
referenced into this summary prospectus and may be obtained, free of charge, at the website, phone number or e-mail address noted above.
Investment Objective
The Fund seeks total return.
Fees and Expenses of the Fund
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder Fees
(fees paid directly from your investment)
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Institutional
Class
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Administrative
Class
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Investor
Class
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Redemption Fee
(applicable to shares held less than 90 days)
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1.00%
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1.00%
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1.00%
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Annual Fund Operating Expenses
(expenses that you pay each year as a percentage of the value of your
investment)
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Institutional
Class
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Administrative
Class
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Investor
Class
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Management Fees
1
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0.60%
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0.60%
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0.60%
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Distribution and/or Service (12b-1) Fees
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None
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0.25%
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0.25%
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Other Expenses
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0.08%
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0.08%
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0.20%
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Total Annual Fund Operating Expenses
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0.68%
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0.93%
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1.05%
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Fee Waiver
1
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0.04%
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0.04%
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0.04%
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Total Annual Fund Operating Expenses After Fee Waiver
1
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0.64%
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0.89%
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1.01%
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1
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The Adviser has contractually agreed to reduce the management fee to 0.56% through February 28, 2014. Only the Board of Trustees may modify or
terminate this agreement.
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Expense Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time
periods indicated. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, under these assumptions, your costs would be:
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One
Year
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Three
Years
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Five
Years
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Ten
Years
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Institutional
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$
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65
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$
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214
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$
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375
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$
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843
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Administrative
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$
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91
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$
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292
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$
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511
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$
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1,139
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Investor
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$
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103
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$
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330
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$
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575
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$
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1,279
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Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover may indicate higher transaction costs and may
result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the Example, affect the Fund’s performance. The Fund’s portfolio turnover rate in the most
recent fiscal year was 32%.
Principal Investment Strategy
Principal Style Characteristics:
High-yield bonds
The Fund invests primarily in below
investment-grade bonds of corporate issuers. These bonds may pay interest on a semi-annual basis (i.e., cash pay bonds) or have a deferred interest feature (i.e., zero coupon bonds). The Fund also may invest in private placements. Only U.S. dollar
denominated securities are considered for investment in the Fund.
The Subadviser selects securities using its internally developed proprietary
tools. The Subadviser seeks to select securities issued by companies that generally exhibit, or are believed to have the prospect for, positive credit momentum with the potential for credit rating upgrade. The Subadviser seeks to maximize
portfolio return and minimize default risk by adhering to the following elements of its philosophy:
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Ÿ
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Bottom-up, fundamental analysis
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Ÿ
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Direct communication with management
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Ÿ
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Monitoring high-yield issuers on a systematic basis
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Ÿ
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Credit committee disciplined approach
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Ÿ
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Comprehensive reporting and risk control systems
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The Subadviser conducts an in-depth analysis using proprietary research tools in addition to communicating with management of the issuers to select securities for investment in the Fund and to monitor the
selected securities on a systematic basis. All securities in the portfolio are reviewed at least four times a year. As part of the selection and monitoring process, the Subadviser actively seeks to avoid holding securities of issuers that it deems
to have a high risk of default.
Under normal market conditions, the Fund invests at least 80% of its net assets, plus borrowings for
investment purposes, in a diversified portfolio of below investment-grade, high-risk, corporate bonds that are rated below Baa3 by Moody’s or below BBB- by S&P or Fitch, commonly referred to as “high-yield” or “junk”
bonds.
The Fund may invest up to 20% of its net assets in bank loans and up to 10% of its total assets in equity securities, including common
stock. Additionally, the Fund may invest a portion of its assets in credit default swaps and bank loans to corporate issuers.
1
Summary Prospectus
HARBOR HIGH-YIELD BOND FUND
Duration/Maturity.
Although duration may be one of the characteristics
considered in security selection, the Fund does not focus on bonds with any particular duration or maturity and does not seek to maintain the maturity of the Fund’s portfolio in any particular range. The weighted average maturity of the
Fund’s portfolio was 6.82 years as of December 31, 2012.
Credit Quality.
The Fund invests primarily in below
investment-grade debt securities, commonly referred to as “high-yield” or “junk” bonds, but may invest up to 20% of its net assets in investment-grade securities, including U.S. Treasury and U.S. government agency securities. As
such, the Fund’s average weighted portfolio quality varies from time to time, depending on the level of assets allocated to such securities. The Subadviser does not seek to actively invest in defaulted securities.
Principal Risks
There is no
guarantee that the investment objective of the Fund will be achieved. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fixed income
securities fluctuate in price in response to various factors, including changes in interest rates, changes in market conditions and issuer-specific events, and the value of your investment in the Fund may go down. This means that you could lose
money on your investment in the Fund or the Fund may not perform as well as other possible investments. Principal risks include:
Interest
rate risk:
As interest rates rise, the values of fixed income securities held by the Fund are likely to decrease and reduce the value of the Fund’s portfolio. Securities with longer durations tend to be more sensitive to changes in interest
rates and are usually more volatile than securities with shorter durations. For example, a 5 year average duration generally means the fixed income security will decrease in value by 5% if interest rates rise by 1%. Interest rates in the U.S. are
at, or near, historic lows, which may increase the Fund’s exposure to risks associated with rising rates.
Credit risk:
The issuer
of a security owned by the Fund could default on its obligation to pay principal or interest or its credit rating could be downgraded. Likewise, a counterparty to a derivative or other contractual instrument owned by the Fund could default on its
obligation. Credit risk is higher for the Fund because it invests primarily in below investment-grade securities.
Market and Issuer
risk:
Securities markets are volatile and can decline significantly in response to adverse market, economic, political or regulatory developments, which may increase the risk that issuers will not generate sufficient cash flow to service their
debt obligations.
High-yield risk:
There is a greater risk that the Fund will lose money because it invests primarily in high-yield
bonds. These securities are considered speculative because they have a higher risk of issuer default, are subject to greater price volatility and may be illiquid.
Prepayment risk:
When interest rates are declining, the issuer of a pass-through security, such as a mortgage-backed or an asset-backed security, may exercise its option to prepay principal earlier
than scheduled, forcing the Fund to reinvest in lower yielding securities.
Selection risk:
The Subadviser’s judgment about the
attractiveness, value and potential appreciation of a particular security may be incorrect.
Liquidity risk:
The market for high-yield
bonds is less liquid than the market for investment-grade bonds. The Fund may at times have greater difficulty buying or selling specific high-yield bonds at prices the Subadviser believes are reasonable, which would be adverse to the Fund.
Performance
The
following bar chart and table show two aspects of the Fund: volatility and performance. The bar chart shows the volatility — or variability — of the Fund’s annual total returns over time, and shows that Fund performance can change
from year to year. The table shows the Fund’s average annual total returns for certain time periods compared to the returns of a broad-based securities index. The bar chart and table provide some indication of the risks and potential
rewards of investing in the Fund. The Fund’s past performance (before and after taxes) is not necessarily an indication of how the Fund will perform in the future. To obtain updated performance information please visit the Fund’s
website at www.harborfunds.com or call 800-422-1050.
Calendar Year Total Returns for Institutional Class Shares
The Fund’s best and worst calendar quarters during this time period were:
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Total Return
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Quarter/Year
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Best Quarter
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9.60%
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3rd/2009
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Worst Quarter
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-10.09%
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4th/2008
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2
Summary Prospectus
HARBOR HIGH-YIELD BOND FUND
Average Annual Total Returns — As of December 31, 2012
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One
Year
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Five
Years
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Ten
Years
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Life of
Fund
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Institutional Class (inception date 12-01-2002)
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Before Taxes
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11.50%
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8.22%
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8.43%
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8.37%
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After Taxes on Distributions
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9.21%
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5.73%
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5.88%
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N/A
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After Taxes on Distributions and Sale of Fund Shares
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7.47%
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5.57%
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5.75%
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N/A
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Administrative Class (inception date 12-01-2002)
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Before Taxes
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11.21%
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7.95%
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8.17%
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8.12%
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Investor Class (inception date 12-01-2002)
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Before Taxes
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11.08%
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7.82%
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8.01%
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7.96%
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Comparative Index
(reflects no deduction for fees, expenses or taxes)
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BofA Merrill Lynch US High-Yield
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15.59%
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10.01%
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10.39%
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10.46%
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After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not
reflect the impact of state and local taxes. Actual after-tax returns depend on a shareholder’s tax situation and may differ from those shown. The after-tax returns shown are not relevant to tax exempt shareholders or shareholders who hold
their Fund shares through tax-deferred arrangements such as 401(k) plans or individual retirement accounts. After-tax returns are shown for Institutional Class shares only. After-tax returns for the Administrative and Investor Class shares will
vary.
Portfolio Management
Investment Adviser
Harbor Capital Advisors, Inc.
Subadviser
Shenkman Capital
Management, Inc. has subadvised the Fund since its inception in 2002.
Portfolio Managers
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Mark Shenkman
Shenkman
Capital Management, Inc.
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Mr. Shenkman is the President, Chief Investment Officer and a Director of Shenkman Capital and founded the firm in 1985. He has co-managed the Fund since its
inception in 2002.
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Mark Flanagan, CFA, CPA
Shenkman Capital Management, Inc.
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Mr. Flanagan is an Executive Vice President and Portfolio Manager at Shenkman Capital and has co-managed the Fund since its inception in
2002.
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Justin W. Slatky
Shenkman Capital Management, Inc.
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Mr. Slatky is a Senior Vice President and Senior Portfolio Manager at Shenkman Capital, has co-managed the Fund since 2012 and has been involved in portfolio management
for the Fund since 2011.
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Steven N. Schweitzer
Shenkman Capital Management, Inc.
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Mr. Schweitzer is a Senior Vice President and Portfolio Manager at Shenkman Capital, has co-managed the Fund since 2012 and has been involved in portfolio management for
the Fund since 2004.
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Eric Dobbin
Shenkman
Capital Management, Inc.
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Mr. Dobbin is a Senior Vice President and Portfolio Manager at Shenkman Capital, has co-managed the Fund since 2012 and has been involved in portfolio management for the
Fund since 2006.
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Buying and Selling Fund Shares
Shareholders may purchase or sell (redeem) Fund shares on any business day (normally any day the New York Stock Exchange is open). You may conduct transactions by mail, by telephone or through our
website.
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By Mail
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Harbor Funds
P.O. Box 804660
Chicago, IL 60680-4108
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By Telephone
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800-422-1050
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By Visiting Our Website
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www.harborfunds.com
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Investors
who wish to purchase, exchange or redeem shares held through a financial intermediary should contact the financial intermediary directly.
The
minimum initial investment amounts are shown below. The minimums may be reduced or waived in some cases. There are no minimums for subsequent investments.
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Type of Account
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Institutional
Class
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Administrative
Class*
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Investor
Class
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Regular
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$
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1,000
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$
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50,000
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$
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2,500
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Individual Retirement Account (IRA)
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$
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1,000
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N/A
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$
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1,000
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Custodial (UGMA/
UTMA)
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$
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1,000
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N/A
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$
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1,000
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*
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Limited only to eligible retirement plans and financial intermediaries. There is no minimum investment for qualified retirement plans and Section 457 plans.
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3
Summary Prospectus
HARBOR HIGH-YIELD BOND FUND
Tax Information
Distributions you receive from the fund are subject to federal income tax and may also be subject to state and local taxes. These distributions will
generally be taxed as ordinary income or capital gains, unless you are investing through a tax-deferred retirement account, such as a 401(k) plan or individual retirement account. Investments in tax-deferred accounts may be subject to tax when they
are withdrawn.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary, the Fund and/or its related companies may pay the intermediary for the
sale of Fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your sales representative to recommend the Fund over another investment. Ask your sales
representative or visit your financial intermediary’s website for more information.
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