International & Global Funds Annual Report - Harbor Funds

72 Pages·2015·0.87 MB·English

Annual Report
International & Global Funds
October 31, 2018
Institutional Retirement Administrative Investor
Class Class Class Class
HarborInternationalFund HAINX HNINX HRINX HIINX
HarborDiversifiedInternational
AllCapFund HAIDX HNIDX HRIDX HIIDX
HarborInternationalGrowthFund HAIGX HNGFX HRIGX HIIGX
HarborInternationalSmallCap
Fund HAISX HNISX HRISX HIISX
HarborGlobalLeadersFund HGGAX HNGIX HRGAX HGGIX
HarborEmergingMarketsEquity
Fund HAEMX HNEMX HREMX HIEEX
BeginningonJanuary1,2021,aspermittedbyregulationsadoptedbytheSecuritiesandExchangeCommission,
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unlessyouspecificallyrequestpapercopiesofthereports.Instead,thereportswillbemadeavailable
ontheFunds’website(harborfunds.com),andyouwillbenotifiedbymaileachtimeareportisposted
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Ifyoualreadyelectedtoreceiveshareholderreportselectronically,youwillnotbeaffectedbythischange
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Table of Contents
LetterfromtheChairman............................................... 1
International&GlobalFunds
HARBORINTERNATIONALFUND
Managers’Commentary................................................... 2
FundSummary........................................................... 4
PortfolioofInvestments................................................... 5
HARBORDIVERSIFIEDINTERNATIONALALLCAPFUND
Managers’Commentary................................................... 12
FundSummary........................................................... 14
PortfolioofInvestments................................................... 15
HARBORINTERNATIONALGROWTHFUND
Managers’Commentary................................................... 22
FundSummary........................................................... 24
PortfolioofInvestments................................................... 25
HARBORINTERNATIONALSMALLCAPFUND
Managers’Commentary................................................... 28
FundSummary........................................................... 31
PortfolioofInvestments................................................... 32
HARBORGLOBALLEADERSFUND
Manager’sCommentary................................................... 35
FundSummary........................................................... 38
PortfolioofInvestments................................................... 39
HARBOREMERGINGMARKETSEQUITYFUND
Managers’Commentary................................................... 41
FundSummary........................................................... 43
PortfolioofInvestments................................................... 44
FinancialStatements
STATEMENTSOFASSETSANDLIABILITIES................................... 47
STATEMENTSOFOPERATIONS............................................... 48
STATEMENTSOFCHANGESINNETASSETS................................... 49
FINANCIALHIGHLIGHTS .................................................... 55
NotestoFinancialStatements......................................... 68
ReportofIndependentRegisteredPublicAccountingFirm .......... 80
FeesandExpensesExample........................................... 81
AdditionalInformation
ADDITIONALTAXINFORMATION............................................. 84
PROXYVOTING............................................................. 84
HOUSEHOLDING ........................................................... 84
QUARTERLYPORTFOLIODISCLOSURES....................................... 84
ADVISORYAGREEMENTAPPROVALS......................................... 85
TRUSTEESANDOFFICERS................................................... 88
Harbor’sPrivacyStatement ............................................ 91
BenchmarkDescriptions............................................... 93
ThisdocumentmustbeprecededoraccompaniedbyaProspectus.
Letter from the Chairman
DearFellowShareholder:
InternationalequitiesintheaggregatepostednegativereturnsinthefiscalyearendedOctober31,
2018.TheMSCIAllCountryWorldEx.U.S.(ND)Index,ameasureoftheequitymarketsoutside
theU.S.,hadareturnof-8.24%.AllinternationalandglobalreturnsareinU.S.Dollars.
Internationalstockmarketsroseearlyinthefiscalyear,supportedbystrongglobaleconomicdata,
beforefallingquitesharplyinresponsetofearsofhigherinterestrates,risinginflation,andasignificant
drop in price of stocks in the Information Technology sector. As the fiscal year progressed, the
U.S.Dollarstrengthenedagainstothercurrencies,includingtheEuro,theJapaneseYenandthe
BritishPound,whichpressuredinternationalequitymarketperformance.Emergingmarketswere
particularlyhardhitbyconcernsofslowingregionalgrowth,theprospectsforanextendedtrade
CharlesF.McCain
warbetweentheU.S.andChina,andU.S.Dollarstrength.
Chairman
ThestoryofglobalequitiesforthefiscalyearwasmarkedbyastarkdivergencebetweenU.S.and
international equities. Buoyed by continued gains in the U.S., the MSCI World (ND) Index, a measure of the global equity
markets,postedagainof1.16%forthefiscalyear.Towardtheendofthefiscalyear,globalequitymarketsbenefitedfromthe
boostprovidedbyastrongU.S.economy.InOctober,however,heightenedvolatilitydrovesteepdeclinesinequitymarkets
aroundtheworld.
CommentsbytheportfoliomanagersofeachHarborinternationalandglobalequityfundcanbefoundinthepagespreceding
eachFund’sportfolioofinvestments.Asalways,werecommendthatshareholdersmaintainalong-termperspectiveinevaluating
alloftheirinvestments,includingthoseinHarborFunds.
RETURNSFORPERIODSENDEDOCTOBER31,2018
Annualized
International&Global 1Year 5Years 10Years 30Years
MSCIEAFE(ND)(foreignstocks)........................................................... -6.85% 2.02% 6.89% 4.59%
MSCIEAFESmallCap(ND)(foreignsmallcapstocks)........................................... -7.81 5.16 11.56 N/A
MSCIWorld(ND)(globalstocks) ........................................................... 1.16 6.81 10.02 6.83
MSCIAllCountryWorldEx.U.S.(ND)(foreignstocks)........................................... -8.24 1.63 6.92 N/A
MSCIEmergingMarkets(ND)(emergingmarketstocks)......................................... -12.52 0.78 7.84 N/A
DomesticEquities
Russell3000®(entireU.S.stockmarket)...................................................... 6.60% 10.81% 13.35% 10.28%
S&P500(largecapstocks)................................................................ 7.35 11.34 13.24 10.25
RussellMidcap®(midcapstocks).......................................................... 2.79 8.97 14.20 11.44
Russell2000®(smallcapstocks) ........................................................... 1.85 8.01 12.44 9.64
Russell3000®Growth(growthstocks)....................................................... 10.20 13.06 15.34 10.13
Russell3000®Value(valuestocks).......................................................... 2.78 8.50 11.28 10.05
FixedIncome
ICEBofAMLU.S.Non-DistressedHighYield(domestichigh-yieldbonds)............................ 0.76% 4.79% 9.32% N/A
BloombergBarclaysU.S.AggregateBond(domesticbonds) ..................................... -2.05 1.83 3.94 5.97%
BloombergBarclaysU.S.TIPS(domesticinflation-linkedbonds) .................................. -1.24 0.97 4.11 N/A
ICEBofAMLU.S.3-MonthTreasuryBill(proxyformoneymarketreturns)............................ 1.68 0.55 0.35 3.18
ASSESSINGYOURLONG-TERMINVESTMENTPLAN
Astheendofthecalendaryearapproaches,itmaybeagoodtimetoevaluateyourfinancialgoalsandyourinvestments.We
alwaysencourageshareholderstotakealong-termperspectivewithalloftheirinvestments.Whilepastperformanceisnever
a guarantee of future results, over the long term, the returns of equities and debt securities have historically helped many
investorsachievetheirfinancialobjectives.Weencourageallinvestorstomaintainadiversifiedportfolioofequities,debtand
cashinanallocationconsistentwiththeirlong-termfinancialgoalsandcomfortwithrisk.
HarborFundsoffersavarietyofequityandfixedincomefundstohelpyouachieveyourfinancialgoals.
ThankyouforinvestingwithHarborFunds.
December19,2018
CharlesF.McCain
Chairman
●●
1
Harbor International Fund
MANAGERS’COMMENTARY(Unaudited)
SUBADVISER Management’s Discussion of
MarathonAsset
Fund Performance
ManagementLLP
OrionHouse
5UpperSt.Martin’sLane MARKETREVIEW
London,WC2H9EA
InternationalequitymarketssignificantlyunderperformedU.S.stocksduringthefiscalyear
England
endedOctober31,2018.Developedmarketstocks,asrepresentedbytheMSCIEAFE(ND)
Index(the“Index”),fell6.85%(allinternationalandglobalreturnsareinU.S.Dollars),while
PORTFOLIOMANAGERS emergingmarketequitiesexperiencedanevenmorepronouncedselloff,withtheMSCIEmerging
Markets(ND)Indexfalling12.52%.Theseresultsstandinsharpcontrasttotherobustconditions
NeilM.Ostrer
inU.S.equitymarkets,asillustratedbythe7.35%gainfortheS&P500Indexoverthesame
Since2018
period.
The fiscal year got off to a positive start with both U.S. and international stocks rallying
CharlesCarter
broadlyinthelasttwomonthsof2017.However,ahostofworriesweighedoninternational
Since2018
stocksthroughoutmuchof2018,amongthemescalatingtradetensions,concernsaboutslowing
globalgrowth,theongoingwinddownofaccommodativemonetarypolicies,theimpactof
NickLonghurst
astrongU.S.Dollar,andBrexit.TheseconcernsculminatedinthemonthofOctoberwith
Since2018
asharpdownturnandspikeinvolatilityacrossglobalmarkets.
WilliamJ.Arah
Since2018 PERFORMANCE
OnAugust22,2018,MarathonAssetManagementLLP(“Marathon-London”)wasappointed
SimonSomerville assubadvisertotheFund,replacingNorthernCross,LLC.WhileMarathon-London’sinvestment
Since2018 approachdiffersfromtheprevioussubadviser,theFundcontinuestoprovidediversifiedcore
exposuretoforeignstocksacrossabroadrangeofcountriesandsectors.Marathon-London’s
SimonTodd,CFA “capitalcycle”investmentphilosophyiscenteredonthestudyofcapitalflowsandcompetitive
Since2018 dynamics within industries. It is grounded in the premise that high returns at the top of a
capitalcycleattractexcessivecapital(andincreasedcompetition),whichsowstheseedsof
MichaelNickson,CFA acyclicaldownturn.Conversely,lowreturnsatthebottomofacyclediscouragenewcapital
Since2018 (andcompetition),clearingthewayforthestrongest,mosteffectivelymanagedcompanies
tosurviveandultimatelyexcel.Marathon-London’sassessmentofhowmanagementresponds
totheforcesofthecapitalcyclethroughcapitalallocationdecisions,coupledwithhowthey
MichaelGodfrey,CFA
areincentivized,arebothcriticaltoinvestmentdecisions.
Since2018
HarborInternationalFundreturned-11.31%(InstitutionalClass),-11.24%(RetirementClass),
DavidCull,CFA -11.53%(AdministrativeClass),and-11.65%(InvestorClass)forthefiscalyear,significantly
Since2018 laggingtheIndex,whichreturned-6.85%.Formostofthefiscalyear,theFundmaintained
ameaningfuloff-benchmarkallocationtoColombianstocks,whichwasakeydetractorover
MarathonAsset theperiod.TheFundheldahandfulofU.S.stocks,whichalsodetractedslightlyfromreturns
relativetotheIndex.Thevastmajorityoftheseoff-benchmarkexposuresweresoldafterthe
ManagementLLP
subadviserchange.Fromasectorperspective,theFundbenefitedfromanunderweightand
(Marathon-London)has
strongsecurityselectioninFinancials.However,thatwasmorethanoffsetbypoorsecurity
subadvisedtheFund
selectioninConsumerStaples(Anheuser-BuschInBev,BritishAmericanTobacco),Health
since2018.
Care(Bayer)andIndustrials(Fanuc,AtlasCopco,SMC,andRolls-Royce).Mostofthekey
detractorswerelegacyholdingsthatweresoldoverthecourseofthelasttwomonthsofthe
INVESTMENT fiscalyear.
OBJECTIVE
SinceAugust22,2018,Marathon-LondonhasworkedtowardtransitioningtheFundbyselling
TheFundseeks legacyholdingsandpurchasingthestocksweintendtoholdoverthelongterm.Substantial
long-termtotalreturn, effortwasmadetolimitthemarketimpactassociatedwiththesalesandpurchasesofportfolio
securitiesthroughoutthistransition.Duringthetransition,Marathon-Londonalsomanaged
principallyfromgrowth
tokeepcashatmodestlevels,averagingaround3.9%fromthetransitiondatethroughOctober31,
ofcapital.
2018.
●●
2
Harbor International Fund
MANAGERS’ COMMENTARY—Continued
CHANGEINA$50,000INVESTMENT OUTLOOK&STRATEGY
Fortheperiod11/01/2008through10/31/2018
Attheendofthefiscalyear,thetransitionoftheFund’sholdings
$130,000
wasalmostcomplete.Accordingly,theperformanceoftheFund
110,000 goingforwardwillbedrivenbyMarathon-London’sinvestment
$97,365
90,000 92,806 decisions,whicharebasedonanalysesofindustrycapitalcycle
characteristics along with in-depth research regarding the
70,000 companymanagement’smotivation,incentivizationandskill
50,000 atrespondingtotheforcesofthecycle.
30,000 AsofOctober31,2018,theFundhadmeaningfuloverweights
Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 tuontdheerIwnediugshttrsiawlsearnedtoCtohmeFminunaniccaitaiolsnaSnedrvEinceesrgsyecsteocrtso.rNs,oatarebales
where Marathon-London sees unfavorable capital cycle
Institutional Class MSCI EAFE (ND)
conditions.Goingforward,theFundisexpectedtobebroadly
Thegraphcomparesa$50,000investmentintheInstitutionalClasssharesofthe diversifiedacross350to450stocks,withregionalallocations
FundwiththeperformanceoftheMSCIEAFE(ND)Index.TheFund’sperformance
approximately benchmark neutral, with a modest
assumesthereinvestmentofalldividendandcapitalgaindistributions.
out-of-benchmarkallocationtoemergingmarkets.
TOTALRETURNS
Fortheperiodsended10/31/2018
Annualized
1Year 5Years10Years
HarborInternationalFund
InstitutionalClass ...........................-11.31% -0.45% 6.38%
RetirementClass1 ...........................-11.24 -0.42 6.40
AdministrativeClass.........................-11.53 -0.70 6.11
InvestorClass..............................-11.65 -0.82 5.99
ComparativeIndex
MSCIEAFE(ND) ............................ -6.85% 2.02% 6.89%
AsstatedintheFund’sprospectusdatedMarch1,2018,theexpenseratioswere
0.72%(Net)and0.81%(Gross)(InstitutionalClass);0.64%(Net)and0.73%(Gross)
(RetirementClass);0.97%(Net)and1.06%(Gross)(AdministrativeClass);and1.09%
(Net)and1.18%(Gross)(InvestorClass).Thenetexpenseratiosreflectacontractual
managementfeewaivereffectivethrough02/28/2019.Theexpenseratiosinthe
prospectusmaydifferfromtheactualexpenseratiosfortheperioddisclosedwithin
thisreport.Theexpenseratiosshownintheprospectusarebasedonthepriorfiscal
year,adjustedtoreflectchanges,ifany,incontractualarrangementsthatoccurred
priortothedateoftheprospectus(orsupplementthereto,ifapplicable).
Performancedatashownrepresentspastperformanceandisnoguaranteeoffuture
results.Pastperformanceisnetofmanagementfeesandexpensesandreflects
reinvesteddividendsanddistributionsbutdoesnotreflectthedeductionoftaxes
thatashareholderwouldpayonFunddistributionsorupontheredemptionofFund
shares.Pastperformancereflectsthebeneficialeffectofanyexpensewaiversor
reimbursements,withoutwhichreturnswouldhavebeenlower.Investmentreturns
andprincipalvaluewillfluctuatesothatFundshares,whenredeemed,maybeworth
moreorlessthantheiroriginalcost.Returnsforperiodslessthanoneyeararenot
annualized.Currentperformancemaybehigherorlowerandisavailablethrough
themostrecentmonthendatharborfunds.comorbycalling800-422-1050.
1 RetirementClasssharescommencedoperationsonMarch1,2016.TheperformanceattributedtotheRetirementClasssharespriortothatdateisthatoftheInstitutional
Classshares.PerformancepriortoMarch1,2016hasnotbeenadjustedtoreflectthelowerexpensesofRetirementClassshares.Duringthisperiod,RetirementClass
shareswouldhavehadreturnssimilarto,butpotentiallyhigherthan,InstitutionalClasssharesduetothefactthatRetirementClasssharesrepresentinterestsinthe
sameportfolioasInstitutionalClasssharesbutaresubjecttolowerexpenses.
ThisreportcontainsthecurrentopinionsofMarathonAssetManagementLLPasofthedateofthisreportandshouldnotbeconsideredasinvestmentadviceorarecommendation
ofanyparticularsecurity,strategyorinvestmentproduct.Suchopinionsaresubjecttochangewithoutnoticeandsecuritiesdescribedhereinmaynolongerbeincluded
in,ormayatanytimeberemovedfrom,theFund’sportfolio.Thisreportisdistributedforinformationalpurposesonly.Informationcontainedhereinhasbeenobtained
fromsourcesbelievedreliable,butnotguaranteed.
Investingininternationalandemergingmarketsposesspecialrisks,includingpotentiallygreaterpricevolatilityduetosocial,politicalandeconomicfactors,aswellas
currencyexchangeratefluctuations.Theserisksaremoresevereforsecuritiesofissuersinemergingmarketregions.Forinformationonthedifferentshareclassesand
therisksassociatedwithaninvestmentintheFund,pleaserefertothecurrentprospectus.
●●
3
Harbor International Fund
FUNDSUMMARY—October31,2018(Unaudited)
TOPHOLDINGS(%ofnetassets)
➊ ➏
CementosArgosSA 1.4% BPplc 1.0%
➋ ➐
OlympusCorp. 1.3% ColoplastAS 1.0%
➌ ➑
IntertekGroupplc 1.2% CompassGroupplc 1.0%
➍ ➒
RocheHoldingAG 1.1% ReckittBenckiserGroupplc 1.0%
➎ ➓
AssaAbloyABClassB 1.0% SampoOYJ 0.9%
SECTORALLOCATION(%ofinvestments)
(Excludescashandshort-terminvestments)
Industrials 23.3% Materials 7.3%
Financials 15.7% Information Technology 6.5%
Consumer Discretionary 12.1% Energy 3.9%
Health Care 11.8% Real Estate 0.6%
Consumer Staples 10.7% Utilities 0.5%
Communication Services 7.6%
REGIONBREAKDOWN(%ofinvestments)
(Excludescashandshort-terminvestments)
Europe 63.0% Pacific Basin 34.7%
United Kingdom 25.8% Japan 26.3%
France 6.7% Australia 2.5%
Germany 6.2% South Korea 2.0%
Switzerland 5.7% China 1.5%
Denmark 4.8% Hong Kong 1.2%
Netherlands 3.9% Taiwan 0.7%
Sweden 2.9% Thailand 0.3%
Italy 2.1% Singapore 0.1%
Finland 1.3% New Zealand 0.1%
Spain 1.2% Latin America 1.8%
Norway 0.8% Colombia 1.8%
Ireland 0.6% Middle East/Central Asia 0.5%
Austria 0.5% India 0.5%
Belgium 0.5%
●●
4
Harbor International Fund
PORTFOLIOOFINVESTMENTS—October31,2018
Value,Cost,andPrincipalAmountsinThousands
COMMONSTOCKS—93.6% COMMONSTOCKS—Continued
Shares Value Shares Value
AEROSPACE&DEFENSE—2.2% BANKS—Continued
690,590 AirbusSE(France)............................ $ 76,320 4,143,136 UniCreditSpA(Italy) .......................... $ 52,971
8,500,685 BAESystemsplc(UnitedKingdom)............... 56,999 923,900 UnitedOverseasBankLtd.(Singapore)............ 16,335
65,524 MTUAeroEnginesAG(Germany)................ 13,913 894,717
6,752,880 Rolls-RoyceHoldingsplc(UnitedKingdom)*........ 72,419
111,175 SaabAB(Sweden) ........................... 4,359 BEVERAGES—3.9%
335,236 ThalesSA(France) ........................... 42,816 783,471 Anheuser-BuschInBevSA(Belgium)............. 57,947
266,826 234,500 AsahiGroupHoldingsLtd.(Japan) ............... 10,305
481,234 Britvicplc(UnitedKingdom).................... 4,858
AIRFREIGHT&LOGISTICS—0.3% 396,030 CarlsbergAS(Denmark)....................... 43,689
322,652 OesterreichischePostAG(Austria)............... 13,098 3,970,786 Coca-ColaAmatilLtd.(Australia)................. 27,945
682,300 YamatoHoldingsCo.Ltd.(Japan) ................ 18,653 3,391,302 DavideCampari-MilanoSpA(Italy)............... 26,100
31,751 2,669,632 Diageoplc(UnitedKingdom).................... 92,293
1,036,924 HeinekenNV(Netherlands)..................... 93,289
AIRLINES—0.3% 107,020 HiteJinroCo.Ltd.(SouthKorea)................. 1,483
1,887,053 EasyJetplc(UnitedKingdom)................... 28,909 3,355,700 KirinHoldingsCo.Ltd.(Japan)................... 80,075
255,000 JapanAirlinesCo.Ltd.(Japan).................. 9,050 349,000 SapporoHoldingsLtd.(Japan) .................. 6,474
490,800 SuntoryBeverage&FoodLtd.(Japan)............ 20,003
37,959
2,970,000 TsingtaoBreweryCo.Ltd.(China)................ 11,745
AUTOCOMPONENTS—0.6% 476,206
787,600 BridgestoneCorp.(Japan)...................... 30,369
187,930 CIEAutomotiveSA(Spain) ..................... 4,974 BIOTECHNOLOGY—0.2%
849,736 GestampAutomocionSAADR(Spain)*,1,2.......... 5,388 1,147,408 Abcamplc(UnitedKingdom).................... 17,589
548,886 GUDHoldingsLtd.(Australia) ................... 4,812 391,717 GrifolsSA(Spain) ............................ 11,160
182,700 KoitoManufacturingCo.Ltd.(Japan)............. 8,698 28,749
747,700 SumitomoElectricIndustriesLtd.(Japan).......... 10,197
143,700 ToyotaIndustriesCorp.(Japan).................. 7,059 BUILDINGPRODUCTS—2.0%
71,497 6,160,867 AssaAbloyABClassB(Sweden)................ 122,545
675 BelimoHoldingAG(Switzerland)................. 3,019
AUTOMOBILES—1.5% 256,037 GeberitAG(Switzerland)....................... 100,248
679,231 BayerischeMotorenWerkeAG(Germany)......... 58,489 351,868 GWAGroupLtd.(Australia)..................... 688
153,497 HyundaiMotorCo.(SouthKorea)................ 14,377 1,164,400 LIXILGroupCorp.(Japan)...................... 18,305
502,500 SubaruCorp.(Japan).......................... 13,555 244,805
1,760,000 ToyotaMotorCorp.(Japan)..................... 103,102
189,523 CAPITALMARKETS—2.0%
5,669,988 3iGroupplc(UnitedKingdom)................... 63,488
BANKS—7.3% 957,378 CloseBrothersGroupplc(UnitedKingdom)........ 17,981
3,420,239 AxisBankLtd.(India)*......................... 26,792 4,525,042 IGGroupHoldingsplc(UnitedKingdom)........... 34,934
1,631,538 BancoSantanderSA(Spain).................... 7,763 430,900 JapanExchangeGroupInc.(Japan).............. 7,718
3,110,300 BangkokBankPCL(Thailand)................... 19,440 3,896,059 JupiterFundManagementplc(UnitedKingdom) .... 16,769
6,539,171 BankofIrelandGroupplc(Ireland)*.............. 46,203 4,810,900 NomuraHoldingsInc.(Japan)................... 23,102
11,694,225 BankiaSA(Spain)............................ 36,732 218,550 RathboneBrothersplc(UnitedKingdom) .......... 6,430
26,055,189 Barclaysplc(UnitedKingdom) .................. 57,408 2,005,601 St.James’sPlaceplc(UnitedKingdom)........... 25,919
1,175,038 BNPParibasSA(France) ...................... 61,236 3,638,177 UBSGroupAG(Switzerland)*................... 50,851
743,700 ChibaBankLtd.(Japan)........................ 4,705 247,192
1,275,900 ConcordiaFinancialGroupLtd.(Japan) ........... 5,839
513,690 DanskeBankAS(Denmark) .................... 9,831 CHEMICALS—2.3%
1,500,481 DNBASA(Norway)........................... 27,108 775,824 AkzoNobelNV(Netherlands)................... 65,142
455,200 FukuokaFinancialGroupInc.(Japan)............. 11,185 909,446 BASFSE(Germany)........................... 69,790
294,545 HanaFinancialGroupInc.(SouthKorea) .......... 9,922 1,586,663 DuluxGroupLtd.(Australia)..................... 8,340
5,178,400 HSBCHoldingsplc(HongKong)................. 42,553 712,100 NissanChemicalIndustriesLtd.(Japan)........... 33,576
6,289,158 IntesaSanpaoloSpA(Italy)..................... 13,931 168,000 NittoDenkoCorp.(Japan)...................... 10,496
1,787,500 KasikornbankPCL(Thailand).................... 10,760 2,107,753 OricaLtd.(Australia).......................... 25,681
58,872,495 LloydsBankingGroupplc(UnitedKingdom)........ 42,962 148,400 Shin-EtsuChemicalCo.Ltd.(Japan).............. 12,400
2,017,700 MitsubishiUFJFinancialGroupInc.(Japan)........ 12,212 428,061 SymriseAG(Germany) ........................ 35,857
18,501,700 MizuhoFinancialGroupInc.(Japan).............. 31,774 3,670,900 TorayIndustriesInc.(Japan).................... 26,039
4,127,243 NordeaBankABP(Sweden).................... 35,869 287,321
10,215,200 ResonaHoldingsInc.(Japan)................... 53,732
1,230,015 ShinhanFinancialGroupCo.Ltd.(SouthKorea)..... 45,813 COMMERCIALSERVICES&SUPPLIES—2.9%
4,991,238 StandardCharteredplc(UnitedKingdom).......... 34,982 119,300 AEONDelightCo.Ltd.(Japan)................... 3,983
2,450,200 SumitomoMitsuiFinancialGroupInc.(Japan)...... 95,399 2,966,177 BramblesLtd.(Australia)....................... 22,344
517,900 SumitomoMitsuiTrustHoldingsInc.(Japan) ....... 20,578 18,177,103 CleanawayWasteManagementLtd.(Australia)..... 23,237
5,582,605 SvenskaHandelsbankenAB(Sweden)............ 60,682 1,579,360 EdenredSA(France).......................... 59,910
823,298 ElisSA(France).............................. 16,601
●●
5
Harbor International Fund
PORTFOLIO OF INVESTMENTS—Continued
Value,Cost,andPrincipalAmountsinThousands
COMMONSTOCKS—Continued COMMONSTOCKS—Continued
Shares Value Shares Value
COMMERCIALSERVICES&SUPPLIES—Continued ELECTRICALEQUIPMENT—Continued
16,889,518 G4Splc(UnitedKingdom)...................... $ 46,351 570,500 UshioInc.(Japan)............................ $ 6,883
7,279,388 HomeServeplc(UnitedKingdom)................ 88,366 1,576,875 VestasWindSystemsAS(Denmark).............. 98,886
444,758 ProsegurCiadeSeguridadSA(Spain)............ 2,470 206,537
96,606 S-1Corp.(SouthKorea)........................ 8,181
505,200 SecomCo.Ltd.(Japan)........................ 41,362 ELECTRONICEQUIPMENT,INSTRUMENTS&COMPONENTS—2.4%
258,832 SecuritasAB(Sweden)........................ 4,436 611,700 AzbilCorp.(Japan) ........................... 11,394
21,775,236 SercoGroupplc(UnitedKingdom)*............... 26,722 4,681,000 ChromaATEInc.(Taiwan)...................... 16,490
240,400 SohgoSecurityServicesCo.Ltd.(Japan).......... 10,708 5,765,000 DeltaElectronicsInc.(Taiwan).................. 24,266
354,671 64,000 HiroseElectricCo.Ltd.(Japan).................. 6,100
273,600 HitachiHigh-TechnologiesCorp.(Japan) .......... 10,268
CONSTRUCTION&ENGINEERING—0.9% 2,473,600 HitachiLtd.(Japan)........................... 75,618
733,445 BoskalisWestminsterNV(Netherlands)........... 21,089 18,300 KeyenceCorp.(Japan) ........................ 8,940
482,279 FerrovialSA(Spain)........................... 9,656 1,211,800 KyoceraCorp.(Japan)......................... 65,586
1,453,800 MaedaCorp.(Japan).......................... 16,427 542,200 OmronCorp.(Japan).......................... 21,951
3,560,800 ObayashiCorp.(Japan)........................ 31,435 265,800 ShimadzuCorp.(Japan)........................ 6,718
2,958,100 ShimizuCorp.(Japan)......................... 24,012 1,261,969 Spectrisplc(UnitedKingdom)................... 34,527
130,400 SHO-BONDHoldingsCo.Ltd.(Japan)............. 9,278 179,600 TDKCorp.(Japan)............................ 15,487
111,897 297,345
CONSTRUCTIONMATERIALS—1.9% ENERGYEQUIPMENT&SERVICES—0.9%
78,508,442 CementosArgosSA(Colombia).................. 171,185 2,664,817 JohnWoodGroupplc(UnitedKingdom)........... 24,288
348,926 CRHplc(Ireland)............................. 10,419 1,101,155 PetrofacLtd.(UnitedKingdom).................. 8,097
148,001 ImerysSA(France)........................... 9,123 13,393,677 SaipemSpA(Italy)*........................... 73,247
166,830 VicatSA(France)............................. 8,966 385,188 TechnipFMCplc(France)....................... 10,218
1,514,338 WienerbergerAG(Austria)..................... 34,831 115,850
234,524
ENTERTAINMENT—0.2%
CONSUMERFINANCE—0.5% 547,575 CTSEventimAG&Co.KGaA(Germany)........... 20,529
737,200 AEONFinancialServiceCo.Ltd.(Japan)........... 14,428 257,300 TohoCo.Ltd.(Japan).......................... 8,394
5,924,649 InternationalPersonalFinanceplc(UnitedKingdom). 13,502 28,923
7,662,014 Non-StandardFinanceplc(UnitedKingdom)2....... 6,480
3,038,961 ProvidentFinancialplc(UnitedKingdom)* ......... 19,810 FOOD&STAPLESRETAILING—1.7%
416,695 ShriramTransportFinanceCo.Ltd.(India).......... 6,510 1,092,400 DairyFarmInternationalHoldingsLtd.(HongKong).. 9,869
60,730 2,467,544 KoninklijkeAholdDelhaizeNV(Netherlands)....... 56,483
196,000 LawsonInc.(Japan) .......................... 12,442
CONTAINERS&PACKAGING—0.4% 289,600 MatsumotokiyoshiHoldingsCo.Ltd.(Japan)........ 10,470
5,824,107 DSSmithplc(UnitedKingdom).................. 29,223 6,547,968 MetcashLtd.(Australia)*....................... 12,798
944,300 ToyoSeikanGroupHoldingsLtd.(Japan) .......... 19,265 1,608,600 Seven&IHoldingsCo.Ltd.(Japan) .............. 69,652
48,488 211,400 SundrugCo.Ltd.(Japan)....................... 7,682
8,607,410 Tescoplc(UnitedKingdom)..................... 23,442
DISTRIBUTORS—0.2% 202,838
2,812,511 Inchcapeplc(UnitedKingdom).................. 19,425
FOODPRODUCTS—1.3%
DIVERSIFIEDFINANCIALSERVICES—0.0% 5,898 BarryCallebautAG(Switzerland)................ 11,528
10,510,000 FirstPacificCo.Ltd.(HongKong) ................ 4,703 7,505,000 ChinaMengniuDairyCo.Ltd.(China) ............. 22,206
4,585,464 Devroplc(UnitedKingdom)..................... 9,619
DIVERSIFIEDTELECOMMUNICATIONSERVICES—1.8%
129,600 MeijiHoldingsCo.Ltd.(Japan).................. 8,599
3,319,118 DeutscheTelekomAG(Germany)................ 54,439
1,608,100 NipponSuisanKaishaLtd.(Japan)............... 10,272
15,765,832 KoninklijkeKPNNV(Netherlands)................ 41,599
11,390,000 TingyiCaymanIslandsHoldingCorp.(China) ....... 16,876
1,357,204 KTCorp.ADR(SouthKorea)1.................... 18,784
686,500 ToyoSuisanKaishaLtd.(Japan)................. 23,598
2,292,400 NipponTelegraph&TelephoneCorp.(Japan)....... 94,535
573,771 ViscofanSA(Spain)........................... 34,321
3,130,274 SparkNewZealandLtd.(NewZealand)........... 8,084
28,316,000 WantWantChinaHoldingsLtd.(China)*........... 20,258
217,441
157,277
ELECTRICUTILITIES—0.2%
GASUTILITIES—0.1%
411,400 KansaiElectricPowerCo.(Japan) ............... 6,296
537,800 TokyoGasCo.Ltd.(Japan)...................... 13,226
1,750,100 TohokuElectricPowerCo.Inc.(Japan)............ 22,112
28,408 HEALTHCAREEQUIPMENT&SUPPLIES—5.9%
1,340,098 ColoplastAS(Denmark)........................ 125,049
ELECTRICALEQUIPMENT—1.7% 22,550,969 ConvaTecGroupplc(UnitedKingdom)2............ 46,613
1,471,696 LegrandSA(France).......................... 96,103 742,381 EssilorLuxotticaSA(France).................... 101,393
8,107,000 TECOElectricandMachineryCo.Ltd.(Taiwan)...... 4,665 2,293,538 GNStoreNordAS(Denmark)................... 97,289
325,200 HoyaCorp.(Japan)........................... 18,399
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6
Harbor International Fund
PORTFOLIO OF INVESTMENTS—Continued
Value,Cost,andPrincipalAmountsinThousands
COMMONSTOCKS—Continued COMMONSTOCKS—Continued
Shares Value Shares Value
HEALTHCAREEQUIPMENT&SUPPLIES—Continued INSURANCE—Continued
1,530,982 KoninklijkePhilipsNV(Netherlands).............. $ 57,099 2,373,916 SampoOYJ(Finland).......................... $ 109,169
4,775,998 OlympusCorp.(Japan) ........................ 159,193 SamsungFire&MarineInsuranceCo.Ltd.(South
813,058 Smith&Nephewplc(UnitedKingdom)............ 13,216 116,159 Korea)................................... 28,423
194,496 SonovaHoldingAG(Switzerland)................ 31,719 1,006,700 SompoHoldingsInc.(Japan).................... 41,522
2,302,044 WilliamDemantHoldingAS(Denmark)*........... 75,672 542,300 SonyFinancialHoldingsInc.(Japan) ............. 12,511
508,700 T&DHoldingsInc.(Japan)...................... 8,132
725,642
939,900 TokioMarineHoldingsInc.(Japan)............... 44,281
HEALTHCAREPROVIDERS&SERVICES—1.1% 579,685
1,174,700 AlfresaHoldingsCorp.(Japan)* ................. 31,331
1,323,807 FreseniusMedicalCareAG&Co.KGaA(Germany).. 103,941 INTERACTIVEMEDIA&SERVICES—1.6%
176,000 MediPALHoldingsCorp.(Japan)................. 3,767 5,351,561 AutoTraderGroupplc(UnitedKingdom)2.......... 27,964
200,289 BaiduInc.ADR(China)*,1....................... 38,067
139,039
2,017,232 Carsales.comLtd.(Australia).................... 17,484
HOTELS,RESTAURANTS&LEISURE—3.9% 3,156,368 DomainHoldingsAustraliaLtd.(Australia)*......... 5,553
545,000 AjisenChinaHoldingsLtd.(China)................ 182 17,690,847 Rightmoveplc(UnitedKingdom)................. 102,122
838,940 Carnivalplc(UnitedKingdom)................... 45,727 191,190
6,061,261 CompassGroupplc(UnitedKingdom)............. 119,218
122,000 GLLtd.(Singapore) ........................... 64 INTERNET&DIRECTMARKETINGRETAIL—0.5%
3,277,445 GVCHoldingsplc(UnitedKingdom)*.............. 39,258 32,687 GSHomeShoppingInc.(SouthKorea)............ 5,580
867,000 Hongkong&ShanghaiHotelsLtd.(HongKong) ..... 1,196 4,436,370 JustEatplc(UnitedKingdom)* .................. 34,415
14,776,715 MerlinEntertainmentsplc(UnitedKingdom)2....... 61,025 MoneySuperMarket.comGroupplc(United
797,978 PaddyPowerBetfairplc(UnitedKingdom)......... 68,431 2,432,576 Kingdom)................................. 9,118
1,688,952 Playtechplc(UnitedKingdom) .................. 10,328 593,000 PChomeOnlineInc.(Taiwan)*................... 2,712
5,495,898 SSPGroupplc(UnitedKingdom)................. 46,857 62,381 Takeaway.comNV(Netherlands)*,2............... 3,669
35,825,693 ThomasCookGroupplc(UnitedKingdom) ......... 20,606 23,877 ZooplusAG(Germany)*........................ 3,951
2,513,325 TUIAG(Germany)............................ 41,538 59,445
572,994 YumChinaHoldingsInc.(China)................. 20,674
475,104 ITSERVICES—1.2%
349,805 AltenSA(France) ............................ 33,711
HOUSEHOLDDURABLES—0.7% 27,047 AmadeusITGroupSA(Spain)................... 2,178
1,847,940 BarrattDevelopmentsplc(UnitedKingdom)........ 12,120 370,900 ITOCHUTechno-SolutionsCorp.(Japan)........... 7,034
1,634,500 CasioComputerCo.Ltd.(Japan)................. 24,670 129,700 NomuraResearchInstituteLtd.(Japan)........... 5,750
2,175,292 McCarthy&Stoneplc(UnitedKingdom)2.......... 3,756 4,066,100 NTTDataCorp.(Japan)........................ 52,202
120,500 RinnaiCorp.(Japan) .......................... 8,754 234,300 OBICCo.Ltd.(Japan).......................... 21,331
1,153,200 SekisuiChemicalCo.Ltd.(Japan)................ 18,135 178,400 OtsukaCorp.(Japan).......................... 5,917
321,800 SonyCorp.(Japan) ........................... 17,415 388,100 SCSKCorp.(Japan)........................... 16,446
1,811,974 WiproLtd.(India)............................. 8,131
84,850
152,700
HOUSEHOLDPRODUCTS—1.1%
811,300 LionCorp.(Japan)............................ 15,253 LEISUREPRODUCTS—0.9%
1,521,931 ReckittBenckiserGroupplc(UnitedKingdom)...... 123,070 654,518 AmerSportsOYJ(Finland)*..................... 24,330
1,619,800 BandaiNamcoHoldingsInc.(Japan)............. 57,624
138,323
2,193,000 GiantManufacturingCo.Ltd.(Taiwan) ............ 8,393
INDEPENDENTPOWER&RENEWABLEELECTRICITYPRODUCERS—0.0% 3,054,000 GoodbabyInternationalHoldingsLtd.(HongKong)... 948
2,796,100 LopezHoldingsCorp.(Philippines) ............... 221 907,500 SegaSammyHoldingsInc.(Japan)............... 11,652
60,800 ShimanoInc.(Japan).......................... 8,304
INDUSTRIALCONGLOMERATES—1.3% 111,251
4,749,000 CKHutchisonHoldingsLtd.(HongKong)........... 47,833
770,464 DCCplc(UnitedKingdom)...................... 66,037 LIFESCIENCESTOOLS&SERVICES—0.7%
599,900 JardineMathesonHoldingsLtd.(HongKong)....... 34,640 124,148 EurofinsScientificSE(France) .................. 62,564
249,009 LGCorp.(SouthKorea) ........................ 14,508 182,179 GerresheimerAG(Germany).................... 12,839
163,018 27,613 TecanGroupAG(Switzerland)................... 6,229
81,632
INSURANCE—4.7%
1,961,161 AdmiralGroupplc(UnitedKingdom).............. 50,414 MACHINERY—2.7%
1,529,838 AXASA(France)............................. 38,287 275,638 AndritzAG(Austria)........................... 14,281
3,753,600 Dai-ichiLifeHoldingsInc.(Japan)................ 70,437 15,678 BucherIndustriesAG(Switzerland) .............. 4,324
15,500 GreatEasternHoldingsLtd.(Singapore)........... 286 8,274,260 CNHIndustrialNV(Italy)....................... 86,014
129,873 HannoverRueckSE(Germany).................. 17,465 264,700 DaifukuCo.Ltd.(Japan)........................ 11,368
19,873 HelvetiaHoldingAG(Switzerland)................ 12,173 40,700 FanucCorp.(Japan) .......................... 7,081
4,933,200 JapanPostHoldingsCo.Ltd.(Japan)............. 58,500 272,349 GEAGroupAG(Germany)...................... 8,276
2,062,200 MS&ADInsuranceGroupHoldingsInc.(Japan)..... 61,943 114,500 GloryLtd.(Japan) ............................ 2,666
3,253,694 QBEInsuranceGroupLtd.(Australia)............. 26,142 77,300 HirataCorp.(Japan) .......................... 4,766
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7