(PUB) Investing 2015

August 2015

Morningstar FundInvestor

5

Data through July 31, 2015 Harbor Mid Cap Value Investor

Ticker

Status Yield Total Assets

Mstar Category Mid-Cap Value

HIMVX Open

0.7% $595 mil

Morningstar Analyst Rating 08-03-15

Investment Style Equity Stock %

Historical Profile Return Risk Rating Above Avg Above Avg Above Avg

97% 98% 96% 97% 100% 100% 98% 97% 98%

´

Manager Change Partial Manager Change

14.0 18.0 23.6

Morningstar Pillars Process Performance

Growth of $10,000

Positive Neutral Positive Positive Positive

Investment Values of Fund Investment Values of S&P 500

¶

10.0

People Parent Price

6.0

Performance Quartile (within Category) History

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 07-15

Morningstar Analyst Rating Morningstar evaluates mutual funds based on five key pillars, which its analysts believe lead to funds that are more likely to outperform over the long term on a risk-adjusted basis. Analyst Rating Spectrum Œ „ ´ˇ ¨

11.21 15.37 4.49 -8.34 0.36 15.01 0.04 0.96 1.39 -0.15 70

11.92 9.89 4.98 -2.76 0.94 8.95

13.31 15.49 -4.73 0.73 14.76

11.80

7.11

9.80

11.69 20.23 5.17 -4.52 0.94 19.29

11.11 -4.13 -6.24 -2.75 0.80 -4.93

12.95 18.67

18.42 43.56 11.17 10.10

20.68 13.76 0.07 -0.99 0.78 12.98

20.91 1.11 -2.24 0.84 0.00 1.11

NAV

-37.30 -6.89

39.46 13.00

Total Return %

-12.38 -0.30

-0.30 1.14 2.39

2.67 0.16 2.10

+/-S&P 500 +/-Russ MV

-5.47 0.89

5.25 1.60

1.28

Income Return % Capital Return %

-39.69 -7.78

37.86

16.57

42.28

47

52

90

57

26

69

48

22

7

13

53

Total Rtn % Rank Cat

Pillar Spectrum Positive

0.11 0.29 1.38 0.88

0.09 0.37 1.32 1.06

0.12 0.47 1.33 1.17

0.28 0.00 1.32 2.10

0.11 0.00 1.35 1.68

0.09 0.00 1.32 0.93

0.09 0.00 1.32 0.83

0.23 0.00 1.32 1.43

0.17 0.00 1.30 1.21

0.14 0.13 1.26 1.01

0.00 0.00 . . . 163

Income $

§ Negative

¶ Neutral

Capital Gains $ Expense Ratio % Income Ratio % Turnover Rate % Net Assets $mil

Performance 07-31-15 1st Qtr 2nd Qtr

3rd Qtr

4th Qtr

Total

152

20

18

21

34

46

28

32

37

18 29

13

2011 2012 2013 2014 2015

7.36 -1.27 -21.87 15.78 -4.13 12.96 -5.42 6.91 3.90 18.67 15.06 4.36 6.82 11.93 43.56 4.51 4.36 -2.74 7.24 13.76 3.19 -2.25 . . .

1

2

6

5

2

3

5

4

4

112

Portfolio Analysis 06-30-15 Share change since 03-15 Total Stocks:190 Sector

Rating and Risk Time Load-Adj

PE Tot Ret% % Assets

Morningstar

Morningstar Risk vs Cat

Morningstar Risk-Adj Rating

Period Return % Rtn vs Cat

Kohl’s Corp

Cnsmr Cyc 14.3 1.93 1.54 Technology 14.9 -19.48 1.45

1 Yr 3 Yr 5 Yr

8.43

Trailing

Total

+/-

+/- Russ %Rank Growth of

Xerox Corporation Public Service Enterpris Avery Dennison Corp Edison International Hartford Financial Servi FirstEnergy Corp Western Digital Corp Cigna Corp Gap Inc

Return% S&P 500 -0.14 -1.55 3.41 -3.14 8.43 -2.78 22.45 4.87 17.09 0.85 7.92 0.20

MV

Cat

$10,000

22.45 17.09

High High Avg

+Avg +Avg +Avg

Utilities

11.4 2.51 1.44

3 Mo 6 Mo 1 Yr

0.83 1.69 1.79 3.59 1.07 -0.45

39 9,986 59 10,341 26 10,843 2 18,360 7 22,009

Hlth care 17.9 40.03 1.41

10 Yr Incept

7.92 9.92

Industrl Utilities

22.8 18.68 1.26 12.7 -7.08 1.26

3 Yr Avg 5 Yr Avg 10 Yr Avg 15 Yr Avg

Finan Svs 12.9 14.92 1.21 Cnsmr Cyc 12.7 -11.75 1.16 Technology 13.2 -21.36 1.14 Cnsmr Cyc 16.4 6.06 1.12 Technology 10.6 -37.89 1.10 Utilities 32.9 -11.05 1.15

Other Measures

Standard Index

Best Fit Index

S&P 500

Mstar Mid Value

37 21,430 . . . . . Tax Analysis Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

Alpha

3.0

1.9

Beta

1.08

0.98

Macy’s Inc

R-Squared

81

92

Amkor Technology Inc CBL & Associates Propert

3 Yr (estimated) 5 Yr (estimated) 10 Yr (estimated)

22.12 16.80

2 4

0.27 0.24 0.45

14 17 12

Standard Deviation

10.28 22.45

Real Est

16.9 -13.13 1.09

Whirlpool Corp Entergy Corp Tesoro Corp Ameren Corp

Technology 20.9 -7.41 1.07

Mean

Utilities Energy Utilities

15.3 -16.92 1.03 13.4 32.06 1.02 16.8 -9.17 1.01

7.43

16

Sharpe Ratio

2.03

Potential Capital Gain Exposure: 11% of assets

Morningstar’s Take by Michael Rawson 08-03-15 Harbor Mid Cap Value s time-tested investment process based on academic research overcomes its substantial volatility to earn it a Morningstar Analyst Rating of Bronze. LSV, a 21-year-old partnership with deep academic roots, has subadvised this fund since 2004. Josef Lakonishok, co-portfolio manager and an LSV founder, helped popularize behavioral finance, first in the academic world and then in practice. Lakonishok s studies confirmed that certain stock characteristics, such as valuation, small size, and momentum, were associated with higher returns. The fund s process puts Lakonishok s theories into practice. It ranks mid- and small-cap U.S. stocks based on valuation and momentum and targets the stocks in the top 15% on those metrics. LSV s models weight value more heavily than momentum, which results in a deeper value tilt than the typical mid-value fund. The approach is no longer cutting-edge, but it is disciplined and offers systematic exposure to value stocks. LSV s ability to refine the process makes it less rigid than typical

Quest Diagnostics Inc Piedmont Office Realty T Flextronics Internationa

Hlth care 21.7 11.69 1.01

Real Est

82.0 -1.11 0.99

strategic-beta funds. The fund has delivered decent results over the past decade, but only for investors who hung on through a gut-wrenching first five years. The cheap stocks the fund buys became even cheaper prior to the financial crisis, leading to a disastrous stretch starting in 2007. To the firm s credit, they stuck to their time-tested philosophy and have posted better returns for investors in the past five years. The fund s 9.6% return since LSV took over in 2004 lands in the top third of the mid-value Morningstar Category, although it trailed the Russell Mid-Cap Value Index. The returns are less impressive on a risk-adjusted basis but still land in the top half of the category. The smaller-cap and deep-value strategy courts substantial volatility as the stocks in the portfolio are often less well-diversified and more economically sensitive than large-blend stocks. In LSV s view, they also offer better returns. Investors who can tolerate the elevated risk should be rewarded.

Technology 12.0 -1.52 0.97

Current Investment Style

Sector Weightings

% of Stocks

Rel S&P 500 High

3 Year Low

Market Cap % Giant 0.6 Large 18.6 Mid 48.8 Small 25.4 Micro 6.7 Avg $mil: 6,255

Value Blnd Growth

Large Mid Small

Cyclical 49.19 BasicMat 5.92 CnsmrCyc12.99 FinanSvs 19.89 Real Est 10.39 Sensitive 30.65 CommSrvs 0.00 Energy 5.53 Industrl 12.70 Technlgy 12.42 Defensive20.15 CnsmrDef 5.16 Hlthcare 5.93 Utilities 9.06

. .

h r t y u j i o p a k s d f

6 3

. 13 9 . 22 18 . 11 7

. .

0 0

Value Measures Price/Earnings Price/Book Price/Sales Price/Cash Flow Dividend Yield % Long-Term Erngs Book Value Sales Cash Flow Historical Erngs Growth Measures

Rel Category

. 10 5 . 13 9 . 16 12

13.40 1.50 0.72 7.16 2.90 9.01 5.31 3.92 2.39 11.61

0.95 0.93 0.78 1.11 1.38 0.91 1.21 1.17 0.44 1.92

.

. 10 4

9 5

.

% Rel Category

. 10 5

Composition - Net

Cash 1.6 Stocks 98.0 Bonds 0.0 Other 0.5 Foreign 2.0

Address:

Harbor Funds Chicago, IL 60606 800-422-1050

Minimum Purchase: Min Auto Inv Plan:

$2500

Add: $0 IRA: $1000

$0

Add: .

Profitability

% Rel Category

Sales Fees:

No-load, 0.75% 3Yr:$403 Annually

Return on Equity Return on Assets Net Margin

16.55 5.09 10.44

1.32 1.12 1.10

Web Address: Inception: Advisor: Subadvisor: NTF Plans:

www.harborfunds.com

Management Fee:

(% of Stock)

11-01-02

Actual Fees:

Mgt:0.75% Dist:0.25%

Harbor Capital Advisors Inc LSV Asset Management

Expense Projections: Income Distribution:

5Yr:$697 10Yr:$1534

N/A

Mutual Funds ß ®

© 2015Morningstar, Inc.All rights reserved. The information herein isnot representedorwarranted tobe accurate, correct, completeor timely.Pastperformance isnoguaranteeof future results.Accessupdated reports at To order reprints, call 312-696-6100. mfb.morningstar.com.

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