Harbor Capital Advisors has launched a new fully transparent active equity ETF targeting opportunities in the global healthcare sector.
The Harbor Health Care ETF (MEDI US) has been listed on NYSE Arca with an expense ratio of 0.80%.
MEDI is sub-advised by Westfield Capital Management, a Boston-based investment adviser specializing in equities investing. Westfield currently manages more than $17 billion in assets.
Day-to-day management of the fund is led by Will Muggia, President, CEO, and CIO; and Matt Renna, Partner at Westfield Capital Management. Collectively, the duo brings nearly five decades of healthcare investing experience.
The ETF invests primarily in common and preferred stock of US companies although up to a third of the portfolio’s assets may be allocated to firms domiciled and listed outside of the US. Issuers of all market capitalizations are eligible for selection including larger, established companies as well as newer firms with little or no current revenues.
The fund seeks opportunities across the healthcare sector including manufacturers of healthcare equipment and supplies, healthcare services providers, pharmaceutical companies, biotechnology and life sciences companies, and suppliers of technologies for use by healthcare companies.
Westfield uses a bottom-up, fundamentals-driven process to identify potential portfolio constituents, followed by a qualitative review to determine final security selection. The firm considers a number of factors in the course of its fundamental research including valuations, competitive advantages, market opportunities, financial metrics, capital structure, and management’s track record of execution.
As of 23 November, the ETF contained 35 holdings with the top ten positions accounting for over two-thirds (68.4%) of the total exposure: UnitedHealth (14.5%), Eli Lilly (11.3%), Ascendis Pharma (8.5%), Thermo Fisher Scientific (6.2%), ICON (5.9%), Alkermes (5.3%), AbbVie (4.7%), Dexcom (4.2%), Lantheus (4.0%), and Bio-Rad Laboratories (3.8%).
Kristof Gleich, President and CIO of Harbor Capital Advisors, said: “We think the healthcare sector is ripe for exceptional managers to add attractive alpha as the sector expects to benefit from several structural tailwinds such as globally aging populations and advanced science and technology driving drug innovation and treatment. Westfield has proven to be an exceptional stock picker over the past 20 years, particularly in the healthcare sector, and we’re excited to bring that capability directly to the market with this latest thematic offering.”
Matt Renna, Partner and Portfolio Manager at Westfield Capital Management, added: “We are excited to build upon the long-standing partnership with Harbor Capital, by offering investors a pure-play vehicle into healthcare growth equities across the entire market cap spectrum. Market and sector volatility over the last year has presented compelling investment opportunities in some of the highest-quality businesses in US healthcare, and we are seeing exceptional value in many companies whose products, technologies, and services offer solutions to all stakeholders within the healthcare ecosystem. We believe that the convergence of innovation and value-based care within the sector will drive above-market shareholder returns over the next decade.”