Episode 23 of Behind the Ticker features guest Steve Cook, Head of ETFs at Harbor Capital Advisors. Join us as we discuss Harbor's suite of ETF products and the commodity ETF Hedger (ticker: HGER).
About Steve Cook and Harbor Funds
In this episode, Steve provides background on his experience in the ETF industry and Harbor Capital's evolution into the ETF space. He discusses Harbor's manager vetting process and bringing unique active strategies to the ETF wrapper.Steve then dives into the motivation behind launching HGER, explaining how it differs from other commodity ETFs by providing dynamic exposure across 24 commodities based on an active rules-based index. He talks about the current commodity allocations and how the index rebalances based on economic conditions.Additional topics include:Why Harbor moved its ETFs to the NYSE floor and the benefits seen from human liquidity providersPositioning HGER in a portfolio to hedge inflation and add non-correlated assetsReaching key AUM milestones and getting advisor distributionHarbor's lineup of equity and international ETFs also worth a lookLearn more as Steve shares his insights on bringing differentiated active ETFs to market and finding product-market fit. to learn more about Steve and Harbor Capital visit https://www.harborcapital.com/
Deeper Dive: Insights from the Full Conversation
Beyond the headline strategy, the full conversation between Brad and Steve Cook covered several additional themes worth highlighting for advisors and investors.
On Process and Philosophy
So that's a really interesting portfolio should really strong returns over the last 12 months and we just pulled my part there. So we're really excited about, as a product. And then two other larger equity portfolios win, which is large kept growth ETF that we've launched with Johnson Associates and G-Div, which is a both dividend portfolio that we launched with our partners at Westfield. That was actually a mutual fund that we converted so it's a long track record there.
Today we have Steve Cook. He is the head of ETFs at Harbor Capital. We talk about the business. They got their start by sourcing investment managers. Then dove into the fund management business, managing mutual funds, CITs, and a handful of ETFs. Steve has a ton of experience. It was nice to talk to Steve. We talked about NYSE floor listing, and we also talked deeply about their product hedgeer, which is a all-weather commodity ETF, a little bit more active, and a little different take on commodity exposure.
Market Context and Positioning
I'm Brad Roth, chief investment officer of Thor Financial Technologies, and portfolio manager of THLV, the Thor Low Volatility ETF. Behind the Ticker, uncovers the inner workings of the ETF industry. We will interview portfolio managers and ETF service providers to dive deep into their work lives and their businesses. We will learn the inner workings of their strategies and what drives them as they continue to grow their company. Many of these individuals are entrepreneurs, and will have unique and compelling insights to share as much goes on behind the Ticker.
So, they registered the early ETFs as unit investment trusts, and they cast kind of all the responsibility for operating the trust and ETF onto the trustee. And so, Banking York was selected as a trustee, and I got to first hand look across the board. The investment management piece for an index perspective of the capital markets and trading piece, because there was no centralized data repository. And so, the folks trading these things on the floor would call you for information and updates on how what changes the ETF made made, and the basket knows what to think.
So it's a nice concentrated. These are large global businesses that when you look at it, really want to own. You want to have exposure to. As folks are seeking out returns and uncoorrelated terms, looking at international products that are, that are owned businesses that you want, not just for diversification, but because they're really well run. And and C-Worldwide looks at it as international compounders. So folks and, and management teams that kind of compound the success of their business over time by reinvesting the capital or the stewards of capital.
Notable Insights
"Um, and so one of the, the real major benefit to going to the floor is you're taking the computer out of it and you're inserting a live individual back into it."
"And now all of a sudden, you know, the pipeline, the opportunity pipeline kind of explodes because, you know, you've been telling the stories for 18 months, people see it working, but they're waiting for that period of time where they're able to actually go in and now you're starting to see that."
Key Takeaways
- In this episode, Steve provides background on his experience in the ETF industry and Harbor Capital's evolution into the ETF space.
- The conversation explores important themes in fixed income relevant to today's advisor landscape.
- The conversation explores important themes in portfolio construction relevant to today's advisor landscape.
What This Means for Advisors
For financial advisors evaluating options for client portfolios, this conversation with Steve Cook highlights important considerations around income investing. Understanding the strategy behind each fund—not just the ticker—helps advisors make more informed allocation decisions and better communicate the rationale to clients.
The themes of income investing and fixed income discussed in this episode are particularly relevant in the current market environment, where advisors are increasingly looking for differentiated solutions that go beyond traditional benchmarks.
Listen to the Full Episode
This article is based on an episode of Behind the Ticker, hosted by Brad Roth, Founder and CIO of THOR Financial Technologies. For the full conversation with Steve Cook, including additional nuances and details, listen on Spotify, Apple Podcasts, or watch on YouTube.