Harbor Health Care ETF

Harbor Health Care ETF (MEDI) is an actively managed fund: rather than tracking an index, Westfield Capital Management, the firm Harbor hired to run it, picks roughly 30 to 50 health care stocks. It is highly concentrated, with Eli Lilly at 20.8% and Ascendis Pharma at 13.6% of assets as of July 31, 2026. Its 0.8% annual expense ratio is far above the 0.08% charged by the Health Care Select Sector SPDR Fund (XLV).

• Over the year to Oct 27, 2026, MEDI returned +12.6%, 8th of 9 among similar funds.
• Its worst full calendar year was 2024 (+0.6%); its best was 2025 (+27.4%).
• The deepest fall in its price history was 19.3% (Sep 19, 2024 to Apr 8, 2025), recovered by Sep 5, 2025.

As of Jul 31, 2026, the fund held 44 securities; the ten largest made up 59.7% of assets.

By sector

• Over the three months to Jul 31, 2026, investors added a net $10.6M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +3.79%, +9.34%, -4.46%.

MEDI does not track an index. Harbor, the fund's adviser, hands the stock picking to Westfield Capital Management. In normal markets, at least 80% of net assets go into health care companies. These include drugmakers, biotech and life sciences firms, makers of equipment and supplies, service providers and technology suppliers. Companies can be any size, including newer ones with little or no revenue.

Westfield uses a bottom-up process, which means it studies individual companies rather than starting from economic forecasts. It screens mostly US-listed firms against strict fundamental criteria. Then it weighs valuation, competitive advantage, market opportunity, finances, capital structure and management's record, sometimes by interviewing executives. The result is roughly 30 to 50 stocks. As of July 31, 2026, the fund held 44, and the top 10 made up 59.7% of assets. The prospectus sets no fixed weighting rule or rebalancing schedule. The fund is non-diversified, so it can hold large positions in a few companies.

Westfield may sell a stock when it reaches or falls below a price target, when its original reason for owning it breaks down, or when a better idea appears. Portfolio turnover was 167%: over a year, the fund traded more than one and a half times the value of its portfolio. That can raise trading costs and taxable gains. Foreign stocks, often held as depositary receipts (US-traded certificates for foreign shares), typically stay under 35% of net assets. About 23% of the fund was outside the US as of July 31, 2026.

• MEDI charges 0.8% a year, versus an average of 0.37% for the similar funds below (9th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $82 in the first year and $990 over 10 years (assuming a 5% annual return).

It is a high-cost, non-diversified fund built on a manager's picks in one sector, so it fits best as a small addition next to broader holdings.

MEDI could add an active manager's concentrated view of health care to a broader portfolio. It launched on November 17, 2022, after the 2008, 2020 and 2022 market drops, so it has no record through a major bear market. Its deepest decline was 19.3%, from September 19, 2024 to April 8, 2025. It regained that level by September 5, 2025. Its weakest calendar year, 2024, returned 0.54%. Anyone forced to sell during a slide like that would lock in losses.

It pays little income: the yield was 0.47% as of October 27, 2026, paid twice a year. It is expensive for its category. Under the SEC's standard example on $10,000, costs total $82 after one year and $990 after 10 years. Past results don't predict future returns, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.