Harbor Scientific Alpha Income ETF

Harbor Scientific Alpha Income ETF (SIFI) is an actively managed bond fund that may invest most of its assets in high-yield ("junk") corporate bonds and uses derivatives tied to credit and interest rates. There is no index: Harbor hires Ares Systematic Credit to run it using computer-driven models. Its trailing 12-month yield was 6.57% as of October 27, 2026, but its 0.50% expense ratio is about five times the 0.10% average of similar funds.

• Over the year to Oct 27, 2026, SIFI returned +1.1%, 4th of 8 among similar funds.
• Its 5-year annualized return was +2.5%.
• Its worst full calendar year was 2022 (-10.6%); its best was 2025 (+8.8%).
• The deepest fall in its price history was 13.9% (Dec 27, 2021 to Sep 27, 2022), recovered by Jul 11, 2024.

As of Jul 31, 2026, the fund held 181 securities; the ten largest made up 9.52% of assets.

The bonds mature in 5.3 years on average (weighted by size), with an average coupon of 5.39%.

• Over the three months to Jul 31, 2026, investors added a net $1.1M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +0.44%, +0.24%, -0.33%.

SIFI does not track an index. Harbor hires an outside manager, Ares Systematic Credit Limited, which tests ideas against historical data and weights each in its computer models by how well it predicted returns. Some signals set how much to hold in corporate credit versus interest-rate markets, based on measures such as expected growth and default rates. Others rate companies on strength, outlook and credit spreads (the extra yield a borrower pays over Treasuries). The managers keep final say.

An optimizer sizes positions, weighing expected return against risk and trading costs and aiming to limit price swings and steep drops. Most assets may go to high-yield ("junk") bonds from riskier borrowers, classified by averaging Moody's, S&P and Fitch ratings. There is no maturity target. As of July 31, 2026, its 181 holdings were led by Novelis and Home Depot bonds at about 1.1% each; the top 10 made up 9.5%. Average maturity was 5.3 years.

It also uses derivatives, contracts tied to other assets. Credit default swaps, which pay out if a borrower defaults, can add or cut credit risk without buying bonds; Treasury futures can change how much rates move the fund. On July 31, 2026, it held two credit default swaps and 2-, 5- and 10-year Treasury note futures. Unexpected moves can cause outsized losses.

• SIFI charges 0.5% a year, versus an average of 0.1% for the similar funds below (8th of 8, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $51 in the first year and $628 over 10 years (assuming a 5% annual return).

Its stated objective is income and total return, and it pays monthly from a portfolio that can be mostly high-yield corporate bonds.

SIFI's main appeal is income: it paid $2.79 a share over the 12 months to October 27, 2026, a 6.57% yield, in monthly distributions. Launched on September 13, 2021, it has no record in the 2008 crisis or 2020 crash. Its deepest drop, 13.9% from December 2021 to September 2022, came during the 2022 bear market, and recovery took about 21 months, until July 2024. Its worst calendar year was 2022, a 10.85% loss per the prospectus. Anyone who had to sell shares then would have locked in losses.

Cost is a drawback: the 0.50% expense ratio comes to $51 in year one and $628 over 10 years in the SEC's standard $10,000 example. At $33.5 million in net assets as of July 31, 2026, the fund is also small. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by bond funds with the closest average maturity and issuer mix (N-PORT).