Summary

• The first quarter of 2026 marked a sharp change in the market backdrop, as geopolitical escalation in the Middle East and the resulting energy shock disrupted the more constructive macro environment that had supported risk assets coming into the year.
• During Q1, the Harbor AlphaEdge Large Cap Value ETF returned 0.68%, underperforming both the Harbor AlphaEdge Large Cap Value Index, which returned 0.72%, and its benchmark, the Russell 1000 Value Index, which returned 2.10%.
• Harbor's business cycle regime indicator shifted to a late-cycle slowdown during the first quarter of 2026.

“Relative to the end of last year, our assessment of the macro backdrop has become more cautious, as higher energy prices, tighter liquidity conditions, and rising inflation pressures have created a more challenging environment for risk assets.” - Harbor Capital Advisors, Inc.