Summary

• In the first quarter of 2026, the Harbor Mid Cap Value ETF returned 3.14% (NAV), underperforming its benchmark, the Russell Midcap® Value Index, which returned 3.68%.
• Sector positioning was the primary driver of relative underperformance, with an overweight to Financials and Consumer Discretionary and an underweight to Energy and Utilities all acting as headwinds.
• The portfolio maintained limited exposure to Oil & Gas companies, which gained nearly 37% during the quarter, as returns were largely driven by commodity price movements rather than fundamental improvements.
• Nextpower shares gained nearly 40% during the quarter following strong fiscal third quarter results that exceeded expectations and reflected robust demand and continued backlog growth.
• Harbor Mid Cap Value ETF sold Webster Financial during the quarter due to risk-management.

Beyond geopolitical developments, the quarter reflected a continuation of the more measured market environment that began in late 2025, as investors recalibrated valuations and placed greater emphasis on earnings durability, cash flow generation, and balance sheet strength. -