Harbor Capital Advisors has launched the Harbor Corporate Culture ETF (ticker: HAPI). The firm writes that HAPI marks the expansion of Harbor’s commitment to give investors the ability to access the power of a company’s most important asset – its people.
The fully transparent ETF will seek to provide investment results that correspond, before fees and expenses, to the performance of the Canadian Imperial Bank of Commerce (CIBC) Human Capital Index (the “Index”). The Index was developed and is owned by CIBC (the “Index Provider”).
The CIBC Human Capital Index and HAPI are built around the Human Capital Factor, a distinctive investment factor developed by Irrational Capital, an investment research and development firm that applies workplace behavioural science and data science in an effort to capture the powerful connection between human capital and value creation.
The Human Capital Factor is based on proprietary research conducted by Irrational Capital. It enables a strong, systematic assessment of a company’s corporate culture and its link to potential future equity performance. The Human Capital Factor first became publicly investable through the Harbor Corporate Culture Leaders ETF (ticker: HAPY), and serves as the foundation for HAPI, allowing for a more diversified and sector constrained approach to this new field of human capital investing.
“We continue to see strong investor demand in the field of human capital investing and are thrilled to partner with world-renowned behavioral scientist Dan Ariely and his colleagues at Irrational Capital on our second Corporate Culture ETF,” says Kristof Gleich, President & CIO, Harbor Capital. “HAPI provides investors with more options to access the Human Capital Factor, which we believe is the most comprehensive measure of employee motivation, and a differentiated investment factor linked to future equity performance. We look forward to finding innovative ways to apply the Human Capital Factor to a myriad of investment strategies in the future.”
“We’re delighted to expand our partnership with the team at Harbor Capital to deliver further evidence that doing the right thing pays and is strongly linked to future investment performance,” says Dan Ariely, Irrational Capital’s Co-Founder, “Our work has clearly proven that corporate culture and employee motivation are deeply connected with financial performance. Harbor Capital is on the leading edge of developing products that provide access to this new factor.”
The Index is comprised of a modified market capitalisation-weighted portfolio of equity securities of approximately 150 US companies. These are the companies identified by Irrational Capital LLC (“Irrational Capital”) as possessing strong corporate culture (including factors such as motivation, compensation fairness, trust and transparency) based on its proprietary scoring methodology.