Harbor Capital Advisors has launched a new actively managed ETF aimed at tapping into what it sees as an improving outlook for U.S. small-cap growth stocks.
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The timing is opportune with interest in small-caps on the high at present. Last week, the Russell 2000 Index hit record highs after the longest streak of consecutive outperformance compared to the S&P 500 since 2008.
The Harbor Active Small Cap Growth ETF (NYSE:SGRW), launched on Jan 15, seeks long-term capital appreciation by investing in high-quality small-cap companies with strong growth potential.
Positioning For A Potential Market Rotation
The firm said the launch comes as small-cap equities may be entering the early stages of a more favorable multi-year cycle. Harbor pointed out that small-cap stocks have historically benefited during periods of economic expansion, innovation-led growth and valuation recoveries after extended underperformance versus large-cap peers.
SGRW is designed to capture these trends through active, fundamentals-driven stock selection rather than passive index exposure.
According to Harbor, the strategy targets small-cap growth companies that are often under-researched and mispriced by the broader market. The ETF focuses on businesses with durable competitive advantages, strong balance sheets and the potential for above-average earnings and revenue growth over time.
The fund employs a disciplined bottom-up research approach to identify companies with compelling growth trajectories and experienced management teams, while filtering out short-term market noise. Harbor said the portfolio is diversified across industries and stages of development, with the goal of navigating different market and economic environments.
A Diversification Tool Beyond Large Caps
SGRW is positioned as either a satellite allocation or a complement to core equity holdings, particularly for investors heavily tilted toward large-cap or passive strategies. Harbor said the ETF could offer diversification benefits within a broader actively constructed portfolio.
The ETF is subadvised by Granahan Investment Management, a firm specializing in small-cap growth investing for more than 30 years. Granahan's approach centers on rigorous fundamental research and early identification of innovative growth companies that may be overlooked by Wall Street.
Harbor's leadership noted that valuation gaps and evolving innovation trends are increasingly favoring smaller, faster-growing companies after years of large-cap dominance. As of Dec 31, 2025, Harbor Capital Advisors managed $67.2 billion in assets and continues to expand its active ETF lineup.
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