Navigating Volatility: A Strategic Approach to International Equity
Executive Summary: Q3 2025 Performance Overview
The Harbor International Equity ETF, known by its ticker EPIN, employs a focused, bottom-up investment strategy targeting international markets. During the third quarter of 2025, EPIN recorded a net asset value (NAV) return of 5.18%. This performance was slightly below its benchmark, the Msci Acwi ex-U.S.® Index, which posted a 6.89% return over the same period. Despite this, the ETF's performance was significantly bolstered by strong stock selection, particularly within the Communication Services, Information Technology, and Financials sectors. The prevailing market volatility has presented valuable opportunities to acquire shares in robust companies that are currently undervalued, as short-term market uncertainties have overshadowed their inherent long-term earning capabilities.
Market Dynamics: Opportunities Amidst Uncertainty
Recent shifts in market conditions have opened up strategic entry points for investors. Many high-quality businesses are trading at prices below their true worth, primarily due to immediate market jitters rather than fundamental weaknesses. This scenario is particularly advantageous for investors who adhere to a rigorous, fundamental-driven analysis, enabling them to identify and capitalize on such discrepancies. The current environment, characterized by ongoing macroeconomic fluctuations, emphasizes the importance of a disciplined investment approach.
Strategic Investment Philosophy: Anchoring to Fundamentals
The core investment philosophy remains centered on identifying and investing in companies with strong underlying fundamentals. This involves a meticulous, bottom-up selection process that evaluates businesses based on their intrinsic value and long-term growth potential. The belief is that in times of heightened market volatility, a steadfast focus on these fundamentals provides a solid anchor, allowing investors to navigate uncertainties and achieve sustainable returns. This approach aims to leverage short-term market dislocations for long-term compounding benefits.