The Harbor Human Capital Factor U.S. Large Cap ETF, trading under the ticker HAPI, is an exchange-traded fund designed to invest in companies identified by Irrational Capital LLC as having strong corporate cultures and high employee happiness scores. This strategy is based on the premise that companies treating their workers well tend to exhibit better financial outcomes. Since its launch in late 2022, HAPI has achieved a strong performance, climbing nearly 25% in 2023, surpassing the S&P 500 index which added less than 20% during the same period. The fund has an expense ratio of 0.35%.
HAPI tracks the Human Capital Factor Large Cap Index, which is composed of approximately 150 U.S. companies. Irrational Capital, a key partner, utilizes proprietary behavioral science and data science to survey over 15 million employees across about 4,500 companies, gathering insights on aspects like employee pride, valuation of ideas, and views on management. This data is then combined with publicly available information to generate a "human capital score" for each company, which helps in constructing the ETF's portfolio. The fund is generally sector-neutral to its selection universe and typically holds around 150 securities.
The ETF has grown to nearly $500 million in assets under management. However, a significant portion of this AUM, specifically $362 million, came from an early institutional investment by the State of Wisconsin Investment Board (SWIB). This large allocation means the fund's AUM is not entirely organic retail adoption, and a potential withdrawal by SWIB could impact the fund significantly. As of Q1 2026, HAPI's top holdings included tech giants like Amazon.com (5.1%), Apple (5.0%), Alphabet (Class A) (4.9%), Meta Platforms (4.9%), and Microsoft (4.7%), along with other major companies such as NVIDIA, Netflix, JPMorgan Chase, Cisco Systems, and Eli Lilly, with the top 10 holdings accounting for about 41% of the fund.
