nvcsrs

/s/ David G. Van Hooser

Chairman, President, Trustee

June 23, 2006

David G. Van Hooser

and Chief Executive Officer

/s/ Mark W. Karchner

Treasurer and Chief

June 23, 2006

Mark W. Karchner

Financial Officer

N-CSRS 1 k05492snvcsrs.htm SEMI ANNUAL REPORT nvcsrs

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-4676

Harbor Fund

(Exact name of registrant as specified in charter)

One SeaGate

Toledo, Ohio 43604-1572

(Address of principal executive offices) (Zip code)


David G. Van Hooser HARBOR FUND One SeaGate Toledo, Ohio 43604-1572		With a copy to: Christopher P. Harvey, Esq. Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109

(Name and address of agent for service)

Registrant’s telephone number, including area code: (419) 249-2900

Date of fiscal year end: October 31

Date of reporting period: April 30, 2006

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.

ITEM 1 — REPORTS TO STOCKHOLDERS

The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1):

Harbor Fund’s 2006 Semi-Annual Report included.

SEMI-ANNUAL REPORT

(HARBOR FUND LOGO)

April 30, 2006

Harbor Fund

Table of Contents



Semi-Annual Report Overview		2

Letter from the Chairman		4

Harbor Domestic Equity Funds

HARBOR CAPITAL APPRECIATION FUND
	Manager’s Commentary	6
	Fund Summary	8
	Portfolio of Investments	10

HARBOR MID CAP GROWTH FUND
	Manager’s Commentary	12
	Fund Summary	14
	Portfolio of Investments	16

HARBOR SMALL CAP GROWTH FUND
	Managers’ Commentary	18
	Fund Summary	20
	Portfolio of Investments	22

HARBOR SMALL COMPANY GROWTH FUND
	Manager’s Commentary	24
	Fund Summary	26
	Portfolio of Investments	28

HARBOR LARGE CAP VALUE FUND
	Manager’s Commentary	30
	Fund Summary	32
	Portfolio of Investments	34

HARBOR MID CAP VALUE FUND
	Managers’ Commentary	36
	Fund Summary	38
	Portfolio of Investments	40

HARBOR SMALL CAP VALUE FUND
	Manager’s Commentary	44
	Fund Summary	46
	Portfolio of Investments	48

STATEMENT OF ASSETS AND LIABILITIES		50

STATEMENT OF OPERATIONS		51

STATEMENT OF CHANGES IN NET ASSETS		52

FINANCIAL HIGHLIGHTS		56

Harbor International Equity Funds

HARBOR INTERNATIONAL FUND
	Manager’s Commentary	64
	Fund Summary	66
	Portfolio of Investments	68

HARBOR INTERNATIONAL GROWTH FUND
	Manager’s Commentary	70
	Fund Summary	72
	Portfolio of Investments	74

STATEMENT OF ASSETS AND LIABILITIES		76

STATEMENT OF OPERATIONS		77

STATEMENT OF CHANGES IN NET ASSETS		78

FINANCIAL HIGHLIGHTS		80

Harbor Fixed Income Funds

HARBOR HIGH-YIELD BOND FUND
	Managers’ Commentary	84
	Fund Summary	86
	Portfolio of Investments	88

HARBOR BOND FUND
	Manager’s Commentary	94
	Fund Summary	96
	Portfolio of Investments	98

HARBOR REAL RETURN FUND
	Manager’s Commentary	106
	Fund Summary	108
	Portfolio of Investments	110

HARBOR SHORT DURATION FUND
	Manager’s Commentary	112
	Fund Summary	114
	Portfolio of Investments	116

HARBOR MONEY MARKET FUND
	Manager’s Commentary	118
	Fund Summary	120
	Portfolio of Investments	122

STATEMENT OF ASSETS AND LIABILITIES		123

STATEMENT OF OPERATIONS		124

STATEMENT OF CHANGES IN NET ASSETS		126

FINANCIAL HIGHLIGHTS		130

Notes to Financial Statements		136

Additional Information
	Proxy Voting	146
	Quarterly Portfolio Disclosures	146
	Advisory Agreement Approvals	146

DOMESTIC EQUITY

INTERNATIONAL EQUITY

FIXED INCOME

Harbor Fund

SEMI-ANNUAL REPORT OVERVIEW (Unaudited)

The first half of Harbor Fund’s fiscal year ended April 30, 2006. The total return for each of the 14 portfolios is shown below. All performance figures for the Harbor Funds assume the reinvestment of dividends and capital gains. The unmanaged indices do not reflect fees and expenses and are not available for direct investment. The returns shown do not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of Fund shares. From time to time, the Funds’ adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. For information on the different share classes, please refer to the current prospectus.

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Actual return and principal value on an investment will fluctuate, and the shares, when redeemed, may be worth more or less than their original cost. You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

You should consider a Fund’s investment objective, risks, and fees and expenses carefully before investing. For this and other important information, obtain a current Harbor Fund prospectus by calling 1-800-422-1050 or visiting www.harborfund.com. You should read the prospectus carefully before investing.


		Unannualized Total Return
		6 Months Ended
		April 30, 2006

		Institutional			Retirement			Investor
		Class			Class			Class

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund		6.42	%		6.28	%		6.20	%
	Harbor Mid Cap Growth Fund		19.36			19.21			19.16
	Harbor Small Cap Growth Fund		22.09			21.99			21.87
	Harbor Small Company Growth Fund		6.70	^a		6.60	^a		6.60	^a
	Harbor Large Cap Value Fund		7.56			7.37			7.32
	Harbor Mid Cap Value Fund		11.69			11.52			11.44
	Harbor Small Cap Value Fund		14.53			14.39			14.28
HARBOR INTERNATIONAL EQUITY FUNDS
	Harbor International Fund		29.77	%		29.62	%		29.48	%
	Harbor International Growth Fund		29.61			29.40			29.40
HARBOR FIXED INCOME FUNDS
	Harbor High-Yield Bond Fund		4.85	%		4.78	%		4.65	%
	Harbor Bond Fund		1.05			0.93			N/A
	Harbor Real Return Fund		-1.08	^b		-1.16	^b		N/A
	Harbor Short Duration Fund		1.84			1.73			N/A
	Harbor Money Market Fund		2.04			1.91			N/A


	Unannualized
	Total Return
	6 Months Ended
	April 30, 2006
COMMONLY USED MARKET INDICES
Standard & Poor’s 500 (S&P 500); large cap, domestic equity		9.64	%
Dow Jones Wilshire 5000; entire U.S. stock market		11.02
Russell 1000^® Growth; large cap, domestic equity		7.06
Russell Midcap^® Growth; domestic equity		15.18
Russell 2000^® Growth; small cap, domestic equity		20.31
Russell 1000^® Value; large cap, domestic equity		12.87
Russell Midcap^® Value; domestic equity		13.58
Russell 2000^® Value; small cap, domestic equity		17.52
Morgan Stanley Capital International Europe, Australasia, and Far East (MSCI EAFE^®); international equity		22.89
Morgan Stanley Capital International Europe, Australasia, and Far East Growth (MSCI EAFE^® Growth); international equity		22.26
Merrill Lynch High-Yield Master II; domestic high-yield bonds		4.98
Lehman Brothers Aggregate (LB AGG); domestic bonds		0.56
Lehman Brothers U.S. TIPS (LB U.S. TIPS); domestic bonds		-0.96
Citigroup 1 YR Treasury; domestic bonds		1.76
Merrill Lynch 1 to 3 YR Treasury; domestic bonds		1.41
Merrill Lynch 3-Month U.S. T-Bill; domestic short-term		2.06

Harbor Fund

SEMI-ANNUAL REPORT OVERVIEW—Continued


			HARBOR FUND EXPENSE RATIOS²															Morningstar
																		Average³
			2002*			2003*			2004*			2005*			2006^h			(Unaudited)

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund
		Institutional Class		0.69	%		0.71	%		0.67	%		0.68	%		0.68	%		1.04	%
		Retirement Class¹		N/A			0.94			0.92			0.92			0.93			1.13
		Investor Class¹		N/A			1.13			1.10			1.10			1.09			1.13
	Harbor Mid Cap Growth Fund
		Institutional Class		1.20	%		1.20	%		0.98	%		0.95	%		0.95	%		1.20	%
		Retirement Class¹		N/A			1.40			1.23			1.18			1.19			1.33
		Investor Class¹		N/A			1.40			1.38			1.38			1.35			1.33
	Harbor Small Cap Growth Fund
		Institutional Class		0.95	%		0.93	%		0.83	%		0.84	%		0.84	%		1.31	%
		Retirement Class¹		N/A			1.16			1.08			1.09			1.09			1.42
		Investor Class¹		N/A			1.36			1.25			1.27			1.25			1.42
	Harbor Small Company Growth Fund
		Institutional Class		N/A			N/A			N/A			N/A			0.94	%^a		1.31	%
		Retirement Class		N/A			N/A			N/A			N/A			1.18	^a		1.42
		Investor Class		N/A			N/A			N/A			N/A			1.33	^a		1.42
	Harbor Large Cap Value Fund
		Institutional Class		0.77	%		0.77	%		0.68	%		0.70	%		0.68	%		0.94	%
		Retirement Class¹		N/A			0.93			0.92			0.95			0.93			1.00
		Investor Class¹		N/A			1.17			1.10			1.10			1.09			1.00
	Harbor Mid Cap Value Fund
		Institutional Class		1.20	% ^c,e		1.20	%		1.02	%		0.95	%		0.95	%		1.13	%
		Retirement Class¹		N/A			—	^f		—	^f		1.18			1.20			1.22
		Investor Class¹		N/A			1.39			1.39			1.38			1.36			1.22
	Harbor Small Cap Value Fund
		Institutional Class		1.20	% ^d,e		0.94	%		0.84	%		0.83	%		0.83	%		1.21	%
		Retirement Class¹		N/A			1.18			0.93			1.08			1.08			1.35
		Investor Class¹		N/A			1.29			1.25			1.26			1.25			1.35
HARBOR INTERNATIONAL EQUITY FUNDS
	Harbor International Fund
		Institutional Class		0.87	%		0.89	%		0.86	%		0.87	%		0.86	%		1.21	%
		Retirement Class¹		N/A			1.14			1.11			1.12			1.11			1.22
		Investor Class¹		N/A			1.31			1.29			1.30			1.26			1.22
	Harbor International Growth Fund
		Institutional Class		0.95	%		0.98	%		0.93	%		1.00	%		0.95	%		1.27	%
		Retirement Class¹		N/A			—	^f		1.19			1.24			1.20			1.34
		Investor Class¹		N/A			1.40			1.39			1.39			1.36			1.34
HARBOR FIXED INCOME FUNDS
	Harbor High-Yield Bond Fund
		Institutional Class		N/A			0.93	%^e,g		0.85	%		0.82	%		0.85	%		0.79	%
		Retirement Class		N/A			1.08	^e,g		1.01			—	^f		1.08			0.86
		Investor Class		N/A			1.29	^e,g		1.27			1.25			1.27			0.86
	Harbor Bond Fund
		Institutional Class		0.58	%		0.58	%		0.57	%		0.58	%		0.58	%		0.69	%
		Retirement Class¹		N/A			0.83			0.81			0.83			0.83			0.75
	Harbor Real Return Fund
		Institutional Class		N/A			N/A			N/A			N/A			0.57	%^b		0.53	%
		Retirement Class		N/A			N/A			N/A			N/A			0.81	^b		0.60
	Harbor Short Duration Fund
		Institutional Class		0.31	%		0.36	%		0.31	%		0.39	%		0.39	%		0.62	%
		Retirement Class¹		N/A			0.59			0.55			0.64			0.64			0.71
	Harbor Money Market Fund
		Institutional Class		0.36	%		0.36	%		0.29	%		0.35	%		0.34	%		N/A
		Retirement Class¹		N/A			—	^f		0.53			0.60			0.59			N/A


1	Commenced operations on November 1, 2002.

2	Harbor Fund expense ratios are for operating expenses only and are shown net of all expense offsets, waivers and reimbursements. (See Financial Highlights).

3	Institutional Class comparison includes all actively managed no-load funds with 12b-1 fees less than or equal to 0.25% in the March 31, 2006 Morningstar Universe with the same investment style as the comparable Harbor Fund portfolio. Retirement and Investor Class comparisons include all actively managed no-load funds with 12b-1 fees less than or equal to 0.25% in the March 31, 2006 Morningstar Universe, excluding the Institutional Share Class Funds, with the same investment style as the comparable Harbor Fund portfolio.

a	For the period February 1, 2006 (inception) through April 30, 2006.

b	For the period December 1, 2005 (inception) through April 30, 2006.

c	For the period March 1, 2002 (inception) through October 31, 2002.

d	For the period December 14, 2001 (inception) through October 31, 2002.

e	Annualized.

f	Assets in this class were too small to incur any expense for the period.

g	For the period December 1, 2002 (inception) through October 31, 2003.

h	Unaudited annualized figures for the six-month period ended April 30, 2006.

*	Audited.

Letter from the Chairman



David G. Van Hooser
Chairman

Dear Fellow Shareholder:

Stock markets rose sharply around the world in the fiscal half year ended April 30, 2006. International stocks outperformed U.S. equities, helped in part by the weakness of the U.S. dollar. Stock market gains were supported by good corporate earnings and signs of encouraging economic growth in a number of countries. Equity markets largely ignored rising interest rates, high energy and commodity prices, and, in the U.S., signs the housing market was beginning to lose strength. Bonds did not fare as well as concerns about inflation led to higher interest rates. Bond prices move inversely to interest rates; so with higher rates, bond prices decline.

Harbor equity funds were led by the Harbor International Fund and the Harbor International Growth Fund; both funds had returns in the fiscal first half of over 29%. Harbor’s domestic equity funds were led by solid performances of the Harbor Mid Cap Growth and Harbor Small Cap Growth funds. The performances of Harbor fixed income funds reflected the impact of higher interest rates. Shorter term fixed income funds such as the Harbor Money Market Fund and the Harbor Short Duration Fund outperformed two of Harbor’s three intermediate bond funds. The only exception was the Harbor High-Yield Bond Fund, which had the highest absolute return among our fixed income funds; high-yield securities in the fund tend to be less sensitive to interest rate movements than to the performance of the underlying companies that issue the securities.

Returns of various market indices for periods ending April 30, 2006 and for 30 years ending December 31, 2005 are shown in the table below.


	RETURNS FOR THE PERIOD ENDED APRIL 30, 2006

													30 Years
							Average Annual						1976-2005
													Annual Rates as of
	6 Months			1 Year			5 Years			10 Years			December 31, 2005

Dow Jones Wilshire 5000 (entire U.S. stock market)		11.02	%		18.61	%		4.52	%		8.99	%		13.03	%
S&P 500 (large cap stocks)		9.64			15.42			2.70			8.94			12.72
Russell Midcap^® (mid cap stocks)		14.35			26.42			10.85			12.43			N/A
Russell 2000^® (small cap stocks)		18.91			33.47			10.90			9.58			N/A
Russell 3000^® Growth (growth stocks of the largest 3000 U.S. stocks)		8.19			16.90			-0.22			6.00			N/A
Russell 3000^® Value (value stocks of the largest 3000 U.S. stocks)		13.28			19.33			7.89			11.34			N/A
MSCI EAFE^® (foreign stocks)		22.89			33.49			9.18			6.68			12.07
Merrill Lynch High-Yield Master II (high-yield bonds)		4.98			9.09			8.22			6.75			N/A
LB Aggregate (domestic bonds)		0.56			0.71			5.16			6.33			N/A
Merrill Lynch 3-Month U.S. T-Bill (proxy for money market returns)		2.06			3.68			2.23			3.82			N/A

Domestic Equity

U.S. equity markets were strong in the fiscal first half, with small and mid capitalization stocks continuing to lead the way. Value stocks again outperformed growth. All sectors of the Standard & Poor’s 500 Index had positive returns, led by materials, energy, and industrials.

Harbor’s small cap and mid cap growth portfolios were the best performers among our domestic equity funds. The Harbor Mid Cap Growth Fund (Institutional Class) had a return of 19.36%, beating its Russell Midcap^® Growth benchmark, which was up 15.18%. The Harbor Small Cap Growth Fund (Institutional Class) returned 22.09%, outpacing its Russell 2000^® Growth benchmark’s 20.31% return. The newest member of the Harbor Fund family, the Harbor Small Company Growth Fund, also outperformed its benchmark since its inception on February 1, 2006. Comments from portfolio managers, performance data, and other information on the Harbor domestic equity funds begin on page 6.

International Equity

International equity markets did even better than the U.S. markets. The MSCI EAFE^® Index of foreign stocks outpaced the broad U.S. stock market, as measured by the Dow Jones Wilshire 5000 Composite Index, by more than 11 percentage points. Stocks in 9 of the 10 sectors in the MSCI EAFE^® Index had double-digit returns, led by materials and industrials.

With returns of over 29%, Harbor’s international equity funds were the two best performers within Harbor Fund. The Harbor International Fund (Institutional Class) had a return of 29.77%, beating its benchmark, the MSCI EAFE^® Index, which was up 22.89%. The Harbor International Growth Fund (Institutional Class) returned 29.61% and topped its benchmark, the MSCI EAFE^® Growth Index’s 22.26% return. Comments from portfolio managers, performance data, and other information on the Harbor international equity funds begin on page 64.

Fixed Income

The Federal Reserve raised its target for the federal funds rate four times in the fiscal first half for a total increase of 100 basis points to 4.75%. The yield of the benchmark 10-year Treasury Note rose to 5.05% at the end of the fiscal half-year, an increase of 50 basis points.

As it did in fiscal 2005, the bond market continued to favor investments at the short end of the yield curve. For example, the Harbor Short Duration Fund (Institutional Class) returned 1.84%, slightly better than its benchmark, while the Harbor Money Market Fund (Institutional Class) returned 2.04%.

With rising interest rates, the market was especially challenging for intermediate and long-term bonds. The Harbor Bond Fund (Institutional Class) had a modest total return of 1.05%, although it beat its benchmark by 49 basis points. The Harbor Real Return Fund (Institutional Class) had a return of -1.08% for the five months from its inception on December 1, 2005, although the fund outperformed its benchmark by 5 basis points. The Harbor High-Yield Bond Fund (Institutional Class) had a total return of 4.85%, as the high-yield market outpaced most other fixed-income categories. Comments from portfolio managers, performance data, and other information on the Harbor fixed income funds begin on page 84.

New Funds

Harbor Fund added two funds during the fiscal first half, the first additions to the Harbor fund family since the Harbor High-Yield Bond Fund was introduced in 2002. The Harbor Real Return Fund started on December 1, 2005. It is managed by John Brynjolfsson of Pacific Investment Management Company LLC (“PIMCO”). PIMCO is one of the world’s leading fixed-income fund-management companies and manager of the Harbor Bond Fund since its inception in 1987. The Harbor Small Company Growth Fund, which began on February 1, 2006, is managed by Carl Wilk of NorthPointe Capital LLC (“NorthPointe”). NorthPointe has an experienced team of investment managers who focus exclusively on U.S. equity markets.

Long-Range Focus

The generally strong equity markets worldwide have caused some investment professionals to note that asset classes are becoming increasingly correlated. The more correlated one asset class is with another, the more their returns tend to move together in the same direction. While correlations between certain asset classes have increased recently, diversification benefits can still be achieved by asset allocation strategies.

A sound long-term investment plan includes a mix of stocks, bonds, and cash, consistent with your long term objectives and your tolerance for risk. Past performance is no guarantee of future success. Yet history suggests strongly that a diversified asset allocation maintained over one’s investment time horizon gives each investor an excellent opportunity to achieve his or her financial objectives over the long-term.

New Independent Trustee

In February 2006, the Harbor Fund board of trustees elected Raymond J. Ball as an independent trustee. Mr. Ball is the Sydney Davidson Professor of Accounting at the Graduate School of Business, University of Chicago. Mr. Ball brings the number of independent trustees to four, representing 80% of the board.

Mr. Ball shares with all Harbor Fund trustees, officers and everyone associated with Harbor Fund, the focus on our key principle: acting in the best interests of Harbor Fund shareholders.

Thank you for your investment in Harbor Fund.

June 20, 2006


		David G. Van Hooser Chairman

Harbor Domestic Equity Funds

Harbor Capital Appreciation Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Jennison Associates LLC

466 Lexington Avenue

New York, NY 10017

Spiros Segalas

Portfolio Manager (since 1990)

Jennison has subadvised the Fund since 1990.

INVESTMENT GOAL

Long-term growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

Mid to large cap growth stocks with more volatility than the market.

TOP TEN HOLDINGS (% of net assets)


Google Inc. Cl. A	3.5	%
Adobe Systems Inc.	2.8
Procter & Gamble Co.	2.6
Broadcom Corp. Cl. A	2.4
QUALCOMM Inc.	2.4
Texas Instruments Inc.	2.3
American Express Co.	2.3
Schlumberger Ltd.	2.2
Marvell Technology Group Ltd.	2.2
Microsoft Corp.	2.1

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

While the headline rate of economic growth in the U.S. weakened in the fourth quarter of calendar year 2005, the economy rebounded strongly during the first quarter of 2006, posting solid and balanced growth across almost all fronts. As a result, the Federal Reserve stayed the course on interest-rate policy, raising the federal funds rate by a quarter of a percentage point four times during the six months ended April 30, 2006, to 4.75%.

Whether in response to interest-rate movements or because of sustained strength over a long period, housing demand, as measured by the inventory of unsold homes and the issuance of building permits, began to show signs of weakening in early 2006. Moderate winter weather across much of the country took some of the sting out of higher energy prices, and with continued strong labor markets and modest income growth, consumers continued to spend. American corporations remained strong as well, with continued profit gains, revenue and cash flow growth, and resultant balance sheet strength. Capital expenditures showed signs of acceleration, most notably in telecommunications and technology spending, which have lagged the dramatic recovery in corporate profits since 2003.

Performance

The Harbor Capital Appreciation Fund returned 6.42% (Institutional Class), 6.20% (Investor Class), and 6.28% (Retirement Class) for the six months ended April 30, 2006, underperforming the Russell 1000^® Growth benchmark, which advanced 7.06%. The Fund also underperformed the broader market as measured by the Standard & Poor’s 500 Index, which rose 9.64%. In both indices, energy and industrials made the largest gains among the major economic sectors, while health care and consumer staples lagged.

Energy made the largest contribution by a substantial margin to the Fund’s absolute returns, followed by financials and information technology. Stock selection drove the Fund’s strong relative performance in information technology, energy, and financials but worked less well in health care and consumer discretionary. Our underweighted position in industrials also detracted from performance.

The Fund’s energy holdings excelled, as high oil prices persisted. For decades, oil companies have spent little on exploration and development, while global demand has increased steadily, resulting in tight supplies. Many companies in the energy sector have benefited from the price environment, but several of our holdings, including exploration and production companies Suncor Energy and Occidental Petroleum and energy services firm Schlumberger, have shown particular strength.

The Fund’s information technology holdings posted strong absolute and relative returns as well. Google has had extraordinary success since going public, as high revenue growth has led to much

DOMESTIC EQUITY

Harbor Capital Appreciation Fund

MANAGER’S COMMENTARY—Continued

better earnings than generally projected. We believe the company will remain in an exceptional, albeit slower, phase of revenue and earnings growth and that its long-term valuation will be driven by significant growth in revenues, earnings, and cash flows. We consider Google’s technological lead and dominant position in online web search a unique strength that has enabled the company to monetize its search activity at a rate meaningfully higher than its competitors. In our view, Google’s continued investment in capital and research and development should lead to new streams of revenue through product innovation, new formats, and new technologies. Strength in mobile phone units and preliminary improvements in telecommunications capital spending led to substantial gains at communications-related information technology holdings Texas Instruments, Nokia, and QUALCOMM.

In the financials sector, Goldman Sachs, Merrill Lynch, Charles Schwab, UBS, and JPMorgan Chase performed well. Strong profit improvement at these companies reflected the health of the financial markets. Goldman Sachs and Merrill Lynch benefited from trading as well as merger and acquisition activity, while Schwab continued to enjoy the fruits of its repositioned individual investor and institutional asset management services. UBS’s investment banking business has delivered stable results in a variety of market conditions; increased assets under management reflect the company’s brand enhancements and investments in distribution networks.

Health care holdings were the greatest detractors from Fund performance. St. Jude Medical, a leading player in implantable cardiac defibrillators, and Alcon, a market leader in ophthalmic drugs and devices, lost ground, as did health care intermediaries UnitedHealth Group, Caremark Rx, WellPoint, and CIGNA. The widespread weakness in the health care service industry appears to reflect investor concerns that profitability is peaking and signs that price competition is emerging. Negative returns of biotechnology holdings Genentech and Amgen came about as the companies apparently gave back some of their sizable near-term gains.

Stock selection in the consumer discretionary sector, specifically retailers Chico’s and Target as well as Getty Images and Cheesecake Factory, also took a toll. Weakness in the sector could be a precursor to a widely expected slowdown in consumer spending. The Fund’s underweighted position in industrials also diminished relative performance, although holdings that were added late in the period—Boeing, United Technologies, and 3M—performed well.

Outlook and Strategy

The Fund continues to invest in what we believe are high-quality companies with strong balance sheets and proven management teams. We look for superior long-term business fundamentals that should provide sustainable, attractive growth opportunities.

We are monitoring carefully the capacity of consumers to spend. Deceleration in the housing market is a new wrinkle in the equation, but increased corporate spending could help to mitigate the effects of a slowdown on the consumer front. We also are watching the non-U.S. growth horizon for continued signs of improvement, as many of our holdings derive significant revenue and earnings from international operations.

The robust environment for corporate profit growth looks set to continue for the balance of 2006, although we anticipate some deceleration in the rate of gains later in the year. S&P 500 profits are forecast to grow approximately 10% for the year, which would be the fourth consecutive year of double-digit advances. We hold a portfolio of stocks that we believe could grow almost 20% on a weighted-average basis. We expect share prices of these companies to outpace the performances of the popular averages.

This report contains the current opinions of the manager and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Such opinions are subject to change without notice and securities described herein may no longer be included in, or may at any time be removed from, the Fund’s portfolio. This report is distributed for informational purposes only. Information contained herein has been obtained from sources believed reliable, but not guaranteed.

Since the Fund may hold foreign securities, it may be subject to greater risks than funds invested only in the U.S. These risks are more severe for securities of issuers in emerging market regions. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

You should consider the Fund’s investment objective, risks, and fees and expenses carefully before investing. For this and other important information, obtain a Harbor Fund prospectus by calling 1-800-422-1050 or visiting www.harborfund.com. You should read the prospectus carefully before investing.

DOMESTIC EQUITY

Harbor Capital Appreciation Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 012

Cusip: 411511504

Ticker: HACAX

Inception Date: 12-29-1987

RETIREMENT CLASS

Fund #: 212

Cusip: 411511827

Ticker: HRCAX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 412

Cusip: 411511819

Ticker: HCAIX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	62	630
Total Net Assets (000s)	$8,914,432	N/A
Weighted Average Market Cap ($MM)	$71,596.2	$73,054.5
Price/Earnings Ratio (P/E)	29.3x	25.3x
Price/Book Ratio (P/B)	5.5x	5.3x
Beta vs Russell 1000^® Growth Index	1.2	1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	34%	N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell 1000^® Growth Index and the S&P 500 Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor Capital Appreciation Fund

	Institutional Class		6.42	%		23.31	%		0.42	%		8.42	%	$	22,437
	Retirement Class		6.28			23.00			0.23			8.18			21,942
	Investor Class		6.20			22.79			-0.01			7.95			21,496

Comparative Indices

	Russell 1000^® Growth		7.06	%		15.18	%		-0.76	%		6.21	%	$	18,259
	S&P 500		9.64			15.42			2.70			8.94			23,544

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. The performance of the Retirement and Investor Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the respective class.

DOMESTIC EQUITY

Harbor Capital Appreciation Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.68%

Total Net Assets (000s):

$8,200,175

RETIREMENT CLASS

Expense Ratio: 0.93%

Total Net Assets (000s):

$185,146

INVESTOR CLASS

Expense Ratio: 1.09%

Total Net Assets (000s):

$529,111

FEES AND EXPENSE EXAMPLE

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees and (2) ongoing costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses for each share class. You may use the information in the respective class line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line of the respective class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line of the table for each share class below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,064.17	$	3.48
Hypothetical (5% return)		1,000.00		1,021.32		3.41

Retirement Class
Actual	$	1,000.00	$	1,062.78	$	4.75
Hypothetical (5% return)		1,000.00		1,020.08		4.66

Investor Class
Actual	$	1,000.00	$	1,062.03	$	5.58
Hypothetical (5% return)		1,000.00		1,019.28		5.46


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Capital Appreciation Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 1.5%)


Software		9.0
Capital Markets		8.6
Semiconductors & Semiconductor Equipment		8.5
Communications Equipment		7.3
Internet Software & Services		7.3
Biotechnology		5.5
Pharmaceuticals		5.1
Specialty Retail		4.0
Health Care Providers & Services		3.8
Multiline Retail		3.7
Oil, Gas & Consumable Fuels		3.3
Health Care Equipment & Supplies		3.1
Industrial Conglomerates		3.0
Textiles, Apparel & Luxury Goods		2.7
Household Products		2.6
Hotels, Restaurants & Leisure		2.4
Consumer Finance		2.3
Energy Equipment & Services		2.2
Media		2.0
Aerospace & Defense		1.9
Beverages		1.9
Computers & Peripherals		1.8
Electronic Equipment & Instruments		1.8
Insurance		1.8
Food & Staples Retailing		1.6
Diversified Financial Services		1.3


COMMON STOCKS—98.5%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—1.9%
	1,042,600	Boeing Co.	$	87,005
	1,248,200	United Technologies Corp.		78,399

				165,404

BEVERAGES—1.9%
	2,846,300	PepsiCo Inc.		165,769

BIOTECHNOLOGY—5.5%
	2,532,800	Amgen Inc.*		171,470
	2,000,900	Genentech Inc.*		159,492
	2,728,400	Gilead Sciences Inc.*		156,883

				487,845

CAPITAL MARKETS—8.6%
	9,047,700	Charles Schwab Corp.		161,954
	935,200	Goldman Sachs Group Inc.		149,903
	716,500	Legg Mason Inc.		84,891
	2,305,500	Merrill Lynch & Co. Inc.		175,818
	1,632,000	UBS AG (SWS)		190,699

				763,265

COMMUNICATIONS EQUIPMENT—7.3%
	8,400,000	Cisco Systems Inc.*		175,980
	4,857,000	Corning Inc.*		134,199
	5,611,800	Nokia Corp. Sponsored ADR¹		127,164
	4,142,800	QUALCOMM Inc.		212,691

				650,034

COMPUTERS & PERIPHERALS—1.8%
	2,318,800	Apple Computer Inc.*		163,220

CONSUMER FINANCE—2.3%
	3,752,800	American Express Co.		201,938

DIVERSIFIED FINANCIAL SERVICES—1.3%
	2,612,556	JPMorgan Chase & Co.		118,558

ELECTRONIC EQUIPMENT & INSTRUMENTS—1.8%
	4,220,900	Agilent Technologies Inc.*		162,167

ENERGY EQUIPMENT & SERVICES—2.2%
	2,901,200	Schlumberger Ltd.		200,589

FOOD & STAPLES RETAILING—1.6%
	2,357,700	Whole Foods Market Inc.²		144,716

HEALTH CARE EQUIPMENT & SUPPLIES—3.1%
	1,700,400	Alcon Inc.²		172,948
	2,665,800	St. Jude Medical Inc.*		105,246

				278,194

HEALTH CARE PROVIDERS & SERVICES—3.8%
	2,606,400	Caremark Rx Inc.*		118,722
	2,721,400	UnitedHealth Group Inc.		135,362
	1,261,800	WellPoint Inc.*		89,588

				343,672

HOTELS, RESTAURANTS & LEISURE—2.4%
	2,144,600	Cheesecake Factory Inc.²*		67,683
	1,954,300	Marriott International Inc. Cl. A		142,801

				210,484

HOUSEHOLD PRODUCTS—2.6%
	4,027,277	Procter & Gamble Co.		234,428

INDUSTRIAL CONGLOMERATES—3.0%
	1,010,400	3M Co.		86,319
	5,307,400	General Electric Co.		183,583

				269,902

INSURANCE—1.8%
	2,462,900	American International Group Inc.		160,704

DOMESTIC EQUITY

Harbor Capital Appreciation Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

INTERNET SOFTWARE & SERVICES—7.3%
	4,953,900	eBay Inc.²*	$	170,464
	744,400	Google Inc. Cl. A*		311,114
	5,165,900	Yahoo! Inc.*		169,338

				650,916

MEDIA—2.0%
	6,359,600	Walt Disney Co.		177,814

MULTILINE RETAIL—3.7%
	2,150,200	Federated Department Stores Inc.		167,393
	845,300	Kohl’s Corp.*		47,202
	2,253,700	Target Corp.		119,671

				334,266

OIL, GAS & CONSUMABLE FUELS—3.3%
	615,900	Apache Corp.		43,754
	1,248,300	Occidental Petroleum Corp.		128,250
	1,425,600	Suncor Energy Inc. (CAN)²		122,231

				294,235

PHARMACEUTICALS—5.1%
	3,294,900	Novartis AG ADR^1,2		189,490
	2,114,300	Roche Holdings Ltd. Sponsored ADR¹		162,089
	1,058,700	Sanofi-Aventis (FR)		99,840

				451,419

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—8.5%
	5,202,550	Broadcom Corp. Cl. A*		213,877
	3,406,400	Marvell Technology Group Ltd.*		194,471
	4,185,200	Maxim Integrated Products Inc.²		147,570
	5,833,900	Texas Instruments Inc.		202,495

				758,413

SOFTWARE—9.0%
	6,262,200	Adobe Systems Inc.		245,478
	2,871,300	Electronic Arts Inc.*		163,090
	7,930,200	Microsoft Corp.		191,514
	988,000	NAVTEQ Corp.²*		41,022
	2,888,300	SAP AG Sponsored ADR^1,2		157,788

				798,892

SPECIALTY RETAIL—4.0%
	3,066,600	Chico’s FAS Inc.²*		113,648
	3,214,800	Home Depot Inc.		128,367
	1,799,600	Urban Outfitters Inc.²*		41,751
	1,745,400	Williams-Sonoma Inc.²		73,080

				356,846

TEXTILES, APPAREL & LUXURY GOODS—2.7%
	3,250,400	Coach Inc.*		107,328
	1,583,800	Nike Inc. Cl. B		129,618

				236,946

TOTAL COMMON STOCKS (Cost $7,115,936)				8,780,636


SHORT-TERM INVESTMENTS—3.8%
Principal
Amount
(000s)

COMMERCIAL PAPER
		Citigroup Funding Inc.
$	122,604		4.750%—05/01/2006	122,604


Shares

SECURITIES LENDING COLLATERAL
		State Street Navigator Securities Lending
	214,053,364		Prime Portfolio (1-day yield of 4.770%)		214,053

TOTAL SHORT-TERM INVESTMENTS (Cost $336,657)					336,657

TOTAL INVESTMENTS—102.3% (Cost $7,452,593)					9,117,293
CASH AND OTHER ASSETS, LESS LIABILITIES—(2.3)%					(202,861	)

TOTAL NET ASSETS—100.0%				$	8,914,432


1	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

2	A portion or all of this security was out on loan at April 30, 2006.

* Non-income producing security.

(CAN) Canada.

(FR) France.

(SWS) Switzerland.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Wellington Management Company, LLP

75 State Street

Boston, MA 02109

Michael T. Carmen, CFA

Portfolio Manager (since 2005)

Mario E. Abularach, CFA

Equity Research Analyst (since 2006)

Wellington Management

has subadvised the Fund since

September 20, 2005.

INVESTMENT GOAL

Long-term growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

Mid cap companies with significant capital appreciation potential.

TOP TEN HOLDINGS (% of net assets)


Network Appliance Inc.	2.0	%
Kohl’s Corp.	1.8
Alliant Techsytems Inc.	1.7
VeriFone Holdings Inc.	1.7
CSR plc	1.7
Resources Connection Inc.	1.6
Williams-Sonoma Inc.	1.6
State Street Corp.	1.6
Starwood Hotels & Resorts Worldwide Inc. Cl. B	1.5
American Tower Corp. Cl. A	1.4

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

Over the six months ended April 30, 2006, the U.S. equity markets posted higher returns despite rising energy prices and interest rate tightening by the Federal Reserve. The Standard & Poor’s 500 Index rose 9.64%. The top performing sectors within the broad market, represented by the S&P 500, were materials (+23.1%), energy (+17.1%), industrials (+16.0%), telecommunications (+13.2%), and financials (+13.0%). Small cap and mid cap stocks continued to outperform larger cap stocks. Small cap stocks returned 16.9% and mid cap stocks returned 15.3%, as measured by the S&P indices.

Midcap growth stocks continued to perform quite strongly during the six months, with the Russell Midcap Growth^® Index surging ahead 15.18%. The three-year annualized return of the Russell Midcap Growth^® Index was a robust 23.19%, reflecting a strong run-up since these stocks were at recent lows in 2002.

Performance

For the six months ended April 30, 2006, the Harbor Mid Cap Growth Fund outperformed its benchmark by a healthy margin. The Fund generated returns of 19.36% (Institutional Class), 19.16% (Investor Class), and 19.21% (Retirement Class) compared with the 15.18% return by the benchmark, the Russell Midcap Growth^® Index. The portfolio benefited from strong stock selection as performance was positive in 9 of 10 economic sectors. Underweighted exposures in the energy and materials sectors detracted from performance, but stock selection within those sectors dominated, resulting in positive performance.

Our strongest results came from the information technology, financials, and health care sectors. In the technology sector we benefited from non-benchmark holding CSR. This London-based company is a leader in Bluetooth communication chips and has grown with the widespread adaptation of this technology in wireless devices. Tektronix also contributed positively to results. This test and monitoring solutions manufacturer delivered solid earnings resulting from broad-based growth in its markets.

In the financials sector, many of our capital markets-related stocks, including E*TRADE Financial, Julius Baer Holding and NASDAQ Stock Market, outperformed financial stocks represented in the benchmark. We favor this industry over banks, which we believe will be hampered by a peaking credit environment and higher interest rates going forward. Health care holding Shionogi, the developer of Crestor, a statin used to treat high cholesterol, also contributed positively. On an absolute basis, our best performing stocks were gaming company Melco International Development, energy company Cameco, and telecommunications infrastructure company American Tower.

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

MANAGER’S COMMENTARY—Continued

The only sector with negative relative performance was industrials, where results were influenced both positively and negatively by our airline holdings. Gol Linhas Aereas Intelegentes, a Brazilian discount airline, was one of the strongest stocks in the portfolio. However, JetBlue, Southwest Airlines, and Ryanair Holdings all hurt performance. We continue to own the latter two but sold JetBlue as we have become increasingly concerned with its ability to turn a profit in the face of a more favorable air traffic demand environment. Relative results also were hurt by not owning industrials company Joy Global, which manufactures coal mining equipment and was a leading contributor to index performance. Our worst performing stocks on an absolute basis were medical device manufacturer Foxhollow Technologies, our satellite radio holdings Sirius Satellite Radio and XM Satellite Radio, and home builder Standard Pacific.

Outlook and Strategy

Our investment philosophy is based on four key underlying premises. First, we believe that changes in earnings expectations drive security prices. Second, we believe that tangible operating momentum precedes earnings momentum. Third, quality management will provide us with an opportunity to identify companies that will achieve operating excellence. Finally, we believe that our valuation discipline helps control portfolio risk. We like to say that we are growth managers with a value conscience.

Based on this investment philosophy, we utilize bottom-up, fundamental analysis in the context of an opportunistic approach to investing. We consider a very broad universe of available stocks within the mid cap market, typically focusing on companies with expected earnings growth of 15% or higher. To narrow the universe of available companies, we rely on intensive bottom-up fundamental proprietary research.

The Fund is largely constructed without regard to benchmark weightings by sector. However, we typically do not expect to exceed the benchmark weight by more than two times in any given sector. As of the end of April, our largest exposure was to the information technology sector, followed by consumer discretionary and industrials. Our smallest weights were in utilities and consumer staples, where we had no holdings, and in the materials sector.

Stocks of mid cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Since the Fund may also hold foreign securities, it may be subject to greater risks than funds invested only in the U.S. These risks are more severe for securities of issuers in emerging market regions. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 019

Cusip: 411511876

Ticker: HAMGX

Inception Date: 11-01-2000

RETIREMENT CLASS

Fund #: 219

Cusip: 411511793

Ticker: HRMGX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 419

Cusip: 411511785

Ticker: HIMGX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	99	490
Total Net Assets (000s)	$116,897	N/A
Weighted Average Market Cap ($MM)	$6,450.5	$8,170.4
Price/Earnings Ratio (P/E)	36.5x	28.8x
Price/Book Ratio (P/B)	6.7x	5.6x
Beta vs Russell Midcap^® Growth Index	1.1	1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	66%	N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 11-01-2000 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell Midcap^® Growth Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			Life of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Mid Cap Growth Fund

	Institutional Class		19.36	%		42.80	%		2.19	%		-2.45	%	$	8,725
	Retirement Class		19.21			42.62			2.10			-2.55			8,679
	Investor Class		19.16			42.21			2.01			-2.63			8,640

Comparative Index

	Russell Midcap^® Growth		15.18	%		28.27	%		5.77	%		-0.86	%	$	9,535

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.95%

Total Net Assets (000s):

$109,655

RETIREMENT CLASS

Expense Ratio: 1.19%

Total Net Assets (000s):

$76

INVESTOR CLASS

Expense Ratio: 1.35%

Total Net Assets (000s):

$7,166

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,193.60	$	5.17
Hypothetical (5% return)		1,000.00		1,019.98		4.76

Retirement Class
Actual	$	1,000.00	$	1,192.07	$	6.47
Hypothetical (5% return)		1,000.00		1,018.79		5.96

Investor Class
Actual	$	1,000.00	$	1,191.55	$	7.33
Hypothetical (5% return)		1,000.00		1,018.00		6.75


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 4.2%)


Capital Markets		7.3
Software		7.0
Biotechnology		5.9
Specialty Retail		5.8
Commercial Services & Supplies		5.6
Media		4.9
Health Care Providers & Services		4.4
Hotels, Restaurants & Leisure		4.4
Semiconductors & Semiconductor Equipment		4.4
Communications Equipment		4.2
IT Services		4.2
Household Durables		3.9
Electrical Equipment		3.5
Airlines		3.1
Pharmaceuticals		3.1
Oil, Gas & Consumable Fuels		3.0
Aerospace & Defense		2.7
Energy Equipment & Services		2.5
Wireless Telecommunication Services		2.2
Health Care Equipment & Supplies		2.1
Computers & Peripherals		2.0
Multiline Retail		1.8
Electronic Equipment & Instruments		1.4
Chemicals		1.3
Industrial Conglomerates		1.1
Diversified Financial Services		0.9
Construction & Engineering		0.8
Internet & Catalog Retail		0.8
Insurance		0.7
Textiles, Apparel & Luxury Goods		0.5
Real Estate		0.3


COMMON STOCKS—95.8%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—2.7%
	25,400	Alliant Techsytems Inc.¹*	$	2,032
	20,100	Rockwell Collins Inc.		1,149

				3,181

AIRLINES—3.1%
	38,000	Gol Linhas Aereas Inteligentes SA ADR^1,2		1,409
	25,000	Ryanair Holdings plc ADR^1,2*		1,177
	65,500	Southwest Airlines Co.		1,062

				3,648

BIOTECHNOLOGY—5.9%
	31,000	Alkermes Inc.¹*		666
	31,400	Amylin Pharmaceuticals Inc.¹*		1,367
	30,000	Applera Corp.-Applied Biosystems Group		865
	20,000	Cephalon Inc.¹*		1,313
	20,500	CV Therapeutics Inc.¹*		407
	31,000	ICOS Corp.¹*		680
	63,300	Millennium Pharmaceuticals Inc.*		575
	12,500	Vertex Pharmaceuticals Inc.¹*		455
	26,600	ZymoGenetics Inc.¹*		544

				6,872

CAPITAL MARKETS—7.3%
	7,700	BlackRock Inc. Cl. A		1,167
	64,500	ETRADE Financial Corp.		1,605
	13,898	Julius Baer Holding Ltd.—Registered (SWS)		1,332
	31,600	Nuveen Investments Inc. Cl. A¹		1,521
	28,000	State Street Corp.		1,829
	58,300	TD Ameritrade Holding Corp.*		1,082

				8,536

CHEMICALS—1.3%
	10,100	Wacker Chemie AG (GER)*		1,324
	1,473	Wacker Chemie AG (GER)³*		194

				1,518
COMMERCIAL SERVICES & SUPPLIES—5.6%
	23,600	American Reprographics Co.*		837
	8,600	Corporate Executive Board Co.		921
	38,700	Equifax Inc.		1,492
	71,400	Resources Connection Inc.¹*		1,921
	20,800	Stericycle Inc.*		1,369

				6,540

COMMUNICATIONS EQUIPMENT—4.2%
	89,082	CSR plc (UK)*		1,964
	54,700	Polycom Inc.*		1,203
	30,300	Redback Networks Inc.¹*		679
	22,514	TomTom N.V. (NET)³*		1,016

				4,862

COMPUTERS & PERIPHERALS—2.0%
	64,700	Network Appliance Inc.*		2,398

CONSTRUCTION & ENGINEERING—0.8%
	20,700	URS Corp.*		892

DIVERSIFIED FINANCIAL SERVICES—0.9%
	27,700	NASDAQ Stock Market Inc.¹*		1,037

ELECTRICAL EQUIPMENT—3.5%
	28,400	Energy Conversion Devices Inc.¹*		1,421
	25,500	Roper Industries Inc.		1,210
	43,400	Suntech Power Holdings Co. Ltd. ADR²*		1,488

				4,119

ELECTRONIC EQUIPMENT & INSTRUMENTS—1.4%
	5,953	Barco N.V. (BEL)		589
	31,300	Tektronix Inc.¹		1,105

				1,694

ENERGY EQUIPMENT & SERVICES—2.5%
	22,800	BJ Services Co.		868
	16,700	GlobalSantaFe Corp.		1,022
	27,000	Nabors Industries Ltd.*		1,008

				2,898

HEALTH CARE EQUIPMENT & SUPPLIES—2.1%
	7,800	Intuitive Surgical Inc.*		991
	34,900	Kyphon Inc.¹*		1,450

				2,441

HEALTH CARE PROVIDERS & SERVICES—4.4%
	18,200	Covance Inc.*		1,062
	56,200	IMS Health Inc.		1,528
	33,100	Manor Care Inc.		1,451
	30,500	Pharmaceutical Product Development Inc.		1,094

				5,135

HOTELS, RESTAURANTS & LEISURE—4.4%
	19,300	Harrah’s Entertainment Inc.		1,576
	234,400	Melco International Development Ltd. (HK)		527

DOMESTIC EQUITY

Harbor Mid Cap Growth Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

HOTELS, RESTAURANTS & LEISURE—Continued
	16,900	Panera Bread Co. Cl. A¹*	$	1,254
	31,400	Starwood Hotels & Resorts Worldwide Inc. Cl. B		1,802

				5,159

HOUSEHOLD DURABLES—3.9%
	28,600	D.R. Horton Inc.		858
	13,900	Garmin Ltd.¹		1,200
	44,400	Jarden Corp.¹*		1,510
	33,100	Standard Pacific Corp.¹		1,050

				4,618

INDUSTRIAL CONGLOMERATES—1.1%
	20,100	Walter Industries Inc.¹		1,333

INSURANCE—0.7%
	14,800	National Financial Partners Corp.		770

INTERNET & CATALOG RETAIL—0.8%
	31,200	Netflix Inc.¹*		925

IT SERVICES—4.2%
	25,400	Congnizant Technology Solutions Corp. Cl. A*		1,616
	20,800	DST Systems Inc.*		1,279
	64,400	VeriFone Holdings Inc.¹*		1,994

				4,889

MEDIA—4.9%
	39,900	DreamWorks Animation SKG Cl. A¹*		1,081
	291,300	Gemstar-TV Guide International Inc.*		964
	84,500	Live Nation Inc.*		1,606
	267,400	Sirius Satellite Radio Inc.¹*		1,251
	2,600	Univision Communications Inc. Cl. A*		93
	36,000	XM Satellite Radio Holdings Inc. Cl. A*		728

				5,723

MULTILINE RETAIL—1.8%
	37,300	Kohl’s Corp.*		2,083

OIL, GAS & CONSUMABLE FUELS—3.0%
	32,500	Cameco Corp. (CAN)		1,321
	35,500	Chesapeake Energy Corp.¹		1,125
	15,000	EOG Resources Inc.		1,053

				3,499

PHARMACEUTICALS—3.1%
	40,900	Elan Corp. plc ADR^1,2*		602
	24,600	Forest Laboratories Inc.*		993
	98,500	Shionogi & Co. Ltd. (JP)*		1,662
	21,900	The Medicines Co.¹*		421

				3,678

REAL ESTATE—0.3%
	19,292	Host Hotels & Resorts Inc.		406

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—4.4%
	69,400	Altera Corp.*		1,516
	43,100	Cree Inc.¹		1,285
	35,100	International Rectifier Corp.*		1,586
	8,005	Q-Cells AG (GER)*		739

				5,126

SOFTWARE—7.0%
	111,200	Activision Inc.*		1,578
	38,600	Adobe Systems Inc.*		1,513
	36,500	Cognos Inc. (CAN)*		1,360
	22,400	Kronos Inc.¹*		1,022
	18,500	Red Hat Inc.¹*		544
	15,600	salesforce.com inc.¹*		547
	33,900	THQ Inc.¹*		869
	18,400	Transaction Systems Architects Inc. Cl. A*		735

				8,168

SPECIALTY RETAIL—5.8%
	25,900	Abercrombie & Fitch Co. Cl. A		1,573
	18,050	Advance Auto Parts Inc.*		726
	23,300	GameStop Corp. Cl. A¹*		1,100
	41,200	Tiffany & Co.¹		1,437
	45,800	Williams-Sonoma Inc.*		1,918

				6,754

TEXTILES, APPAREL & LUXURY GOODS—0.5%
	33,600	Fossil Inc.¹*		546

WIRELESS TELECOMMUNICATION SERVICES—2.2%
	49,500	American Tower Corp. Cl. A*		1,690
	26,400	Crown Castle International Corp.*		888

				2,578

TOTAL COMMON STOCKS (Cost $100,784)				112,026


SHORT-TERM INVESTMENTS—31.8%
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	6,186	Repurchase Agreement with Bank of America dated April 28, 2006 due May 1, 2006 at 4.680% collateralized by a U.S. Treasury Bond (market value $6,236)	6,186


Shares

SECURITIES LENDING COLLATERAL
		State Street Navigator Securities Lending
	30,914,157		Prime Portfolio (1-day yield of 4.770%)		30,914

TOTAL SHORT-TERM INVESTMENTS (Cost $37,100)					37,100

TOTAL INVESTMENTS—127.6% (Cost $137,884)					149,126

CASH AND OTHER ASSETS, LESS LIABILITIES—(27.6)%					(32,229	)

TOTAL NET ASSETS—100.0%				$	116,897


1	A portion or all of this security was out on loan at April 30, 2006.

2	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

3	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. These securities are priced by an independent pricing service selected by the adviser (Harbor Capital Advisors, Inc.) and are considered to be liquid under procedures established by the Board of Trustees. At April 30, 2006, these securities were valued at $1,210 or 1.04% of net assets.

*  Non-income producing security.

(BEL) Belgium.

(CAN) Canada.

(GER) Germany.

(HK)  Hong Kong.

(JP)  Japan.

(NET) Netherlands.

(SWS) Switzerland.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

MANAGERS’ COMMENTARY (Unaudited)

SUBADVISER

Westfield Capital Management

Company LLC

One Financial Center

23rd Floor

Boston, MA 02111

William Muggia

Portfolio Manager (since 2000)

Arthur Bauernfeind

Portfolio Manager (since 2000)

Ethan Meyers

Portfolio Manager (since 2000)

Scott Emerman

Portfolio Manager (since 2002)

Westfield has subadvised the Fund since its inception in 2000.

INVESTMENT GOAL

Long-term growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

Small cap growth stocks demonstrating consistent or accelerating earnings growth.

TOP TEN HOLDINGS (% of net assets)


Nuance Communications Inc.	2.8	%
Hanover Compressor Co.	2.3
Alexion Pharmaceuticals Inc.	2.2
A.S.V. Inc.	2.1
Arch Coal Inc.	2.1
Immucor Inc.	2.0
Manor Care Inc.	2.0
Laureate Education Inc.	2.0
PerkinElmer Inc.	1.9
Foundation Coal Holdings Inc.	1.9

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The six months ended April 30, 2006 were distinguished by a powerful performance by small cap growth stocks, as the asset class led the U.S. equity markets. The market responded positively as consensus expectations for the economy improved while many companies reported record earnings and profit margins. During this time frame, the Russell 2000^® Growth Index returned 20.31%. Gains were concentrated almost entirely in the first four months of calendar year 2006, reversing a slow finish in the fourth quarter of 2005.

Small cap growth stocks dramatically beat their larger cap counterparts as defined by the Russell 1000^® Growth Index, which returned 7.06% during the six months. While most small cap growth groups registered gains, investors concentrated their buying in cyclical areas of the market, bidding up shares in energy, materials, and industrials.

Performance

The Harbor Small Cap Growth Fund returned 22.09% (Institutional Class), 21.87% (Investor Class), and 21.99% (Retirement Class) for the six months ended April 30, 2006. The Fund’s outperformance of the Russell 2000^® Growth Index was driven by positive stock selection in health care, information technology, and industrials, the Fund’s three biggest sector positions.

The health care sector was one of the Fund’s largest weightings in the portfolio during the last six months and it also was where we added the majority of our gains relative to the benchmark. An above-benchmark weight contributed negatively, as the health care sector was weak in the Russell 2000^® Growth Index. However, our investments produced added value through strong stock selection. We have been able to find several underappreciated growth opportunities in biotechnology and medical devices, and these were among the strongest performers during the period.

One of the top five contributors to Fund returns was Alexion Pharmaceuticals. Alexion has developed a therapy called Eculizamab to treat PNH, a rare blood disorder in which the immune system attacks red-blood cells. The drug represents the only known treatment for this rare condition, and we believe that Alexion’s share price began to more accurately reflect the drug’s market potential after it reported statistically significant Phase III study data.

The Fund also outperformed in technology, a sector where our conviction level has increased in the past 12 months. Two of the top five contributing stocks in the portfolio (speech recognition expert Nuance Communications and semiconductor manufacturer PMC-Sierra) were technology holdings. At the industry level, application software and IT consulting outpaced their peers. While we are optimistic about increased technology spending in areas such as communications equipment, we believe that company-specific fundamentals will identify outperforming securities.

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

MANAGERS’ COMMENTARY—Continued

The industrials and materials sectors, which gained 27% and 44%, respectively, in the Russell 2000^® Growth Index, held some of the most sought-after stocks in the market in the last six months. We have had difficulty rationalizing a meaningful entry point into the commodity-rich materials sector, where volatility and speculation have been rampant. Being underexposed to this sector detracted from relative returns.

We are very positive on the industrials sector, where the Fund averaged a slight overweight during the period. We have focused our attention on those manufacturers that we think are favorably positioned in the business cycle while accelerating revenues faster than costs. The portfolio’s airline and aerospace/defense holdings outperformed, but we were less successful in our environmental services and diversified commercial services holdings.

While we do not tactically allocate to sectors, our negative outlook for consumer spending is reflected in the Fund’s underweight in consumer discretionary stocks. Although low exposure to the sector was beneficial to performance, our goal is to add value through security selection. Unfortunately, stock selection was negative during the last six months, partly the result of individual disappointments such as Morgan’s Hotel Group. We sold the stock when it became clear that New York City union contract negotiations and challenging year-over-year comparisons could make achieving high expectations difficult. Casual dining stock P.F. Chang’s China Bistro also underperformed, and while we acknowledge the restaurant’s premium valuation, falling food costs and the growth prospects of its quick-serve Pei Wei unit give us conviction in the company’s outlook for later this year.

Outlook and Strategy

Data released in the past few months appear to confirm that many economists underestimated the strength and durability of the U.S. economy. While the market has thus responded positively, investors are now focusing on potential inflation risks and the possible continuation of rate hikes by the Federal Reserve. Rather than speculate, we continue to let company-specific fundamentals drive our investment ideas. Ultimately we believe that value will be maximized when we can identify underappreciated companies that are meaningfully accelerating their profitability.

This report contains the current opinions of the managers and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Such opinions are subject to change without notice and securities described herein may no longer be included in, or may at any time be removed from, the Fund’s portfolio. This report is distributed for informational purposes only. Information contained herein has been obtained from sources believed reliable, but not guaranteed.

Stocks of small cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Because the Fund typically invests in about 60-70 companies, an adverse event affecting a particular company may hurt the Fund’s performance more than if it had invested in a larger number of companies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 010

Cusip: 411511868

Ticker: HASGX

Inception Date: 11-01-2000

RETIREMENT CLASS

Fund #: 210

Cusip: 411511769

Ticker: HRSGX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 410

Cusip: 411511777

Ticker: HISGX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	71		1,367
Total Net Assets (000s)	$827,010		N/A
Weighted Average Market Cap ($MM)	$1,858.3		$1,395.1
Price/Earnings Ratio (P/E)	36.2x		35.6x
Price/Book Ratio (P/B)	5.1x		5.3x
Beta vs Russell 2000^® Growth Index	1.0		1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	28%		N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 11-01-2000 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell 2000^® Growth Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual

											Life			Final Value
		6			1			5			of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Small Cap Growth Fund

	Institutional Class		22.09	%		35.54	%		10.55	%		10.00	%	$	16,877
	Retirement Class		21.99			35.29			10.34			9.78			16,696
	Investor Class		21.87			35.01			10.20			9.66			16,595

Comparative Index

	Russell 2000^® Growth		20.31	%		36.13	%		6.05	%		1.89	%	$	11,087

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.84%

Total Net Assets (000s):

$725,609

RETIREMENT CLASS

Expense Ratio: 1.09%

Total Net Assets (000s):

$51,780

INVESTOR CLASS

Expense Ratio: 1.25%

Total Net Assets (000s):

$49,621

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,220.91	$	4.63
Hypothetical (5% return)		1,000.00		1,020.52		4.21

Retirement Class
Actual	$	1,000.00	$	1,219.92	$	6.00
Hypothetical (5% return)		1,000.00		1,019.28		5.46

Investor Class
Actual	$	1,000.00	$	1,218.74	$	6.88
Hypothetical (5% return)		1,000.00		1,018.49		6.26


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 2.7%)


Health Care Equipment & Supplies		9.7
Semiconductors & Semiconductor Equipment		8.9
Oil, Gas & Consumable Fuels		7.4
Biotechnology		7.2
Commercial Services & Supplies		6.4
Machinery		6.1
Internet Software & Services		5.8
Energy Equipment & Services		5.3
Commercial Banks		5.0
Software		4.8
Health Care Providers & Services		3.3
Diversified Consumer Services		3.1
Pharmaceuticals		2.9
Capital Markets		2.7
Hotels, Restaurants & Leisure		2.7
IT Services		2.6
Aerospace & Defense		1.9
Food Products		1.9
Airlines		1.6
Insurance		1.5
Specialty Retail		1.3
Trading Companies & Distributors		1.2
Computers & Peripherals		1.1
Communications Equipment		1.0
Household Durables		1.0
Real Estate		0.9


COMMON STOCKS—97.3%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—1.9%
	698,500	Hexcel Corp.*	$	15,430

AIRLINES—1.6%
	309,900	US Airways Group Inc.*		13,406

BIOTECHNOLOGY—7.2%
	548,500	Alexion Pharmaceuticals Inc.*		18,643
	1,082,200	Human Genome Sciences Inc.*		12,348
	369,700	Nektar Therapeutics		7,952
	390,800	OSI Pharmaceuticals Inc.*		10,384
	287,900	Vertex Pharmaceuticals Inc.*		10,471

				59,798

CAPITAL MARKETS—2.7%
	366,997	Apollo Investment Corp.		6,863
	330,300	Investors Financial Services Corp.		15,808

				22,671

COMMERCIAL BANKS—5.0%
	386,300	East West Bancorp Inc.		15,324
	410,000	Signature Bank*		14,502
	646,400	UCBH Holdings Inc.		11,435

				41,261

COMMERCIAL SERVICES & SUPPLIES—6.4%
	147,675	Corporate Executive Board Co.		15,820
	425,200	Knoll Inc.		9,248
	643,000	Navigant Consulting Inc.*		13,555
	365,750	Waste Connections Inc.*		14,081

				52,704

COMMUNICATIONS EQUIPMENT—1.0%
	372,900	Dycom Industries Inc.*		8,170

COMPUTERS & PERIPHERALS—1.1%
	696,300	Advanced Digital Information Corp.*		5,912
	287,400	Novatel Wireless Inc.*		2,891

				8,803

DIVERSIFIED CONSUMER SERVICES—3.1%
	323,200	Laureate Education Inc.*		16,189
	1,604,200	Stewart Enterprises Inc. Cl. A		9,305

				25,494

ENERGY EQUIPMENT & SERVICES—5.3%
	932,100	Hanover Compressor Co.*		18,791
	336,400	Oil States International Inc.*		13,580
	359,400	Superior Energy Services Inc.*		11,555

				43,926

FOOD PRODUCTS—1.9%
	527,000	Delta & Pine Land Co.		15,589

HEALTH CARE EQUIPMENT & SUPPLIES—9.7%
	336,250	Advanced Medical Optics Inc.*		15,669
	368,100	American Medical Systems Holdings Inc.*		8,176
	576,605	Immucor Inc.*		16,750
	210,300	Palomar Medical Technologies Inc.*		8,873
	754,600	PerkinElmer Inc.		16,179
	357,106	PolyMedica Corp.		14,752

				80,399

HEALTH CARE PROVIDERS & SERVICES—3.3%
	457,000	Gentiva Health Services Inc.*		7,741
	376,900	Manor Care Inc.		16,527
	192,100	Odyssey HealthCare Inc.*		3,341

				27,609

HOTELS, RESTAURANTS & LEISURE—2.7%
	304,650	P.F. Chang’s China Bistro Inc.*		12,981
	623,918	Texas Roadhouse Inc. Cl. A*		9,421

				22,402

HOUSEHOLD DURABLES—1.0%
	546,800	Champion Enterprises Inc.		8,344

INSURANCE—1.5%
	244,100	National Financial Partners Corp.		12,693

DOMESTIC EQUITY

Harbor Small Cap Growth Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

INTERNET SOFTWARE & SERVICES—5.8%
	898,700	Digitas Inc.*	$	12,681
	616,900	Openwave Systems Inc.		11,480
	2,421,300	SkillSoft plc ADR¹*		13,220
	372,381	Sohu.com Inc.*		10,334

				47,715

IT SERVICES—2.6%
	218,200	CheckFree Corp.*		11,755
	1,290,200	Sapient Corp.*		10,102

				21,857

MACHINERY—6.1%
	697,888	A.S.V. Inc.*		17,447
	133,550	Actuant Corp. Cl. A*		8,540
	234,300	Gehl Co.*		8,407
	213,700	Greenbrier Cos. Inc.		8,580
	322,744	RBC Bearings Inc.*		7,646

				50,620

OIL, GAS & CONSUMABLE FUELS—7.4%
	182,300	Arch Coal Inc.		17,317
	308,700	Forest Oil Corp.*		11,289
	315,700	Foundation Coal Holdings Inc.		16,006
	215,700	James River Coal Co.*		7,582
	213,950	Quicksilver Resources Inc.*		8,866

				61,060

PHARMACEUTICALS—2.9%
	690,100	MGI PHARMA Inc.*		12,891
	444,900	Santarus Inc.		3,435
	417,200	The Medicines Co.*		8,018

				24,344

REAL ESTATE—0.9%
	95,900	Capital Trust Inc. Cl. A		2,982
	315,700	DiamondRock Hospitality Co.		4,518

				7,500

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—8.9%
	328,050	ATMI Inc.*		9,317
	254,100	FormFactor Inc.*		10,593
	437,900	Genesis Microchip Inc.		6,884
	1,271,300	PMC-Sierra Inc.*		15,802
	862,317	Spansion Inc. Cl. A*		14,763
	493,100	Tessera Technologies Inc.*		15,814

				73,173

SOFTWARE—4.8%
	172,200	Internet Security Systems Inc.*		3,864
	1,791,500	Nuance Communications Inc.*		22,985
	723,400	Quest Software Inc.*		12,450

				39,299

SPECIALTY RETAIL—1.3%
	351,800	Stage Stores Inc.		10,997

TRADING COMPANIES & DISTRIBUTORS—1.2%
	361,400	Interline Brands Inc.*		9,686

TOTAL COMMON STOCKS (Cost $598,575)				804,950


SHORT-TERM INVESTMENTS—2.7%
(Cost $21,783)
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	21,783	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FNMA Note (market value $22,223)		21,783

TOTAL INVESTMENTS—100.0% (Cost $620,358)				826,733
CASH AND OTHER ASSETS, LESS LIABILITIES—0.0%				277

TOTAL NET ASSETS—100.0%			$	827,010


1	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Small Company Growth Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

NorthPointe Capital^® LLC

101 West Big Beaver Road

Suite 745

Troy, MI 48084

Carl Wilk, CFP

Portfolio Manager (since 2006)

NorthPointe has subadvised the Fund since its inception in 2006.

INVESTMENT GOAL

Long-term growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

Small cap growth stocks demonstrating consistent or accelerating earnings growth.

TOP TEN HOLDINGS (% of net assets)


ON Semiconductor Corp.	2.0	%
The Andersons Inc.	2.0
World Fuel Services Corp.	1.9
World Acceptance Corp.	1.9
j2 Global Communications Inc.	1.9
SunOpta Inc. (CAN)	1.8
Smith Micro Software Inc.	1.8
Medallion Financial Corp.	1.7
VCA Antech Inc.	1.7
Jarden Corp.	1.7

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

For the three months ended April 30, 2006, the Russell 2000^® Growth Index of small cap growth stocks gained 4.0%, while the broader Russell 2000^® Index, representing small cap stocks in both the growth and value categories, rose 4.55%. Financial markets benefited from above-trend economic growth and strength in corporate profits. These factors have led to increased corporate capital spending.

Eight of the 10 economic sectors in the Russell 2000^® Growth Index posted positive returns. The leading sector was materials, with a gain of 11%. Industrials were up 10%, and telecommunications services rose 9%. The only sectors with negative returns were health care and utilities. Both were down 2%.

Performance

The Harbor Small Company Growth Fund returned 6.70% (Institutional Class) and 6.60% (Investor Class and Retirement Class) for the three months from its inception on February 1, 2006, through April 30, 2006. By comparison, our benchmark, the Russell 2000^® Growth Index, rose 4.00%.

Our investment process begins by looking for those characteristics that historically have been strong indicators of a company’s future success. These include: minimum expected one-year earnings growth rate of 15%, total-debt-to-market-cap ratio of less than 50%, high return on equity, and a market capitalization of between $200 million and $2 billion. Once we identify companies meeting these parameters, one of our experienced investment professionals begins the due diligence process. This process includes reviewing the company’s financial condition, products, market position, and the depth of its management team. The process concludes with a valuation analysis and a reject-or-invest decision.

Our investment strategy emphasizes that selling is as important as buying. To this end, we are disciplined sellers. We will sell once a stock is priced at twice its expected growth rate. In addition, we will sell if the fundamentals of the company change or the market capitalization exceeds our parameters.

The portfolio is constructed to be well diversified and to attempt to limit individual security risk. We construct the portfolio using a bottom-up approach; as such, our sector weights are determined by the results of our fundamental analysis. Individual securities are limited to 2% of the total portfolio weight.

Our disciplined approach to investing was rewarded in the three months ended April 30, 2006, as stock selection was the dominant driver of the Fund’s outperformance relative to the index. The Fund outperformed the index in six of the nine economic sectors in which it was invested, including double-digit returns in consumer staples, consumer discretionary, materials, and

DOMESTIC EQUITY

Harbor Small Company Growth Fund

MANAGER’S COMMENTARY—Continued

telecommunications services. In addition, the fund had no investments in utilities stocks, which were down 2% in the index. The only area of the portfolio with a negative return was health care, which was down 5%.

Investments in the consumer discretionary and consumer staples sectors were the biggest contributors to both absolute and relative performance. Consumer discretionary stocks made up about 15% of both the portfolio and the index, but the Fund’s investments in this sector returned 16% compared with 5% for the index. In the consumer staples area, the Fund gained 29% versus 7% for the benchmark. This advantage was further enhanced by an overweighted position in consumer staples: 7% in the Fund compared with 2% in the index.

With respect to individual stocks, two holdings in the consumer staples area— The Andersons, which was up 100%, and SunOpta, which gained 43%—were among the biggest contributors to performance. Other major contributors included Shuffle Master, a consumer discretionary stock, and information technology holding Smith Micro Software, both of which rose 46%. Three of these stocks—The Andersons, SunOpta, and Smith Micro Software—were also among the Fund’s largest holdings as of April 30, 2006.

Detractors from performance included three health care stocks—Merge Healthcare, Axcan Pharma, and Salix Pharmaceuticals. Also among the major detractors from performance was Rimage, an information technology holding. We exited from our positions in Axcan Pharma and Rimage during the three months.

As of April 30, 2006, investments in information technology, consumer discretionary, and health care were the largest sector weights in the portfolio. Compared with the index, the biggest sector overweights were in consumer staples, information technology, and consumer discretionary. The largest below-benchmark allocations were in energy, materials, and industrials.

Outlook and Strategy

As we look forward, volatile commodity prices and speculation about the actions of the Federal Reserve could create near-term headwinds for the market. These factors could lead to higher raw material and borrowing costs for many companies; more importantly, they could also contribute to investor uncertainty. Despite these macro-economic concerns, we continue to adhere to our bottom-up, fundamental approach to stock selection.

Forecasts by market economists and the federal government call for continued economic growth, albeit at a more moderate pace. This backdrop suggests continued earnings growth throughout 2006. Historically, periods of moderating growth have led investors to seek out companies with higher earnings quality and superior business models. Consequently, we anticipate a widening of the gap in earnings between higher quality companies and their competitors. It is in this type of environment where our investment style and process have been most rewarded.

Our strategy remains focused on companies that are of high quality, exhibit greater-than-market earnings growth, and have sustainable competitive advantages, low financial risk, and attractive valuations. We continue to be patient and highly selective in our investment choices. Ultimately, this discipline determines the positioning of our portfolio and concentrates the risk/reward profile on stock selection. Further, we remain focused on our goal of providing investors with superior returns through a complete market cycle.

NorthPointe Capital is a federally registered service mark of Gartmore Global Investments Inc.

Stocks of small cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Small Company Growth Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 026

Cusip: 411511496

Ticker: HGSCX

Inception Date: 02-01-2006

RETIREMENT CLASS

Fund #: 226

Cusip: 411511470

Ticker: HSGRX

Inception Date: 02-01-2006

INVESTOR CLASS

Fund #: 426

Cusip: 411511488

Ticker: HSGIX

Inception Date: 02-01-2006

PORTFOLIO STATISTICS


	Portfolio		Benchmark

Number of Holdings		76		1,367
Total Net Assets (000s)		$5,343		N/A
Weighted Average Market Cap ($MM)		$1,034.0		$1,395.1
Price/Earnings Ratio (P/E)		35.6x		35.6x
Price/Book Ratio (P/B)		4.5x		5.3x
Beta vs Russell 2000^® Growth Index		1.0		1.0
Portfolio Turnover Rate—Unannualized (3-Month Period Ended 04-30-2006)		12%		N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 02-01-2006 through 04-30-2006

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual

											Life			Final Value
		6			1			5			of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Small Company Growth Fund

	Institutional Class		N/A			N/A			N/A			6.70	%	$	10,670
	Retirement Class		N/A			N/A			N/A			6.60			10,660
	Investor Class		N/A			N/A			N/A			6.60			10,660

Comparative Index

	Russell 2000^® Growth		20.31	%		36.13	%		6.05	%		4.00	%	$	10,400

DOMESTIC EQUITY

Harbor Small Company Growth Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.94%

Total Net Assets (000s):

$3,107

RETIREMENT CLASS

Expense Ratio: 1.18%

Total Net Assets (000s):

$1,066

INVESTOR CLASS

Expense Ratio: 1.33%

Total Net Assets (000s):

$1,170

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the period February 1, 2006 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(February 1, 2006)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,067.00	$	2.37
Hypothetical (5% return)¹		1,000.00		1,020.03		4.71

Retirement Class
Actual	$	1,000.00	$	1,066.00	$	2.98
Hypothetical (5% return)¹		1,000.00		1,018.84		5.91

Investor Class
Actual	$	1,000.00	$	1,066.00	$	3.35
Hypothetical (5% return)¹		1,000.00		1,018.09		6.66


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 89/365 (to reflect the life of the Fund).
1	The hypothetical expenses reflect amounts as if the Fund had been in existence for the entire fiscal half year.

DOMESTIC EQUITY

Harbor Small Company Growth Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 4.2%)


Semiconductors & Semiconductor Equipment		11.4
Health Care Providers & Services		7.1
Internet Software & Services		6.7
Hotels, Restaurants & Leisure		5.8
Health Care Equipment & Supplies		5.7
Commercial Services & Supplies		5.1
Road & Rail		4.3
Commercial Banks		4.2
Textiles, Apparel & Luxury Goods		4.1
Pharmaceuticals		3.8
Communications Equipment		3.5
Food & Staples Retailing		3.5
Software		3.1
Electronic Equipment & Instruments		2.9
Oil, Gas & Consumable Fuels		2.3
Specialty Retail		2.3
Machinery		2.0
Consumer Finance		1.9
Insurance		1.9
Food Products		1.8
Diversified Financial Services		1.7
Household Durables		1.7
Auto Components		1.5
Aerospace & Defense		1.3
Diversified Telecommunication Services		1.3
Chemicals		1.0
Computers & Peripherals		1.0
Household Products		0.9
Energy Equipment & Services		0.8
Diversified Consumer Services		0.6
Personal Products		0.6


COMMON STOCKS—95.8%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—1.3%
	1,100	Armor Holdings Inc.*	$	67

AUTO COMPONENTS—1.5%
	3,800	LKQ Corp.*		80

CHEMICALS—1.0%
	2,200	American Vanguard Corp.		54

COMMERCIAL BANKS—4.2%
	1,850	East West Bancorp Inc.		73
	2,371	Royal Bancshares of Pennsylvania Inc. Cl. A		56
	1,600	Vineyard National Bancorp		45
	1,000	Wintrust Financial Corp.		52

				226

COMMERCIAL SERVICES & SUPPLIES—5.1%
	2,000	Barrett Business Services Inc.*		53
	1,440	Brady Corp. Cl. A		52
	1,500	CRA International Inc.*		73
	3,500	Kforce Inc.*		49
	1,600	McGrath RentCorp*		43

				270

COMMUNICATIONS EQUIPMENT—3.5%
	2,400	ARRIS Group Inc.*		28
	5,000	Radyne Corp.*		77
	7,500	Sirenza Microdevices Inc.*		79

				184

COMPUTERS & PERIPHERALS—1.0%
	2,000	Electronics For Imaging Inc.*		55

CONSUMER FINANCE—1.9%
	3,475	World Acceptance Corp.*		100

DIVERSIFIED CONSUMER SERVICES—0.6%
	1,246	Escala Group Inc.		34

DIVERSIFIED FINANCIAL SERVICES—1.7%
	7,000	Medallion Financial Corp.		93

DIVERSIFIED TELECOMMUNICATION SERVICES—1.3%
	2,000	NeuStar Inc. Cl. A*		70

ELECTRONIC EQUIPMENT & INSTRUMENTS—2.9%
	5,000	CyberOptics Corp.*		77
	1,375	Multi-Fineline Electronix Inc.*		80

				157

ENERGY EQUIPMENT & SERVICES—0.8%
	700	Lufkin Industries Inc.		45

FOOD & STAPLES RETAILING—3.5%
	2,000	Central European Distribution Corp.*		82
	1,000	The Andersons Inc.		105

				187

FOOD PRODUCTS—1.8%
	9,600	SunOpta Inc. (CAN)*		98

HEALTH CARE EQUIPMENT & SUPPLIES—5.7%
	15,000	Encore Medical Corp.*		82
	1,300	Haemonetics Corp.*		71
	3,000	Symmetry Medical Inc.*		60
	2,500	West Pharmaceutical Services Inc.		89

				302

HEALTH CARE PROVIDERS & SERVICES—7.1%
	3,000	Bio-Reference Laboratories Inc.*		57
	3,500	HealthSpring Inc.*		60
	2,100	Merge Healthcare*		27
	3,900	Option Care Inc.		56
	2,975	VCA Antech Inc.*		92
	3,000	Ventiv Health Inc.*		90

				382

DOMESTIC EQUITY

Harbor Small Company Growth Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

HOTELS, RESTAURANTS & LEISURE—5.8%
	2,000	Buffalo Wild Wings Inc.*	$	86
	1,750	Monarch Casino & Resort Inc.*		55
	2,200	Scientific Games Corp. Cl. A*		84
	2,300	Shuffle Master Inc.*		85

				310

HOUSEHOLD DURABLES—1.7%
	2,700	Jarden Corp.*		92

HOUSEHOLD PRODUCTS—0.9%
	1,000	Central Garden & Pet Co.*		49

INSURANCE—1.9%
	1,100	Navigators Group Inc.*		52
	1,000	ProAssurance Corp.*		50

				102

INTERNET SOFTWARE & SERVICES—6.7%
	6,500	24/7 Real Media Inc.*		66
	2,800	Aladdin Knowledge Systems Ltd. (IL)*		65
	8,000	Interwoven Inc.*		81
	2,000	j2 Global Communications Inc.*		98
	2,475	Openwave Systems Inc.		46

				356

MACHINERY—2.0%
	800	Actuant Corp. Cl. A*		51
	1,600	Gehl Co.*		58

				109

OIL, GAS & CONSUMABLE FUELS—2.3%
	1,600	Petrohawk Energy Corp.*		20
	2,500	World Fuel Services Corp.		100

				120

PERSONAL PRODUCTS—0.6%
	1,200	Parlux Fragrances Inc.*		33

PHARMACEUTICALS—3.8%
	3,100	First Horizon Pharmaceutical Corp.*		69
	3,000	Noven Pharmaceuticals Inc.*		57
	5,500	Salix Pharmaceuticals Ltd.*		75

				201

ROAD & RAIL—4.3%
	2,500	Celadon Group Inc.*		68
	2,200	Genesee & Wyoming Inc. Cl. A*		72
	4,000	Marten Transport Ltd.*		87

				227

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—11.4%
	1,025	Cymer Inc.*		53
	1,900	Diodes Inc.*		77
	15,000	ON Semiconductor Corp.*		108
	5,000	Rudolph Technologies Inc.*		83
	5,700	Silicon Image Inc.*		58
	5,500	Silicon Motion Technology Corp. ADR¹*		82
	2,000	Supertex Inc.*		77
	2,200	Varian Semiconductor Equipment Associates Inc.		72

				610

SOFTWARE—3.1%
	7,500	Smith Micro Software Inc.*		93
	4,000	Sonic Solutions*		71

				164

SPECIALTY RETAIL—2.3%
	1,900	Aaron Rents Inc. Cl. B		51
	1,700	Jos. A. Bank Clothiers Inc.*		71

				122

TEXTILES, APPAREL & LUXURY GOODS—4.1%
	2,500	Crocs Inc.*		75
	1,500	Gildan Activewear Inc. Cl. A (CAN)*		72
	2,000	Volcom Inc.*		71

				218

TOTAL COMMON STOCKS (Cost $4,793)				5,117


SHORT-TERM INVESTMENTS—11.3%
(Cost $603)
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	603	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FHLB Note (market value $617)		603

TOTAL INVESTMENTS—107.1% (Cost $5,396)				5,720
CASH AND OTHER ASSETS, LESS LIABILITIES—(7.1)%				(377	)

TOTAL NET ASSETS—100.0%			$	5,343


1	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

*	Non-income producing security.

(CAN) Canada.

(IL) Israel.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Large Cap Value Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Armstrong Shaw Associates Inc.

45 Grove Street

New Canaan, CT 06840

Jeffrey Shaw

Portfolio Manager (since 2001)

Armstrong Shaw has subadvised the Fund since September 20, 2001.

INVESTMENT GOAL

Long-term total return.

PRINCIPAL STYLE CHARACTERISTICS

Large cap value stocks.

TOP TEN HOLDINGS (% of net assets)


Comcast Corp. Special Cl. A	4.5	%
Bank of America Corp.	4.4
Time Warner Inc.	3.9
Sprint Nextel Corp.	3.8
American International Group Inc.	3.8
Chevron Corp.	3.7
Citigroup Inc.	3.6
Washington Mutual Inc.	3.6
Devon Energy Corp.	3.4
Morgan Stanley	3.2

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The momentum for stocks that developed in the last few months of calendar year 2005 continued into 2006. Stocks rallied on strength in the economy and robust corporate earnings growth. Broader trends in the market included small and mid cap stocks continuing to outperform their large cap counterparts and value-oriented stocks outperforming growth.

For the six months ended April 30, 2006, the Russell 1000^® Value Index bested all other large cap indexes, up 12.87%. The Dow Jones Industrial Average rose 10.2%, followed by the Standard & Poor’s 500 Index, up 9.64%, and the Russell 1000^® Growth Index, up 7.06%. All economic sectors posted positive returns, led by materials, up 25%, and industrials, up over 19%. With the exception of utilities (up 2%) and consumer discretionary (up 8%), all sectors posted double-digit returns.

Performance

The Harbor Large Cap Value Fund returned 7.56% (Institutional Class), 7.32% (Investor Class), and 7.37% (Retirement Class). Our underperformance relative to the Russell 1000^® Value Index was not the result of significant declines in any of our individual holdings. However, overall stock selection hurt our results compared with those of the benchmark, with weak relative performance in energy, materials, and health care. The worst performing individual stock in the portfolio was Dell, which was down 16% and detracted from performance by 35 basis points. Dell sold off on concerns about slowing PC growth in the U.S. and the possibility that the company might reduce gross margins to gain market share.

In energy, our underweighted position, coupled with less robust returns relative to the index, hurt performance. The strong performance of the materials sector was driven by high returns in commodity stocks such as steel, aluminum, copper, and gold. We typically don’t buy many commodity stocks, given our emphasis on more stable businesses with consistent and growing streams of free cash flow.

Trading in the health care sector reflected rotation out of health care services and into pharmaceuticals. Among our portfolio holdings, this hurt WellPoint and HCA, but benefited Abbott and Pfizer. HCA fell 8% as weak admissions growth and increasing bad debt expense continued to hurt operating results and pressure margins. Despite these headwinds, the company generates strong cash flow and has returned cash to shareholders in the form of aggressive share repurchases and modest dividends. We believe it has material upside potential if cyclical pressures should moderate.

Unfortunately, given the makeup of our portfolio, the market during the fiscal half-year rewarded higher-beta, smaller and mid cap stocks, lower quality names, and pure play industrials that were more leveraged to a stronger economy. While our top 10 names included three industrials—

DOMESTIC EQUITY

Harbor Large Cap Value Fund

MANAGER’S COMMENTARY—Continued

Honeywell, Emerson Electric, and United Technologies—that were up over 20%, other holdings in the industrials sector, such as General Electric, Tyco, and Cendant, posted flat to modest returns.

On the positive side, stock selection in the consumer staples and consumer discretionary sectors helped performance. CVS, our only holding in consumer staples, was up 22%. In consumer discretionary, Office Depot rose 47% in response to its ongoing turnaround along with a more favorable industry backdrop, particularly in Europe. Comcast rose 12% on news that first quarter profits more than tripled, driven by strong sales of digital telephone services. Adding phone service to Comcast’s package helped attract a record number of digital video and Internet customers.

Four of our top 10 holdings were financial services companies. Morgan Stanley rose 18% on strong reported earnings, strength in both the debt and equity markets, and increased investment banking activity. Bank of America and Washington Mutual both rose 15%, followed by Citigroup, up 12%.

Outlook and Strategy

Our portfolio sector weightings are similar to those shown in our fiscal 2005 annual report, with overweighted positions in health care, industrials, and consumer discretionary, and underweights in financial services and energy. Our exposure to information technology has increased with the purchases of IBM and Dell early in 2006, resulting in an overweight of approximately 4% versus the benchmark. Our largest sector weights in the portfolio are financials, followed by industrials.

We believe that opportunities for financials in 2006 will be driven largely by the eventual end to the Federal Reserve’s tightening campaign as the housing market continues to slow and the U.S. economy decelerates. When the yield curve steepens, prime beneficiaries should be large money center banks, a category where we own Citigroup and Bank of America.

In the industrial space we favor large multinational companies, such as GE and United Technologies. We are in an unusual period of very strong global growth, so even if economic expansion slows in the U.S., we would expect other parts of the world to remain strong. Expected dollar weakness also should benefit the large multinationals, in our view. We believe that the media space, specifically cable, offers a very attractive contrarian risk/reward opportunity. Here portfolio holdings Comcast and Time Warner stand out. Finally, over 20% of our portfolio companies have announced spinout or divestiture actions planned over the next 12 months, which should serve as a catalyst for unlocking value. Tyco, Cendant, First Data and Sprint Nextel are representative names in this group.

The overall stock market had a surprisingly strong start to 2006, despite the uncertainties of interest rates, oil prices, housing, and global tensions. If anything is mispriced, it seems to be risk. Large, higher-quality companies seem to us to be undervalued in this environment compared to smaller, higher-beta names. We believe any increase in perceived risk in the markets should benefit our bias toward large, high-quality holdings.

Since the Fund typically invests in about 25 to 40 companies, an adverse event affecting a particular company may hurt the Fund’s performance more than if it had invested in a larger number of companies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Large Cap Value Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 013

Cusip: 411511603

Ticker: HAVLX

Inception Date: 12-29-1987

RETIREMENT CLASS

Fund #: 213

Cusip: 411511751

Ticker: HRLVX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 413

Cusip: 411511744

Ticker: HILVX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	38		631
Total Net Assets (000s)	$887,079		N/A
Weighted Average Market Cap ($MM)	$78,541.6		$88,437.8
Price/Earnings Ratio (P/E)	18.3x		19.3x
Price/Book Ratio (P/B)	2.9x		2.6x
Beta vs Russell 1000^® Value Index	1.1		1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	9%		N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell 1000^® Value Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor Large Cap Value Fund

	Institutional Class		7.56	%		10.64	%		5.31	%		9.20	%	$	24,109
	Retirement Class		7.37			10.30			5.12			8.97			23,602
	Investor Class		7.32			10.18			4.87			8.74			23,115

Comparative Index

	Russell 1000^® Value		12.87	%		18.30	%		7.30	%		11.21	%	$	28,930

DOMESTIC EQUITY

Harbor Large Cap Value Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.68%

Total Net Assets (000s):

$628,562

RETIREMENT CLASS

Expense Ratio: 0.93%

Total Net Assets (000s):

$7,691

INVESTOR CLASS

Expense Ratio: 1.09%

Total Net Assets (000s):

$250,826

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,075.64	$	3.50
Hypothetical (5% return)		1,000.00		1,021.32		3.41

Retirement Class
Actual	$	1,000.00	$	1,073.66	$	4.78
Hypothetical (5% return)		1,000.00		1,020.08		4.66

Investor Class
Actual	$	1,000.00	$	1,073.20	$	5.61
Hypothetical (5% return)		1,000.00		1,019.28		5.46


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Large Cap Value Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 2.6%)


Media		10.0
Insurance		8.7
Oil, Gas & Consumable Fuels		8.7
Commercial Banks		6.6
Commercial Services & Supplies		5.6
Industrial Conglomerates		5.5
Capital Markets		5.2
Pharmaceuticals		5.1
Aerospace & Defense		4.6
Health Care Providers & Services		4.2
Wireless Telecommunication Services		3.8
Computers & Peripherals		3.6
Diversified Financial Services		3.6
Thrifts & Mortgage Finance		3.6
Food & Staples Retailing		2.9
Electric Utilities		2.7
Specialty Retail		2.6
Electrical Equipment		2.5
Office Electronics		2.2
IT Services		2.0
Household Durables		1.9
Diversified Consumer Services		1.8


COMMON STOCKS—97.4%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—4.6%
	430,100	Honeywell International Inc.	$	18,279
	361,900	United Technologies Corp.		22,731

				41,010

CAPITAL MARKETS—5.2%
	234,300	Merrill Lynch & Co. Inc.		17,868
	445,600	Morgan Stanley		28,652

				46,520

COMMERCIAL BANKS—6.6%
	777,800	Bank of America Corp.		38,828
	643,580	North Fork Bancorporation Inc.¹		19,391

				58,219

COMMERCIAL SERVICES & SUPPLIES—5.6%
	1,346,000	Cendant Corp.		23,461
	637,500	Pitney Bowes Inc.		26,679

				50,140

COMPUTERS & PERIPHERALS—3.6%
	577,030	Dell Computer Corp.*		15,118
	207,660	International Business Machines Corp.		17,099

				32,217

DIVERSIFIED CONSUMER SERVICES—1.8%
	423,820	Career Education Corp.¹*		15,626

DIVERSIFIED FINANCIAL SERVICES—3.6%
	647,112	Citigroup Inc.		32,323

ELECTRIC UTILITIES—2.7%
	450,600	Exelon Corp.¹		24,332

ELECTRICAL EQUIPMENT—2.5%
	257,640	Emerson Electric Co.		21,887

FOOD & STAPLES RETAILING—2.9%
	870,200	CVS Corp.		25,862

HEALTH CARE PROVIDERS & SERVICES—4.2%
	484,460	HCA Inc.¹		21,263
	225,870	WellPoint Inc.*		16,037

				37,300

HOUSEHOLD DURABLES—1.9%
	453,338	Pulte Homes Inc.¹		16,932

INDUSTRIAL CONGLOMERATES—5.5%
	751,600	General Electric Co.		25,998
	853,370	Tyco International Ltd.		22,486

				48,484

INSURANCE—8.7%
	406,800	Allstate Corp.		22,980
	515,520	American International Group Inc.		33,638
	398,400	Chubb Corp.		20,533

				77,151

IT SERVICES—2.0%
	371,470	First Data Corp.		17,716

MEDIA—10.0%
	1,292,900	Comcast Corp. Special Cl. A¹*		39,860
	254,800	Gannett Inc.		14,014
	1,998,700	Time Warner Inc.		34,778

				88,652

OFFICE ELECTRONICS—2.2%
	1,369,920	Xerox Corp.*		19,234

OIL, GAS & CONSUMABLE FUELS—8.7%
	530,200	Chevron Corp.		32,353
	212,150	ConocoPhillips		14,193
	505,500	Devon Energy Corp.		30,385

				76,931

PHARMACEUTICALS—5.1%
	622,900	Abbott Laboratories		26,623
	725,600	Pfizer Inc.		18,379

				45,002

SPECIALTY RETAIL—2.6%
	572,010	Office Depot Inc.*		23,212

THRIFTS & MORTGAGE FINANCE—3.6%
	699,340	Washington Mutual Inc.		31,512

DOMESTIC EQUITY

Harbor Large Cap Value Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

WIRELESS TELECOMMUNICATION SERVICES—3.8%
	1,376,674	Sprint Nextel Corp.	$	34,142

TOTAL COMMON STOCKS (Cost $744,482)				864,404


SHORT-TERM INVESTMENTS—11.2%
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	28,752	Repurchase Agreement with State Street Corp. dated April 28. 2006 due May 1, 2006 at 4.100% collateralized by a FNMA Note (market value $29,329)	28,752


SHORT-TERM INVESTMENTS—Continued
				Value
Shares				(000s)

SECURITIES LENDING COLLATERAL
		State Street Navigator Securities Lending
	70,173,000		Prime Portfolio (1-day yield of 4.770%)		70,173

TOTAL SHORT-TERM INVESTMENTS (Cost $98,924)					98,925

TOTAL INVESTMENTS—108.6% (Cost $843,406)					963,329
CASH AND OTHER ASSETS, LESS LIABILITIES—(8.6)%					(76,250	)

TOTAL NET ASSETS—100.0%				$	887,079


1	A portion or all of this security was out on loan at April 30, 2006.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

MANAGERS’ COMMENTARY (Unaudited)

SUBADVISER

LSV Asset Management

1 North Wacker Drive

Chicago, IL 60606

Josef Lakonishok, Ph.D.

Portfolio Manager (since 2004)

Robert Vishny, Ph.D.

Portfolio Manager (since 2004)

Menno Vermeulen, CFA

Portfolio Manager (since 2004)

Puneet Mansharamani

Portfolio Manager (since 2006)

LSV has subadvised the Fund since September 30, 2004.

INVESTMENT GOAL

Long-term total return.

PRINCIPAL STYLE CHARACTERISTICS

Mid cap value stocks of companies with inexpensive fundamentals and recent momentum, relative to their peers.

TOP TEN HOLDINGS (% of net assets)


Micron Technology Inc.	1.8	%
Lincoln National Corp.	1.8
Aon Corp.	1.8
KeyCorp	1.6
J.C. Penney Co. Inc.	1.6
American Electric Power Company Inc.	1.6
Amerada Hess Corp.	1.5
Comerica Inc.	1.5
Del Monte Foods Co.	1.5
Archer Daniels Midland Co.	1.5

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

After retreating 3% in October 2005, mid cap stocks posted a positive return in each of the following six months. Over this interval, growth stocks led the market, with the Russell Midcap Growth^® Index returning over 15% for the six months ended April 30, 2006. Smaller capitalization names posted the best results, particularly in the first four months of calendar year 2006.

Continued superior earnings growth relative to large cap stocks seemed to sustain interest in mid cap and small cap names on the part of investors even though valuation levels continued to creep up. Small cap stocks saw renewed interest, particularly in the early part of 2006, as investors poured nearly $10 billion into small cap mutual funds and small cap ETFs. These high levels of demand among less liquid stocks generally lead to outsized returns in mid cap and small cap names.

The strong absolute performance by mid caps came in the face of surging oil and commodity prices, continued unrest in the Middle East, and increasing interest rates. The Federal Reserve continued its campaign of interest rate increases, methodically nudging up rates in 25-basis-point increments at each of its meetings. However, the markets rallied in early 2006 on hope that the Fed might pause and hold rates steady in the near future.

Over the last six months, lower quality stocks delivered demonstrably better returns than their higher quality counterparts. Stocks with little or no earnings, low share prices (in absolute terms), high betas, and higher expected earnings growth significantly outperformed the averages. The highest returns in the value segment of the market were seen in materials, industrials, telecommunications services, and information technology. The lagging sectors included utilities and health care.

Performance

The Harbor Mid Cap Value Fund returned 11.69% (Institutional Class), 11.44% (Investor Class), and 11.52% (Retirement Class) for the first half of the 2006 fiscal year. By comparison, the Fund’s benchmark, the Russell Midcap^® Value Index, gained 13.58%. A high absolute return environment in which low quality companies dominate is not favorable to our deep value approach. The last six months were no exception, as the Harbor Mid Cap Value Fund posted a strong absolute return but trailed the benchmark.

When we look at performance attribution, both sector allocations and stock selection were mixed. Our underweights to utilities and health care, the two weakest sectors during the six months, helped. But our overweight to energy, which struggled relative to the benchmark, and our underweight to real estate investment trusts (REITs), which outperformed, hurt results. Stock selection was also mixed. Our positive selections in the materials and industrials sectors were offset by poor picks in the REIT, utilities, and consumer sectors.

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

MANAGERS’ COMMENTARY—Continued

In the materials sector, several stocks stood out, including United States Steel (+88%), Georgia Pacific, which was taken out by a private equity group (+48%), and Southern Copper Corp. (+53%). Other stocks that did particularly well in the period included Archer Daniels Midland (+50%), Western Digital (+74%) and United Rentals (+82%). Weak stock selection in the consumer discretionary sector was a result of exposure to several names that did poorly, including Dana Corp. (-74%), American Greetings (-10%) and Goodyear (-10%).

Outlook and Strategy

LSV’s portfolio decision-making process is strictly quantitative and driven by (1) a proprietary model that ranks securities on fundamental measures of value and indicators of near-term appreciation potential and (2) a portfolio construction process that controls for risk while maximizing the expected return of the portfolio. The objective of the model is to pick undervalued stocks with high near-term appreciation potential. Stocks are ranked simultaneously on an array of variables in order to arrive at an overall expected return ranking for each stock in the universe. The process is purely bottom-up with no emphasis placed on macro-economic analysis.

We added several new positions to the portfolio during the last six months, including: Alliant Energy and TECO Energy in the utilities sector; PPG Industries, Valspar Corp., and Olin Corp. in the materials sector; Micron Technology and Solectron Corp. in the technology sector; Furniture Brands, Kellwood, and Sonic Automotive in the consumer discretionary sector; and Mattel and Del Monte Foods in the consumers staples sector. We sold a number of stocks, including investments that performed well and had become less attractive from a valuation perspective, such as Valero Energy, Southern Copper Corp., Federated Department Stores, and Ryland Group. We also sold Dana Corp., Highwood Properties, and OM Group, which were either flat or down since purchase.

As of the end of April, the portfolio was trading at a significant discount to the market on several valuation metrics. The portfolio was trading at 13.5x trailing earnings, compared to 17.4x for the Russell Midcap^® Value Index, and 7.2x cash flow compared to 9.4x for the value benchmark. Our risk control measures limit the level of exposure to any one particular sector or industry. Currently, the portfolio is overweight in the consumer discretionary, industrials, and financials sectors at the expense of REITs, utilities, and health care. We believe that our disciplined investment strategy will continue to perform well over the long run as the market rewards companies with solid, reasonably priced fundamentals.

Stocks of mid cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 023

Cusip: 411511835

Ticker: HAMVX

Inception Date: 03-01-2002

RETIREMENT CLASS

Fund #: 223

Cusip: 411511728

Ticker: HRMVX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 423

Cusip: 411511736

Ticker: HIMVX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	128	506
Total Net Assets (000s)	$22,550	N/A
Weighted Average Market Cap ($MM)	$6,354.5	$8,531.6
Price/Earnings Ratio (P/E)	19.9x	23.3x
Price/Book Ratio (P/B)	2.3x	2.6x
Beta vs Russell Midcap^® Value Index	1.1	1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	10%	N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 03-01-2002 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell Midcap^® Value Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual

											Life			Final Value
		6			1			5			of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Mid Cap Value Fund

	Institutional Class		11.69	%		22.16	%		N/A			9.33	%	$	14,497
	Retirement Class		11.52			21.97			N/A			9.24			14,451
	Investor Class		11.44			21.68			N/A			9.15			14,397

Comparative Index

	Russell Midcap^® Value		13.58	%		24.75	%		13.69	%		15.76	%	$	18,401

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.95%

Total Net Assets (000s):

$19,497

RETIREMENT CLASS

Expense Ratio: 1.20%

Total Net Assets (000s):

$29

INVESTOR CLASS

Expense Ratio: 1.36%

Total Net Assets (000s):

$3,024

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,116.87	$	4.99
Hypothetical (5% return)		1,000.00		1,019.98		4.76

Retirement Class
Actual	$	1,000.00	$	1,115.18	$	6.29
Hypothetical (5% return)		1,000.00		1,018.74		6.01

Investor Class
Actual	$	1,000.00	$	1,114.38	$	7.13
Hypothetical (5% return)		1,000.00		1,017.95		6.80


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash and short-term investments of 3.7%)


Insurance		10.1
Commercial Banks		7.4
Multi-Utilities		6.0
Household Durables		5.2
Oil, Gas & Consumable Fuels		4.8
Real Estate		4.6
Machinery		4.4
Chemicals		4.2
Food Products		3.9
Electric Utilities		3.5
Food & Staples Retailing		2.8
Specialty Retail		2.8
Thrifts & Mortgage Finance		2.8
IT Services		2.6
Semiconductors & Semiconductor Equipment		2.5
Health Care Providers & Services		2.2
Auto Components		2.0
Metals & Mining		1.9
Textiles, Apparel & Luxury Goods		1.9
Multiline Retail		1.6
Trading Companies & Distributors		1.6
Leisure Equipment & Products		1.5
Beverages		1.3
Road & Rail		1.2
Software		1.2
Capital Markets		1.1
Diversified Telecommunication Services		1.1
Gas Utilities		1.1
Aerospace & Defense		0.9
Airlines		0.9
Computers & Peripherals		0.9
Consumer Finance		0.9
Diversified Financial Services		0.8
Media		0.8
Containers & Packaging		0.7
Electronic Equipment & Instruments		0.6
Paper & Forest Products		0.6
Pharmaceuticals		0.5
Internet Software & Services		0.4
Tobacco		0.4
Diversified Consumer Services		0.3
Household Products		0.3


COMMON STOCKS—96.3%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—0.9%
	4,700	Goodrich Corp.	$	209

AIRLINES—0.9%
	4,400	Alaska Air Group Inc.¹*		167
	7,500	ExpressJet Holdings Inc.*		42

				209

AUTO COMPONENTS—2.0%
	3,600	Autoliv Inc.		199
	9,000	Goodyear Tire & Rubber Co.¹*		126
	5,300	Tenneco Automotive Inc.¹		128

				453

BEVERAGES—1.3%
	1,400	Molson Coors Brewing Co. Cl. B		103
	7,700	PepsiAmericas Inc.		182

				285

CAPITAL MARKETS—1.1%
	1,700	A.G. Edwards Inc.		90
	1,100	Bear Stearns Cos. Inc.		157

				247

CHEMICALS—4.2%
	3,800	Eastman Chemical Co.		207
	1,200	Georgia Gulf Corp.		36
	3,700	Lubrizol Corp.		161
	5,500	Olin Corp.		113
	2,300	PPG Industries Inc.		154
	10,100	Valspar Corp.		286

				957

COMMERCIAL BANKS—7.4%
	7,000	AmSouth Bancorporation		203
	5,100	Colonial BancGroup Inc.		132
	6,000	Comerica Inc.		341
	6,900	Huntington Bancshares Inc.		167
	9,600	KeyCorp		367
	2,600	Popular Inc.¹		54
	1,600	Regions Financial Corp.		58
	3,200	UnionBanCal Corp.		224
	3,100	United Bankshares Inc.¹		113

				1,659

COMPUTERS & PERIPHERALS—0.9%
	10,100	Western Digital Corp.		213

CONSUMER FINANCE—0.9%
	5,100	Advanta Corp. Cl. B¹		195

CONTAINERS & PACKAGING—0.7%
	2,400	Greif Inc. Cl. A		155

DIVERSIFIED CONSUMER SERVICES—0.3%
	3,500	H&R Block Inc.		80

DIVERSIFIED FINANCIAL SERVICES—0.8%
	3,300	CIT Group Inc.		178

DIVERSIFIED TELECOMMUNICATION SERVICES—1.1%
	6,500	CenturyTel Inc.		245

ELECTRIC UTILITIES—3.5%
	10,500	American Electric Power Company Inc.		351
	6,100	Edison International		247
	4,800	Pinnacle West Capital Corp.		192

				790

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

ELECTRONIC EQUIPMENT & INSTRUMENTS—0.6%
	34,100	Solectron Corp.*	$	136

FOOD & STAPLES RETAILING—2.8%
	4,700	Albertson’s Inc.		119
	6,100	Longs Drug Stores Corp.¹		289
	2,700	Safeway Inc.*		68
	5,200	SUPERVALU Inc.		151

				627

FOOD PRODUCTS—3.9%
	9,000	Archer Daniels Midland Co.		327
	28,600	Del Monte Foods Co.		334
	3,600	Pilgrim’s Pride Corp.¹		94
	8,300	Tyson Foods Inc. Cl. A		121

				876

GAS UTILITIES—1.1%
	5,100	National Fuel Gas Co.		170
	2,800	WGL Holdings Inc.¹		82

				252

HEALTH CARE PROVIDERS & SERVICES—2.2%
	2,300	CIGNA Corp.		246
	3,600	Kindred Healthcare Inc.¹*		87
	3,300	Universal Health Services Inc. Cl. B		168

				501

HOUSEHOLD DURABLES—5.2%
	7,700	American Greetings Corp. Cl. A¹		173
	2,700	Beazer Homes USA Inc.¹		156
	4,900	Furniture Brands International Inc.¹		113
	170	NVR Inc.¹*		128
	3,400	Stanley Works		178
	8,200	Tupperware Corp.		173
	2,900	Whirlpool Corp.		260

				1,181

HOUSEHOLD PRODUCTS—0.3%
	1,300	Energizer Holdings Inc.*		67

INSURANCE—10.1%
	9,500	Aon Corp.		398
	4,410	Cincinnati Financial Corp.		188
	6,900	Horace Mann Educators Corp.		120
	2,300	LandAmerica Financial Group Inc.¹		160
	6,911	Lincoln National Corp.¹		402
	2,200	MBIA Inc.		131
	4,400	Nationwide Financial Services Inc. Cl. A		193
	3,900	Principal Financial Group*		200
	2,300	Protective Life Corp.		116
	4,400	Safeco Corp.		228
	2,800	StanCorp Financial Group Inc.		138

				2,274

INTERNET SOFTWARE & SERVICES—0.4%
	10,300	EarthLink Inc.¹*		94

IT SERVICES—2.6%
	3,300	Computer Sciences Corp.*		193
	8,800	Convergys Corp.*		171
	9,300	Sabre Holdings Corp. Cl. A		215

				579

LEISURE EQUIPMENT & PRODUCTS—1.5%
	6,200	Eastman Kodak Co.¹		167
	11,000	Mattel Inc.		178

				345

MACHINERY—4.4%
	8,400	AGCO Corp.¹*		199
	5,100	Albany International Corp. Cl. A		200
	2,000	Cummins Inc.		209
	7,900	Navistar International Corp.*		208
	3,200	SPX Corp.		175

				991

MEDIA—0.8%
	12,000	Sinclair Broadcast Group Inc. Cl. A¹		94
	10,200	Westwood One Inc.		99

				193

METALS & MINING—1.9%
	2,300	Nucor Corp.		250
	2,600	United States Steel Corp.		178

				428

MULTI-UTILITIES—6.0%
	10,200	Alliant Energy Corp.		326
	5,700	DTE Energy Co.		232
	3,600	NiSource Inc.		76
	3,800	NSTAR		105
	9,700	Puget Energy Inc.		201
	9,800	TECO Energy Inc.		157
	14,100	Xcel Energy Inc.		266

				1,363

MULTILINE RETAIL—1.6%
	5,600	J.C. Penney Co. Inc.		367

OIL, GAS & CONSUMABLE FUELS—4.8%
	2,400	Amerada Hess Corp.		344
	1,600	Houston Exploration Co.*		89
	3,600	Sunoco Inc.		292
	3,200	Swift Energy Co.*		135
	3,100	Tesoro Petroleum Corp.*		217

				1,077

PAPER & FOREST PRODUCTS—0.6%
	4,500	MeadWestvaco Corp.		128

PHARMACEUTICALS—0.5%
	5,900	King Pharmaceuticals Inc.		103

REAL ESTATE—4.6%
	16,900	Anthracite Capital Inc.¹		179
	4,000	Crescent Real Estate Equities Co.¹		80
	2,100	First Industrial Realty Trust Inc.¹		82
	10,800	Friedman, Billings, Ramsey Group Inc. Cl. A¹		117
	2,800	Hospitality Properties Trust		121
	18,200	HRPT Properties Trust		200
	7,400	Innkeepers USA Trust		118
	5,200	RAIT Investment Trust¹		135

				1,032

ROAD & RAIL—1.2%
	4,000	CSX Corp.		274

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—2.5%
	6,200	Axcelis Technologies Inc.¹*		37
	9,900	LSI Logic Corp.*		105
	24,600	Micron Technology Inc.*		417

				559

SOFTWARE—1.2%
	5,800	Reynolds & Reynolds Co. Cl. A		173
	4,700	Sybase Inc.		102

				275

DOMESTIC EQUITY

Harbor Mid Cap Value Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

SPECIALTY RETAIL—2.8%
	1,400	Barnes & Noble Inc.	$	63
	4,300	Borders Group Inc.		101
	2,300	Sherwin-Williams Co.		117
	7,700	Sonic Automotive Inc. Cl. A¹		208
	4,500	Stage Stores Inc.¹		141

				630

TEXTILES, APPAREL & LUXURY GOODS—1.9%
	5,300	Kellwood Co.¹		170
	1,500	Liz Claiborne Inc.		58
	3,200	VF Corp.		196

				424

THRIFTS & MORTGAGE FINANCE—2.8%
	3,000	Downey Financial Corp.¹		216
	1,700	IndyMac Bancorp Inc.¹		82
	1,900	MGIC Investment Corp.		134
	3,096	Radian Group Inc.		194

				626

TOBACCO—0.4%
	800	Reynolds American Inc.¹		88

TRADING COMPANIES & DISTRIBUTORS—1.6%
	3,000	GATX Corp.¹		140
	6,100	United Rentals Inc.¹		218

				358

TOTAL COMMON STOCKS (Cost $18,637)				21,723


SHORT-TERM INVESTMENTS—22.5%
Principal
Amount			Value
(000s)			(000s)

REPURCHASE AGREEMENTS
$	839	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FHLB Note (market value $860)	$	839


Shares

SECURITIES LENDING COLLATERAL
		State Street Navigator Securities Lending
	4,219,966		Prime Portfolio (1-day yield of 4.770%)		4,220

TOTAL SHORT-TERM INVESTMENTS (Cost $5,059)					5,059

TOTAL INVESTMENTS—118.8% (Cost $23,696)					26,782
CASH AND OTHER ASSETS, LESS LIABILITIES—(18.8)%					(4,232	)

TOTAL NET ASSETS—100.0%				$	22,550


1	A portion or all of this security was out on loan at April 30, 2006.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

[THIS PAGE INTENTIONALLY LEFT BLANK]

DOMESTIC EQUITY

Harbor Small Cap Value Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

EARNEST Partners LLC

1180 Peachtree Street

Suite 2300

Atlanta, GA 30309

Paul Viera

Portfolio Manager (since 2001)

EARNEST Partners has subadvised the Fund since its inception in 2001.

INVESTMENT GOAL

Long-term total return.

PRINCIPAL STYLE CHARACTERISTICS

Small cap value stocks.

TOP TEN HOLDINGS (% of net assets)


Pharmaceutical Product Development Inc.	3.8	%
Global Payments Inc.	3.2
Cabot Oil & Gas Corp.	2.9
Jefferies Group Inc.	2.6
Covance Inc.	2.6
Philadelphia Consolidated Holding Corp.	2.3
Raymond James Financial Inc.	2.2
SL Green Realty Corp.	2.2
Joy Global Inc.	2.1
The Cooper Companies Inc.	2.0

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The broad small cap equity market as represented by the Russell 2000^® Index rose 18.91% for the six months ended April 30, 2006. Over this same time, the small cap value market as represented by the Russell 2000^® Value Index gained 17.52%. The majority of the market gains came in the first three months of 2006.

Much of the positive performance in the beginning of 2006 can be attributed to improving domestic economic growth. U.S. GDP grew by an estimated 4.8% in the first quarter, after growing less than 2% in the fourth quarter of 2005 and 3.5% for all of 2005. Employment growth has been solid, and real wages and consumer spending are rising. The unemployment rate declined to 4.7%, its lowest level since July 2001. The robust economic expansion is translating into strong corporate profit growth. Although the economy is growing at a healthy rate, inflation has remained largely under control, particularly when excluding more volatile food and energy prices.

The prospects of higher interest rates, along with continued high energy prices, pose the greatest challenges to the equity market. Although still low by historical standards, the yield on the 10-year Treasury Note has risen to over 5%, the highest level in two years. Additionally, the price of oil increased to over $70 per barrel, near the highs experienced in the wake of the Gulf hurricanes last summer. Higher interest rates and higher energy spending threaten consumer spending, which makes up two-thirds of economic activity. Despite these challenges, consumer confidence remained strong, reaching a four-year high earlier this year.

Performance

The Harbor Small Cap Value Fund returned 14.53% (Institutional Class), 14.28% (Investor Class), and 14.39% (Retirement Class) for the first half of the 2006 fiscal year, compared with the 17.52% return by its Russell 2000^® Value Index benchmark. Overall, since its inception in 2001, the Fund has outperformed the benchmark by 3 percentage points on an annualized basis.

Within the Russell 2000^® Value Index, all sectors posted positive returns. The leading sectors were materials (+44%), industrials (+28%), information technology (+29%) and telecommunications (+33%). Materials companies have benefited from a strong rise in commodity prices, and small steel companies in particular have benefited from consolidation and rumors of acquisitions. Within the industrials sector, many companies, including waste management and equipment rental companies, benefited from the Gulf Coast cleanup and build-out following the hurricanes last year. Information technology and telecommunications stocks rose due to merger activity as well as expectations for earnings growth. The energy sector, after leading the market over the prior 12 months, continued to outperform, returning 18%.

DOMESTIC EQUITY

Harbor Small Cap Value Fund

MANAGER’S COMMENTARY—Continued

Although still positive, the weakest sector performers were utilities (+3%), financials (+10%), and consumer staples (+8%). Utilities and financials have lagged the broader market, due in part to the impact of higher interest rates. Investors, who previously looked to utility companies and the accompanying dividend yield for income, had other alternatives as the Federal Reserve continued to raise short-term interest rates.

Holdings that contributed to Fund performance for the period included Joy Global, Bucyrus, Jefferies Group, SL Green Realty, Phillips-Van Heusen, and Oceaneering International. Joy Global and Bucyrus, both global mining equipment manufacturers, rose 114% and 87%, respectively, due to strong commodity prices and the resulting increased equipment and service orders. In the financials sector, Jefferies Group, a middle markets investment bank and institutional trading firm, benefited from increasing investment banking revenue and improving operating margins, resulting in increased profits and a 57% rise in the stock price.

SL Green Realty, a real estate investment trust focused on the Manhattan office market, rose 46%. Within the consumer discretionary sector, Phillips-Van Heusen, the leading dress shirt maker in the U.S., rose 41% as it continued to produce profitable line extensions from the Calvin Klein brand as well as increased operating efficiencies. Oceaneering International, an oil services company that manufactures remote-operated vehicles for sub-sea drilling and construction, led the energy names in the portfolio, rising 27%.

Underperformers included Nabi Biopharmaceuticals, down 50% as a result of its much anticipated Staphvax vaccine having failed in Phase III trials. We sold the holding following that news. The Fund also sold its position in CSK Auto during the quarter due to flat sales growth in light of increased competition, as well as increased expenses that have pressured operating margins. Contact lens manufacturer Cooper Companies fell 20% during the period, having postponed the release of its hydrogel lens, which caused some temporary loss of market share. Homebuilders Meritage, Hovnanian, and Standard Pacific all came under pressure as investors became concerned over rising inventory in select U.S. markets as well as rising interest rates. The Fund’s underweighted positions in information technology, telecommunications, and materials detracted from performance due to the strong gains in each.

Outlook and Strategy

As of April 30, 2006, the Fund’s largest positions were in the financial, industrials, consumer discretionary, and health care sectors. Relative to the benchmark, the portfolio was over-weighted in the consumer discretionary, health care, and energy sectors and was under-weighted in financials, industrials, materials, information technology, and utilities.

In managing the Harbor Small Cap Value Fund, we seek companies with share prices that we believe do not fully reflect their earnings growth outlook. Going forward, we will continue to employ our proven three-step investment methodology: screen the broad universe to identify stocks that are best positioned to outperform; measure and manage downside risk to the benchmark; and perform in-depth, thorough, fundamental research to find the best stocks to include in the portfolio.

Stocks of small cap companies pose special risks, including possible illiquidity and greater price volatility than stocks of larger, more established companies. Because the Fund typically invests in approximately 55-70 companies, an adverse event affecting a particular company may hurt the Fund’s performance more than if it had invested in a larger number of companies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

DOMESTIC EQUITY

Harbor Small Cap Value Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 022

Cusip: 411511843

Ticker: HASCX

Inception Date: 12-14-2001

RETIREMENT CLASS

Fund #: 222

Cusip: 411511710

Ticker: HSVRX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 422

Cusip: 411511694

Ticker: HISVX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	69	1,326
Total Net Assets (000s)	$2,341,174	N/A
Weighted Average Market Cap ($MM)	$2,756.9	$1,263.1
Price/Earnings Ratio (P/E)	25.0x	29.5x
Price/Book Ratio (P/B)	3.5x	2.5x
Beta vs Russell 2000^® Value Index	0.9	1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	14%	N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 12-14-2001 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Russell 2000^® Value Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			Life of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Small Cap Value Fund

	Institutional Class		14.53	%		23.73	%		N/A			20.30	%	$	22,448
	Retirement Class		14.39			23.39			N/A			20.16			22,334
	Investor Class		14.28			23.20			N/A			19.95			22,164

Comparative Index

	Russell 2000^® Value		17.52	%		30.85	%		15.25	%		16.99	%*	$	19,996


*	For the period December 1, 2001 through April 30, 2006.

DOMESTIC EQUITY

Harbor Small Cap Value Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.83%

Total Net Assets (000s):

$2,106,041

RETIREMENT CLASS

Expense Ratio: 1.08%

Total Net Assets (000s):

$65,951

INVESTOR CLASS

Expense Ratio: 1.25%

Total Net Assets (000s):

$169,182

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,145.28	$	4.42
Hypothetical (5% return)		1,000.00		1,020.57		4.16

Retirement Class
Actual	$	1,000.00	$	1,143.89	$	5.75
Hypothetical (5% return)		1,000.00		1,019.33		5.41

Investor Class
Actual	$	1,000.00	$	1,142.78	$	6.64
Hypothetical (5% return)		1,000.00		1,018.49		6.26


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

DOMESTIC EQUITY

Harbor Small Cap Value Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings (% of net assets)

(Excludes net cash, short-term investments and other investment companies of 6.8%)


Health Care Providers & Services		11.0
Machinery		7.5
Insurance		6.8
Capital Markets		6.5
Household Durables		6.5
Oil, Gas & Consumable Fuels		5.6
Commercial Services & Supplies		4.4
Electronic Equipment & Instruments		4.4
Hotels, Restaurants & Leisure		4.2
IT Services		3.5
Thrifts & Mortgage Finance		3.5
Aerospace & Defense		2.7
Commercial Banks		2.4
Chemicals		2.3
Real Estate		2.2
Health Care Equipment & Supplies		2.0
Textiles, Apparel & Luxury Goods		1.9
Construction & Engineering		1.8
Construction Materials		1.8
Energy Equipment & Services		1.8
Multi-Utilities		1.5
Consumer Finance		1.4
Wireless Telecommunication Services		1.3
Trading Companies & Distributors		1.2
Automobiles		1.1
Gas Utilities		1.1
Personal Products		1.0
Biotechnology		0.9
Specialty Retail		0.8
Pharmaceuticals		0.1


COMMON STOCK—93.2%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—2.7%
	1,160,100	Hexcel Corp.¹*	$	25,627
	1,025,398	Moog Inc. Cl. A¹		38,401

				64,028

AUTOMOBILES—1.1%
	888,000	Winnebago Industries Inc.¹		26,152

BIOTECHNOLOGY—0.9%
	701,753	Serologicals Corp.¹		21,839

CAPITAL MARKETS—6.5%
	1,353,173	Eaton Vance Corp.¹		38,525
	925,200	Jefferies Group Inc.¹		61,480
	1,709,968	Raymond James Financial Inc.¹		51,897

				151,902

CHEMICALS—2.3%
	855,200	Scotts Miracle-Gro Co. Cl. A¹		37,851
	538,100	Valspar Corp.¹		15,228

				53,079

COMMERCIAL BANKS—2.4%
	453,179	Oriental Financial Group Inc.¹		5,923
	840,300	Pacific Capital Bancorp¹		28,183
	660,800	Sterling Financial Corp.¹		21,245

				55,351

COMMERCIAL SERVICES & SUPPLIES—4.4%
	647,402	Administaff Inc.¹*		37,388
	2,966,600	Allied Waste Industries Inc.¹*		42,007
	18,439	Kelly Services Inc. Cl. A¹		510
	612,038	School Specialty Inc.¹*		22,260

				102,165

CONSTRUCTION & ENGINEERING—1.8%
	950,100	URS Corp.¹*		40,921

CONSTRUCTION MATERIALS—1.8%
	1,230,861	Headwaters Inc.¹*		41,455

CONSUMER FINANCE—1.4%
	681,200	AmeriCredit Corp.¹*		20,627
	63,100	Student Loan Corp.		13,140

				33,767

ELECTRONIC EQUIPMENT & INSTRUMENTS—4.4%
	1,018,402	Checkpoint Systems Inc.¹*		26,835
	1,776,618	FLIR Systems Inc.¹*		43,438
	6,496,600	Sanmina-SCI Corp.¹*		33,718

				103,991

ENERGY EQUIPMENT & SERVICES—1.8%
	706,500	Oceaneering International Inc.¹*		43,118

GAS UTILITIES—1.1%
	786,700	ONEOK Inc.		25,969

HEALTH CARE EQUIPMENT & SUPPLIES—2.0%
	864,400	The Cooper Companies Inc.¹		47,386

HEALTH CARE PROVIDERS & SERVICES—11.0%
	1,142,300	AMERIGROUP Corp.¹*		29,506
	1,035,900	Covance Inc.*		60,445
	870,862	Healthways Inc.¹*		42,725
	2,463,886	Pharmaceutical Product Development Inc.¹*		88,379
	981,800	Sunrise Senior Living Inc.¹*		36,523

				257,578

HOTELS, RESTAURANTS & LEISURE—4.2%
	700,999	Brinker International Inc.¹*		27,451
	1,124,549	CEC Entertainment Inc.¹*		39,472
	908,194	Sonic Corp.¹		30,797

				97,720

DOMESTIC EQUITY

Harbor Small Cap Value Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

HOUSEHOLD DURABLES—6.5%
	78,400	Harman International Industries Inc.¹	$	6,898
	984,096	Hovnanian Enterprises Inc. Cl. A¹*		39,138
	613,600	Meritage Home Corp.¹*		40,240
	712,000	Snap-on Inc.¹		29,548
	1,139,160	Standard Pacific Corp.¹		36,123

				151,947

INSURANCE—6.8%
	489,301	Commerce Group Inc.		28,384
	707,732	Delphi Financial Group Inc.¹		37,078
	1,663,969	Philadelphia Consolidated Holding Corp.*		55,127
	335,100	Protective Life Corp.¹		16,889
	50,900	State Auto Financial Corp.		1,790
	675,700	United Fire & Casualty Co.¹		20,231

				159,499

IT SERVICES—3.5%
	1,588,600	Global Payments Inc.		75,347
	205,500	MoneyGram International Inc.¹		6,967

				82,314

MACHINERY—7.5%
	849,600	Bucyrus International Inc. Cl. A¹		44,103
	495,600	Harsco Corp.¹		41,308
	766,650	Joy Global Inc.¹		50,361
	1,132,900	Timken Co.¹		39,538

				175,310

MULTI-UTILITIES—1.5%
	1,421,200	PNM Resources Inc.¹		35,971

OIL, GAS & CONSUMABLE FUELS—5.6%
	1,361,000	Cabot Oil & Gas Corp.¹		67,043
	597,900	Houston Exploration Co.¹*		33,434
	736,400	Swift Energy Co.¹*		31,194

				131,671

PERSONAL PRODUCTS—1.0%
	995,319	Elizabeth Arden Inc.¹*		22,753

PHARMACEUTICALS—0.1%
	28,750	Barr Pharmaceuticals Inc.*		1,741

REAL ESTATE—2.2%
	52	Entertainment Properties Trust¹		2
	515,000	SL Green Realty Corp.		50,985

				50,987

SPECIALTY RETAIL—0.8%
	1,115,863	Stein Mart Inc.¹		17,631

TEXTILES, APPAREL & LUXURY GOODS—1.9%
	1,096,900	Phillips-Van Heusen Corp.¹		44,095

THRIFTS & MORTGAGE FINANCE—3.5%
	630,900	Accredited Home Lenders Holding Co.¹*		36,460
	872,550	Astoria Financial Corp.¹		27,328
	565,100	BankUnited Financial Corp.¹		17,343

				81,131

TRADING COMPANIES & DISTRIBUTORS—1.2%
	458,884	Watsco Inc.¹		29,116

WIRELESS TELECOMMUNICATION SERVICES—1.3%
	898,200	American Tower Corp. Cl. A¹*		30,664

TOTAL COMMON STOCKS (Cost $1,745,628)				2,181,251


OTHER INVESTMENT COMPANIES—3.0%
(Cost $68,550)
	931,700	iShares Russell 2000 Value Index Fund¹	69,868


SHORT-TERM INVESTMENTS—29.8%
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	101,732	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FHLB Note (market value $1,006) and FNMA Notes (market value $102,762)	101,732


Shares

SECURITIES LENDING COLLATERAL
		State Street Navigator Securities Lending
	597,139,375		Prime Portfolio (1-day yield of 4.770%)		597,139

TOTAL SHORT-TERM INVESTMENTS (Cost $698,872)					698,871

TOTAL INVESTMENTS—126.0% (Cost $2,513,050)					2,949,990
CASH AND OTHER ASSETS, LESS LIABILITIES—(26.0)%					(608,816	)

TOTAL NET ASSETS—100.0%				$	2,341,174


1	A portion or all of this security was out on loan at April 30, 2006.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Domestic Equity Funds

STATEMENT OF ASSETS AND LIABILITIES—April 30, 2006 (Unaudited)

(All amounts in Thousands, except per share amounts)


			Harbor			Harbor			Harbor			Harbor			Harbor			Harbor		Harbor
			Capital			Mid Cap			Small Cap			Small Company			Large Cap			Mid Cap		Small Cap
			Appreciation			Growth			Growth			Growth			Value			Value		Value

ASSETS
Investments, at identified cost*			$	7,452,593		$	137,884		$	620,358		$	5,396		$	843,406		$	23,696	$	2,513,050

Investments, at value (including securities loaned of $211,334; $30,173; $0; $0; $68,893; $4,126; $589,058)			$	9,117,293		$	142,940		$	804,950		$	5,117		$	934,577		$	25,943	$	2,848,258
Repurchase agreements				—			6,186			21,783			603			28,752			839		101,732
Cash				1			1			1			—			1			1		—
Receivables for:
	Investments sold			181,610			1,173			773			111			—			—		—
	Capital shares sold			11,061			185			612			5			1,407			36		2,614
	Dividends			3,298			28			60			—			1,238			33		1,030
	Interest			49			5			7			—			10			—		35
Withholding tax receivable				444			2			—			—			—			—		—
Prepaid fund insurance				37			—			5			—			2			—		2
Other assets				—			—			—			—			33			—		69

		Total Assets		9,313,793			150,520			828,191			5,836			966,020			26,852		2,953,740

LIABILITIES
Payables for:
	Investments purchased			171,455			2,563			—			488			7,765			42		11,532
	Capital shares reacquired			8,807			36			522			—			457			14		2,355
	Collateral for securities loaned			214,053			30,914			—			—			70,172			4,220		597,139
Accrued expenses:
	Management fees			4,244			64			553			3			415			7		1,349
	12b-1 fees			146			1			20			—			52			1		48
	Trustees’ fees and expenses			22			1			3			—			2			1		6
	Transfer agent fees			532			8			55			—			67			2		127
	Other			102			36			28			2			11			15		10

		Total Liabilities		399,361			33,623			1,181			493			78,941			4,302		612,566

NET ASSETS			$	8,914,432		$	116,897		$	827,010		$	5,343		$	887,079		$	22,550	$	2,341,174

Net Assets Consist of:
	Paid-in capital		$	9,370,739		$	102,705		$	584,330		$	5,057		$	765,188		$	18,899	$	1,896,520
	Undistributed/(overdistributed) net investment income			11,139			(103	)		(1,530	)		(4	)		3,207			81		1,135
	Accumulated net realized gain/(loss)			(2,132,269	)		3,053			37,835			(34	)		(1,239	)		484		6,579
	Unrealized appreciation/(depreciation) of investments			1,664,823			11,242			206,375			324			119,923			3,086		436,940

			$	8,914,432		$	116,897		$	827,010		$	5,343		$	887,079		$	22,550	$	2,341,174

NET ASSET VALUE PER SHARE PER CLASS¹:
Institutional Class
Net assets			$	8,200,175		$	109,655		$	725,609		$	3,107		$	628,562		$	19,497	$	2,106,041
Shares of beneficial interest ²				248,642			14,078			49,547			291			35,311			1,520		95,853
Net asset value per share			$	32.98		$	7.79		$	14.64		$	10.67		$	17.80		$	12.83	$	21.97
Retirement Class
Net assets			$	185,146		$	76		$	51,780		$	1,066		$	7,691		$	29	$	65,951
Shares of beneficial interest ²				5,637			10			3,563			100			433			2		3,008
Net asset value per share			$	32.84		$	7.78		$	14.53		$	10.66		$	17.77		$	12.82	$	21.92
Investor Class
Net assets			$	529,111		$	7,166		$	49,621		$	1,170		$	250,826		$	3,024	$	169,182
Shares of beneficial interest ²				16,180			926			3,438			110			14,156			236		7,777
Net asset value per share			$	32.70		$	7.74		$	14.43		$	10.66		$	17.72		$	12.81	$	21.75


*	Including repurchase agreements and short-term investments.

1	Per share amounts can be recalculated when total net assets and shares of beneficial interest are not rounded to thousands.

2	Par value $0.01 (unlimited authorizations).

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Domestic Equity Funds

STATEMENT OF OPERATIONS—Six Months Ended April 30, 2006 (Unaudited)

(All amounts in Thousands)


				Harbor			Harbor			Harbor			Harbor			Harbor			Harbor			Harbor
				Capital			Mid Cap			Small Cap			Small Company			Large Cap			Mid Cap			Small Cap
				Appreciation			Growth			Growth			Growth¹			Value			Value			Value

Investment Income:
	Dividends			$	29,342		$	164		$	1,458		$	2		$	7,557		$	135		$	7,142
	Interest				4,231			130			391			5			555			11			2,141
	Securities lending income				9,910			39			—			—			234			93			1,867
	Foreign taxes withheld				(1,896	)		(3	)		—			—			—			—			(12	)

		Total Investment Income			41,587			330			1,849			7			8,346			239			11,138
Operating Expenses:
	Management fees				25,548			333			2,890			7			2,469			73			7,904
	12b-1 fees:
		Retirement Class			202			—			57			1			10			—			66
		Investor Class			511			6			50			1			266			3			221
	Shareholder communications				492			33			23			27			27			2			82
	Custodian fees				190			69			58			9			36			38			67
	Transfer agent fees:
		Institutional Class			2,188			23			189			—			166			5			519
		Retirement Class			45			—			13			—			2			—			15
		Investor Class			441			5			43			1			231			2			193
	Professional fees				141			7			14			9			14			—			36
	Trustees’ fees and expenses				43			—			4			—			4			—			11
	Registration fees				53			56			33			60			38			47			112
	Miscellaneous				76			1			8			—			6			1			10

			Total operating expenses		29,930			533			3,382			115			3,269			171			9,236
	Management fees waived				—			(19	)		—			—			—			(30	)		—
	Other expenses waived				—			(80	)		—			(104	)		—			(43	)		—
	Other expense reimbursements and reductions (Note 4)				(33	)		(1	)		(2	)		—			(5	)		—			(11	)

	Net operating expenses				29,897			433			3,380			11			3,264			98			9,225

Net Investment Income/(Loss)					11,690			(103	)		(1,531	)		(4	)		5,082			141			1,913
Realized and Unrealized Gain/(Loss) on Investment Transactions:
	Net realized gain/(loss) on:
		Investments			475,228			3,216			54,869			(34	)		865			486			10,459
		Foreign currency transactions			(38	)		3			—			—			—			—			—
	Change in net unrealized appreciation/(depreciation) of:
		Investments			(2,863	)		10,811			99,758			324			52,212			1,538			272,272
		Translation of assets and liabilities in foreign currencies			123			—			—			—			—			—			—

	Net gain/(loss) on investment transactions				472,450			14,030			154,627			290			53,077			2,024			282,731

	Net Increase/(Decrease) in Net Assets Resulting from Operations			$	484,140		$	13,927		$	153,096		$	286		$	58,159		$	2,165		$	284,644


1	Commenced operations February 1, 2006.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY

Harbor Domestic Equity Funds

STATEMENT OF CHANGES IN NET ASSETS

(All amounts in Thousands)


			Harbor						Harbor
			Capital Appreciation						Mid Cap Growth

			November 1,			November 1,			November 1,			November 1,
			2005			2004			2005			2004
			through			through			through			through
			April 30,			October 31,			April 30,			October 31,
			2006			2005			2006			2005

			(Unaudited)						(Unaudited)
INCREASE/(DECREASE) IN NET ASSETS:
Operations:
	Net investment income/(loss)		$	11,690		$	29,463		$	(103	)	$	(250	)
	Net realized gain/(loss) on investments			475,190			438,353			3,219			11,905
	Net unrealized appreciation/(depreciation) of investments			(2,740	)		571,131			10,811			(3,094	)

		Net increase/(decrease) in net assets resulting from operations		484,140			1,038,947			13,927			8,561

Distributions to Shareholders:
	Net investment income:
		Institutional Class		(7,308	)		(26,041	)		—			—
		Retirement Class		—			(409	)		—			—
		Investor Class		—			(88	)		—			—
	Net realized gain on investments:
		Institutional Class		—			—			(6,715	)		—
		Retirement Class		—			—			(3	)		—
		Investor Class		—			—			(298	)		—

		Total distributions to shareholders		(7,308	)		(26,538	)		(7,016	)		—

Net Increase/(Decrease) Derived from Capital Stock Activity				821,918			(7,004	)		54,788			(3,530	)

	Net increase/(decrease) in net assets			1,298,750			1,005,405			61,699			5,031
Net Assets:
	Beginning of period			7,615,682			6,610,277			55,198			50,167

	End of period*		$	8,914,432		$	7,615,682		$	116,897		$	55,198

* Includes undistributed/(over-distributed) net investment income of:			$	11,139		$	6,757		$	(103	)	$	—


a	Commencement of operations.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Harbor						Harbor Small			Harbor						Harbor						Harbor
Small Cap Growth						Company Growth			Large Cap Value						Mid Cap Value						Small Cap Value

November 1,			November 1,			February 1,			November 1,			November 1,			November 1,			November 1,			November 1,			November 1,
2005			2004			2006^a			2005			2004			2005			2004			2005			2004
through			through			through			through			through			through			through			through			through
April 30,			October 31,			April 30,			April 30,			October 31,			April 30,			October 31,			April 30,			October 31,
2006			2005			2006			2006			2005			2006			2005			2006			2005

(Unaudited)						(Unaudited)			(Unaudited)						(Unaudited)						(Unaudited)
$	(1,531	)	$	(3,286	)	$	(4	)	$	5,082		$	4,923		$	141		$	184		$	1,913		$	1,137
	54,869			67,127			(34	)		865			23,344			486			487			10,459			29,537
	99,758			(6,198	)		324			52,212			18,797			1,538			1,349			272,272			86,282

	153,096			57,643			286			58,159			47,064			2,165			2,020			284,644			116,956

	—			—			—			(2,978	)		(4,200	)		(181	)		(46	)		(1,771	)		—
	—			—			—			(38	)		(37	)		(1	)		—			—			—
	—			—			—			(826	)		(108	)		(16	)		(4	)		—			—
	(51,211	)		(44,035	)		—			—			—			(397	)		(954	)		(26,793	)		(2,966	)
	(3,304	)		(2,943	)		—			—			—			(2	)		(1	)		(736	)		(20	)
	(2,666	)		(1,790	)		—			—			—			(46	)		(113	)		(2,830	)		(162	)

	(57,181	)		(48,768	)		—			(3,842	)		(4,345	)		(643	)		(1,118	)		(32,130	)		(3,148	)

	22,607			(44,306	)		5,057			117,699			298,460			3,591			5,911			277,056			1,222,431

	118,522			(35,431	)		5,343			172,016			341,179			5,113			6,813			529,570			1,336,239
	708,488			743,919			—			715,063			373,884			17,437			10,624			1,811,604			475,365

$	827,010		$	708,488		$	5,343		$	887,079		$	715,063		$	22,550		$	17,437		$	2,341,174		$	1,811,604

$	(1,530	)	$	1		$	(4	)	$	3,207		$	1,967		$	81		$	138		$	1,135		$	993

DOMESTIC EQUITY

Harbor Domestic Equity Fund

STATEMENT OF CHANGES IN NET ASSETS—CAPITAL STOCK ACTIVITY

(All amounts and shares in Thousands)


			Harbor						Harbor
			Capital Appreciation						Mid Cap Growth

			November 1,			November 1,			November 1,			November 1,
			2005			2004			2005			2004
			through			through			through			through
			April 30,			October 31,			April 30,			October 31,
			2006			2005			2006			2005

			(Unaudited)						(Unaudited)
AMOUNT ($)
Institutional Class:
	Net proceeds from sale of shares		$	1,322,854		$	1,297,581		$	50,716		$	20,494
	Reinvested in payment of distributions			6,310			22,924			6,688			—
	Cost of shares reacquired			(769,584	)		(1,609,505	)		(7,785	)		(24,692	)
	Cost of shares reacquired through in-kind redemptions			—			—			—			—

		Net increase/(decrease) in net assets	$	559,580		$	(289,000	)	$	49,619		$	(4,198	)

Retirement Class:
	Net proceeds from sale of shares		$	65,731		$	121,263		$	81		$	12
	Reinvested in payment of distributions			—			409			3			—
	Cost of shares reacquired			(10,637	)		(21,395	)		(23	)		—

		Net increase/(decrease) in net assets	$	55,094		$	100,277		$	61		$	12

Investor Class:
	Net proceeds from sale of shares		$	244,247		$	220,113		$	5,733		$	1,298
	Reinvested in payment of distributions			—			83			297			—
	Cost of shares reacquired			(37,003	)		(38,477	)		(922	)		(642	)

		Net increase/(decrease) in net assets	$	207,244		$	181,719		$	5,108		$	656

SHARES
Institutional Class:
	Shares sold			40,017			45,172			6,850			3,020
	Shares issued in reinvestment of distributions			191			796			950			—
	Shares reacquired			(23,317	)		(56,540	)		(1,030	)		(3,718	)
	Shares reacquired through in-kind redemptions			—			—			—			—

	Net increase/(decrease) in shares outstanding			16,891			(10,572	)		6,770			(698	)
	Beginning of period			231,751			242,323			7,308			8,006

		End of period		248,642			231,751			14,078			7,308

Retirement Class:
	Shares sold			1,979			4,276			11			2
	Shares issued in reinvestment of distributions			—			14			—			—
	Shares reacquired			(323	)		(749	)		(3	)		—

	Net increase/(decrease) in shares outstanding			1,656			3,541			8			2
	Beginning of period			3,981			440			2			—

		End of period		5,637			3,981			10			2

Investor Class:
	Shares sold			7,411			7,427			769			190
	Shares issued in reinvestment of distributions			—			3			42			—
	Shares reacquired			(1,127	)		(1,338	)		(124	)		(96	)

	Net increase/(decrease) in shares outstanding			6,284			6,092			687			94
	Beginning of period			9,896			3,804			239			145

		End of period		16,180			9,896			926			239


a	Commencement of operations.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Harbor						Harbor Small			Harbor						Harbor						Harbor
Small Cap Growth						Company Growth			Large Cap Value						Mid Cap Value						Small Cap Value

November 1,			November 1,			February 1,			November 1,			November 1,			November 1,			November 1,			November 1,			November 1,
2005			2004			2006^a			2005			2004			2005			2004			2005			2004
through			through			through			through			through			through			through			through			through
April 30,			October 31,			April 30,			April 30,			October 31,			April 30,			October 31,			April 30,			October 31,
2006			2005			2006			2006			2005			2006			2005			2006			2005

(Unaudited)						(Unaudited)			(Unaudited)						(Unaudited)						(Unaudited)
$	34,002		$	77,953		$	3,001		$	127,484		$	220,984		$	4,852		$	7,825		$	437,707		$	1,233,823
	43,065			37,495			—			2,258			3,733			549			955			20,761			1,937
	(71,992	)		(169,827	)		(43	)		(87,985	)		(69,339	)		(2,995	)		(4,319	)		(169,373	)		(199,250	)
	—			(30,200	)		—			—			—			—			—			—			—

$	5,075		$	(84,579	)	$	2,958		$	41,757		$	155,378		$	2,406		$	4,461		$	289,095		$	1,036,510

$	5,593		$	48,879		$	1,000		$	4,299		$	2,380		$	2		$	80		$	27,575		$	41,519
	3,304			2,943			—			38			37			3			1			736			20
	(3,701	)		(17,170	)		—			(2,696	)		(1,859	)		(60	)		—			(5,228	)		(7,525	)

$	5,196		$	34,652		$	1,000		$	1,641		$	558		$	(55	)	$	81		$	23,083		$	34,014

$	13,555		$	13,778		$	1,124		$	93,382		$	146,784		$	1,428		$	2,357		$	29,738		$	194,663
	2,650			1,759			—			825			107			62			117			2,580			160
	(3,869	)		(9,916	)		(25	)		(19,906	)		(4,367	)		(250	)		(1,105	)		(67,440	)		(42,916	)

$	12,336		$	5,621		$	1,099		$	74,301		$	142,524		$	1,240		$	1,369		$	(35,122	)	$	151,907

	2,465			6,099			295			7,389			13,297			393			675			21,275			64,862
	3,440			2,900			—			132			224			46			85			1,048			106
	(5,228	)		(13,208	)		(4	)		(5,074	)		(4,177	)		(242	)		(371	)		(8,117	)		(10,435	)
	—			(2,232	)		—			—			—			—			—			—			—

	677			(6,441	)		291			2,447			9,344			197			389			14,206			54,533
	48,870			55,311			—			32,864			23,520			1,323			934			81,647			27,114

	49,547			48,870			291			35,311			32,864			1,520			1,323			95,853			81,647

	401			3,671			100			249			145			—			7			1,334			2,165
	266			228			—			2			2			—			—			37			1
	(270	)		(1,365	)		—			(154	)		(112	)		(5	)		—			(253	)		(391	)

	397			2,534			100			97			35			(5	)		7			1,118			1,775
	3,166			632			—			336			301			7			—			1,890			115

	3,563			3,166			100			433			336			2			7			3,008			1,890

	982			1,095			112			5,438			8,983			115			199			1,471			10,238
	215			137			—			48			6			5			11			131			8
	(284	)		(789	)		(2	)		(1,155	)		(264	)		(20	)		(98	)		(3,276	)		(2,249	)

	913			443			110			4,331			8,725			100			112			(1,674	)		7,997
	2,525			2,082			—			9,825			1,100			136			24			9,451			1,454

	3,438			2,525			110			14,156			9,825			236			136			7,777			9,451

DOMESTIC EQUITY

Harbor Domestic Equity Funds

Financial Highlights

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR CAPITAL APPRECIATION FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	31.02		$	26.81		$	25.21		$	21.04		$	26.40		$	48.16
Income from Investment Operations:
	Net investment income/(loss)		.05			.13			.02	^c		.05	^c		.04			.04
	Net realized and unrealized gains/(losses) on investments		1.94			4.19			1.63			4.16			(5.36	)		(15.63	)

Total from investment operations			1.99			4.32			1.65			4.21			(5.32	)		(15.59	)

Less Distributions:
	Dividends from net investment income		(.03	)		(.11	)		(.05	)		(.04	)		(.04	)		—
	Distributions from net realized capital gains^a		—			—			—			—			—			(6.17	)

Total distributions			(.03	)		(.11	)		(.05	)		(.04	)		(.04	)		(6.17	)

Net asset value end of period			32.98			31.02			26.81			25.21			21.04			26.40
Net assets end of period (000s)		$	8,200,175		$	7,187,988		$	6,497,130		$	6,338,120		$	5,055,492		$	6,020,099

Ratios and Supplemental Data (%):
	Total return		6.42	%^l		16.14	%		6.54	%^d		20.04	%^d		(20.20	)%		(35.23	)%
	Ratio of operating expenses to average net assets^b		.68	^m		.68			.67	^c		.71	^c		.69			.66
	Ratio of operating expenses not imposed to average net assets		—			—			.01			.01			—			—
	Ratio of operating expenses net of all offsets to average net assets		.68	^m		.68			.67	^c		.71	^c		.69			.66
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			.01	^e		—
	Ratio of net investment income/(loss) to average net assets		.31	^m		.44			.09	^c		.24	^c		.16			.15
	Portfolio turnover		34	^l		69			67			64			76			89


HARBOR MID CAP GROWTH FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005^p			2004			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	7.31		$	6.15		$	5.96		$	4.14		$	5.64		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		(.01	)^c		(.03	)^c		—			(.03	)^c		(.06	)^c		—
	Net realized and unrealized gains/(losses) on investments		1.34			1.19			.19			1.85			(1.44	)		(4.36	)

Total from investment operations			1.33			1.16			.19			1.82			(1.50	)		(4.36	)

Less Distributions:
	Dividends from net investment income		—			—			—			—			—			—
	Distributions from net realized capital gains^a		(.85	)		—			—			—			—			—

Total distributions			(.85	)		—			—			—			—			—

Net asset value end of period			7.79			7.31			6.15			5.96			4.14			5.64
Net assets end of period (000s)		$	109,655		$	53,447		$	49,275		$	25,743		$	8,974		$	9,752

Ratios and Supplemental Data (%):
	Total return		19.36	%^d,l		18.86	%^d		3.19	%^d		44.31	%^d		(26.77	)% ^d		(43.60	)% ^d
	Ratio of operating expenses to average net assets^b		.95	^c,m		.95	^c		.98	^c		1.20	^c		1.20	^c		1.20	^c
	Ratio of operating expenses not imposed to average net assets		.22	^m		.20			.14			.58			.31			.53
	Ratio of operating expenses net of all offsets to average net assets		.95	^c,m		.95	^c		.98	^c		1.20	^c		1.20	^c		1.20	^c
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		(.20	)^c,m		(.48	)^c		(.65	)^c		(.95	)^c		(1.11	)^c		(.92	)^c
	Portfolio turnover		66	^l		177			77			114			70			61

See page 62 for notes to the Domestic Equity Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005			2004			2003^f			April 30, 2006			2005			2004			2003^f

	(Unaudited)												(Unaudited)
	$	30.90		$	26.77		$	25.21		$	21.04		$	30.79		$	26.65		$	25.12		$	21.04
		.05			—			—			.04	^c		.01			.05	^c		(.05	)^c		—
		1.89			4.23			1.59			4.17			1.90			4.11			1.58			4.11

		1.94			4.23			1.59			4.21			1.91			4.16			1.53			4.11

		—			(.10	)		(.03	)		(.04	)		—			(.02	)		—			(.03	)
		—			—			—			—			—			—			—			—

		—			(.10	)		(.03	)		(.04	)		—			(.02	)		—			(.03	)

		32.84			30.90			26.77			25.21			32.70			30.79			26.65			25.12
	$	185,146		$	123,018		$	11,775		$	850		$	529,111		$	304,676		$	101,372		$	40,475

		6.28	%^l		15.84	%		6.32	% ^d		20.04	%^d		6.20	%^l		15.62	%		6.09	%^d		19.55	%^d
		.93	^m		.92			.92	^c		.94	^c		1.09	^m		1.10			1.10	^c		1.13	^c
		—			—			.01			.01			—			—			.01			.01
		.93	^m		.92			.92	^c		.94	^c		1.09	^m		1.10			1.10	^c		1.13	^c
		—			—			—			—			—			—			—			—
		.07	^m		(.13	)		(.18	) ^c		(.09	)^c		(.10	)^m		(.10	)		(.35	)^c		(.29	)^c
		34	^l		69			67			64			34	^l		69			67			64


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005^p			2004			2003^f			April 30, 2006			2005^p			2004			2003^f

	(Unaudited)												(Unaudited)
	$	7.31		$	6.15		$	5.96		$	4.14		$	7.28		$	6.15		$	5.96		$	4.14
		(.01	)^c		—			(.04	) ^c		(.02	)^c		(.01	)^c		(.04	)^c		.01	^c		(.02	)^c
		1.33			1.16			.23			1.84			1.32			1.17			.18			1.84

		1.32			1.16			.19			1.82			1.31			1.13			.19			1.82

		—			—			—			—			—			—			—			—
		(.85	)		—			—			—			(.85	)		—			—			—

		(.85	)		—			—			—			(.85	)		—			—			—

		7.78			7.31			6.15			5.96			7.74			7.28			6.15			5.96
	$	76		$	14		$	1		$	6		$	7,166		$	1,737		$	891		$	209

		19.21	%^d,l		18.86	% ^d		3.19	% ^d		44.31	%^d		19.16	%^d,l		18.37	% ^d		3.19	%^d		44.31	%^d
		1.19	^c,m		1.18	^c		1.23	^c		1.40	^c		1.35	^c,m		1.38	^c		1.38	^c		1.40	^c
		.22	^m		.20			.08			.63			.22	^m		.20			.18			.81
		1.19	^c,m		1.18	^c		1.23	^c		1.40	^c		1.35	^c,m		1.38	^c		1.38	^c		1.40	^c
		—			—			—			—			—			—			—			—
		(.46	)^c,m		(.67	)^c		(.90	) ^c		(1.13	)^c		(.69	)^c,m		(.87	)^c		(1.06	) ^c		(1.13	)^c
		66	^l		177			77			114			66	^l		177			77			114

DOMESTIC EQUITY

Harbor Domestic Equity Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR SMALL CAP GROWTH FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003^g			2002			2001

		(Unaudited)
Net asset value beginning of period		$	13.00		$	12.82		$	12.05		$	8.65		$	9.72		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		(.06	)		(.06	)		—			(.04	)^c		(.03	)^c		—
	Net realized and unrealized gains/(losses) on investments		2.75			1.07			.77			3.44			(1.04	)		(.28	)

Total from investment operations			2.69			1.01			.77			3.40			(1.07	)		(.28	)

Less Distributions:
	Dividends from net investment income		—			—			—			—			—			—
	Distributions from net realized capital gains^a		(1.05	)		(.83	)		—			—			—			—

Total distributions			(1.05	)		(.83	)		—			—			—			—

Net asset value end of period			14.64			13.00			12.82			12.05			8.65			9.72
Net assets end of period (000s)		$	725,609		$	635,132		$	709,318		$	631,734		$	103,951		$	17,317

Ratios and Supplemental Data (%):
	Total return		22.09	%^l		7.83	%		6.39	%^d		39.31	%^d		(11.01	)% ^d		(2.80	)% ^d
	Ratio of operating expenses to average net assets^b		.84	^m		.84			.83	^c		.93	^c		.95	^c		1.20	^c
	Ratio of operating expenses not imposed to average net assets		—			—			.02			.02			.08			.63
	Ratio of operating expenses net of all offsets to average net assets		.84	^m		.84			.83	^c		.93	^c		.95	^c		1.20	^c
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		(.36	)^m		(.40	)		(.48	)^c		(.61	)^c		(.71	)^c		(.67	)^c
	Portfolio turnover		28	^l		69			54			83			50			56

HARBOR SMALL COMPANY GROWTH FUND

Institutional Class

Retirement Class

Investor Class

3-Month

Period Ended

April 30, 2006^q

(Unaudited)

Net asset value beginning of period

10.00

Income from Investment Operations:

Net investment income/(loss)

—

(.01

)^c

(.01

)^c

Net realized and unrealized gains/(losses) on investments

.67

Total from investment operations

.67

.66

Less Distributions:

Dividends from net investment income

—

Distributions from net realized capital gains^a

—

Total distributions

—

Net asset value end of period

10.67

10.66

Net assets end of period (000s)

3,107

1,066

1,170

Ratios and Supplemental Data (%):

Total return

6.70

%^d,l

6.60

%^d,l

6.60

%^d,l

Ratio of operating expenses to average net assets ^b

.94

^c,m

1.18

^c,m

1.33

^c,m

Ratio of operating expenses net of all offsets to average net assets

.94

^c,m

1.18

^c,m

1.33

^c,m

Ratio of interest/dividend expenses to average net assets

—

Ratio of net investment income/(loss) to average net assets

(.23

)^c,m

(.23

)^c,m

(.23

)^c,m

Portfolio turnover

See page 62 for notes to the Domestic Equity Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005			2004			2003^f			April 30, 2006			2005			2004			2003^f

	(Unaudited)												(Unaudited)
	$	12.92		$	12.78		$	12.05		$	8.65		$	12.85		$	12.74		$	12.02		$	8.65
		(.04	)		(.07	)		(.02	) ^c		(.02	)^c		(.02	)		(.09	)		.02	^c		(.06	)^c
		2.70			1.04			.75			3.42			2.65			1.03			.70			3.43

		2.66			.97			.73			3.40			2.63			.94			.72			3.37

		—			—			—			—			—			—			—			—
		(1.05	)		(.83	)		—			—			(1.05	)		(.83	)		—			—

		(1.05	)		(.83	)		—			—			(1.05	)		(.83	)		—			—

		14.53			12.92			12.78			12.05			14.43			12.85			12.74			12.02
	$	51,780		$	40,916		$	8,074		$	4,482		$	49,621		$	32,440		$	26,527		$	12,279

		21.99	%^l		7.52	%		6.06	% ^d		39.31	%^d		21.87	%^l		7.31	%		5.90	% ^d		39.08	%^d
		1.09	^m		1.09			1.08	^c		1.16	^c		1.25	^m		1.27			1.25	^c		1.36	^c
		—			—			.01			.02			—			—			.02			.02
		1.09	^m		1.09			1.08	^c		1.16	^c		1.25	^m		1.27			1.25	^c		1.36	^c
		—			—			—			—			—			—			—			—
		(.61	)^m		(.66	)		(.73	) ^c		(.83	)^c		(.77	)^m		(.83	)		(.91	) ^c		(1.03	)^c
		28	^l		69			54			83			28	^l		69			54			83

DOMESTIC EQUITY

Harbor Domestic Equity Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR LARGE CAP VALUE FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002^h			2001

		(Unaudited)
Net asset value beginning of period		$	16.63		$	15.00		$	13.52		$	11.43		$	13.01		$	13.88
Income from Investment Operations:
	Net investment income/(loss)		.11			.16			.14	^c		.11	^c		.10			.24
	Net realized and unrealized gains/(losses) on investments		1.14			1.63			1.45			2.11			(1.63	)		(.68	)

Total from investment operations			1.25			1.79			1.59			2.22			(1.53	)		(.44	)

Less Distributions:
	Dividends from net investment income		(.08	)		(.16	)		(.11	)		(.13	)		(.05	)		(.24	)
	Distributions from net realized capital gains^a		—			—			—			—			—			(.19	)

Total distributions			(.08	)		(.16	)		(.11	)		(.13	)		(.05	)		(.43	)

Net asset value end of period			17.80			16.63			15.00			13.52			11.43			13.01
Net assets end of period (000s)		$	628,562		$	546,624		$	352,917		$	202,159		$	142,063		$	130,029

Ratios and Supplemental Data (%):
	Total return		7.56	%^l		11.90	%		11.79	% ^d		19.56	% ^d		(11.83	)%		(3.20	)%
	Ratio of operating expenses to average net assets^b		.68	^m		.70			.68	^c		.77	^c		.77			.77
	Ratio of operating expenses not imposed to average net assets		—			—			.02			.01			—			—
	Ratio of operating expenses net of all offsets to average net assets		.68	^m		.70			.68	^c		.77	^c		.77			.77
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—			.14	ⁱ
	Ratio of net investment income/(loss) to average net assets		1.35	^m		1.01			1.10			.94	^c		.75			1.64
	Portfolio turnover		9	^l		24			19			25			35			194


HARBOR MID CAP VALUE FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004^j			2003			2002^k

		(Unaudited)
Net asset value beginning of period		$	11.90		$	11.09		$	10.06		$	8.33		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		.08			.14	^c		.02	^c		.01	^c		—
	Net realized and unrealized gains/(losses) on investments		1.27			1.68			1.01			1.72			(1.67	)

Total from investment operations			1.35			1.82			1.03			1.73			(1.67	)

Less Distributions:
	Dividends from net investment income		(.13	)		(.05	)		—			—			—
	Distributions from net realized capital gains^a		(.29	)		(.96	)		—			—			—

Total distributions			(.42	)		(1.01	)		—			—			—

Net asset value end of period			12.83			11.90			11.09			10.06			8.33
Net assets end of period (000s)		$	19,497		$	15,744		$	10,354		$	7,959		$	4,867

Ratios and Supplemental Data (%):
	Total return		11.69	%^d,l		16.92	% ^d		10.36	%^d		20.77	% ^d		(16.70	)% ^d,l
	Ratio of operating expenses to average net assets^b		.95	^c,m		.95	^c		1.02	^c		1.20	^c		1.20	^c,m
	Ratio of operating expenses not imposed to average net assets		.74	^m		.93			1.08			1.15			1.93	^m
	Ratio of operating expenses net of all offsets to average net assets		.95	^c,m		.95	^c		1.02	^c		1.20	^c		1.20	^c,m
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		1.50	^c,m		1.27	^c		.23	^c		.15	^c		(.22	) ^c,m
	Portfolio turnover		10	^l		20			152			67			41	^l

See page 62 for notes to the Domestic Equity Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Retirement Class												Investor Class

6-Month			Year Ended October 31									6-Month			Year Ended October 31
Period Ended												Period Ended
April 30, 2006			2005			2004			2003^f			April 30, 2006			2005			2004			2003^f

(Unaudited)												(Unaudited)
$	16.62		$	14.99		$	13.52		$	11.43		$	16.58		$	14.96		$	13.49		$	11.43
	.08			.14			.08	^c		.15	^c		.08			.07			.10	^c		.10	^c
	1.14			1.61			1.50			2.07			1.13			1.64			1.43			2.07

	1.22			1.75			1.58			2.22			1.21			1.71			1.53			2.17

	(.07	)		(.12	)		(.11	)		(.13	)		(.07	)		(.09	)		(.06	)		(.11	)
	—			—			—			—			—			—			—			—

	(.07	)		(.12	)		(.11	)		(.13	)		(.07	)		(.09	)		(.06	)		(.11	)

	17.77			16.62			14.99			13.52			17.72			16.58			14.96			13.49
$	17,691		$	5,577		$	4,515		$	5		$	250,826		$	162,862		$	16,452		$	6,682

	7.37	%^l		11.66	%		11.69	% ^d		19.56	%^d		7.32	%^l		11.44	%		11.34	% ^d		19.13	%^d
	.93	^m		.95			.92	^c		.93	^c		1.09	^m		1.10			1.10	^c		1.17	^c
	—			—			.03			.01			—			—			.03			.01
	.93	^m		.95			.92	^c		.93	^c		1.09	^m		1.10			1.10	^c		1.17	^c
	—			—			—			—			—			—			—			—
	1.02	^m		.77			.86	^c		.66	^c		.92	^m		.70			.68	^c		.34	^c
	9	^l		24			19			25			9	^l		24			19			25


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005			2004^j			2003^f			April 30, 2006			2005			2004^j			2003^f

	(Unaudited)												(Unaudited)
	$	11.90		$	11.09		$	10.06		$	8.33		$	11.88		$	11.09		$	10.06		$	8.33
		(.07	)^c		.04	^c		.02	^c		—			.08	^c		.07	^c		(.01	)^c		(.01	)^c
		1.41			1.76			1.01			1.73			1.25			1.71			1.04			1.74

		1.34			1.80			1.03			1.73			1.33			1.78			1.03			1.73

		(.13	)		(.04	) ^c		—			—			(.11	)		(.04	)		—			—
		(.29	)		(.95	)		—			—			(.29	)		(.95	)		—			—

		(.42	)		(.99	)		—			—			(.40	)		(.99	)		—			—

		12.82			11.90			11.09			10.06			12.81			11.88			11.09			10.06
	$	29		$	81		$	2		$	—		$	3,024		$	1,612		$	268		$	46

		11.52	%^d,l		16.88	% ^d		10.36	%^d		20.77	%^d		11.44	%^d,l		16.65	% ^d		10.24	%^d		20.77	%^d
		1.20	^c,m		1.18	^c		—	^o		—	^o		1.36	^c,m		1.38	^c		1.39	^c		1.39	^c
		.74	^m		.93			—			—			.74	^m		.93			1.53			1.38
		1.20	^c,m		1.18	^c		—	^o		—	^o		1.36	^c,m		1.38	^c		1.39	^c		1.39	^c
		—			—			—			—			—			—			—
		1.35	^c,m		.96	^c		—	^o		—	^o		1.05	^c,m		.88	^c		(.15	)^c		(.16	)^c
		10	^l		20			152			67			10	^l		20			152			67

DOMESTIC EQUITY

Harbor Domestic Equity Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR SMALL CAP VALUE FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002ⁿ

		(Unaudited)
Net asset value beginning of period		$	19.50		$	16.58		$	13.88		$	9.99		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		.02			.01			—			(.01	)^c		(.02	)^c
	Net realized and unrealized gains/(losses) on investments		2.78			3.00			2.70			3.90			.01

Total from investment operations			2.80			3.01			2.70			3.89			(.01	)

Less Distributions:
	Dividends from net investment income		(.02	)		—			—			—			—
	Distributions from net realized capital gains^a		(.31	)		(.09	)		—			—			—

Total distributions			(.33	)		(.09	)		—			—			—

Net asset value end of period			21.97			19.50			16.58			13.88			9.99
Net assets end of period (000s)		$	2,106,041		$	1,592,120		$	449,467		$	159,380		$	14,906

Ratios and Supplemental Data (%):
	Total return		14.53	%^l		18.22	%		19.45	% ^d		38.94	% ^d		(.10	)% ^d,l
	Ratio of operating expenses to average net assets^b		.83	^m		.83			.84	^c		.94	^c		1.20	^c,m
	Ratio of operating expenses not imposed to average net assets		—			—			.01			.30			.90	^m
	Ratio of operating expenses net of all offsets to average net assets		.83	^m		.83			.84	^c		.94	^c		1.20	^c,m
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		.22	^m		.13			(.13	)^c		(.25	)^c		(.46	) ^c,m
	Portfolio turnover		14^l			20			12			13			20	^l


a	Includes both short-term and long-term capital gains.

b	Percentage does not reflect reduction for credit balance arrangements from custodian. (See Note 4 to Financial Statements).

c	Reflects the Adviser’s waiver of a portion of its management fees and/or other operating expenses.

d	The total returns would have been lower had certain expenses not been waived during the periods shown.

e	Interest expense for swap agreements.

f	Commenced operations on November 1, 2002.

g	After the close of business on October 31, 2002, the former Harbor Small Cap Growth Fund was merged with and into Harbor Growth Fund. The accounting survivor of the merger is the former Harbor Small Cap Growth Fund. Effective November 1, 2002, Harbor Growth Fund changed its name to Harbor Small Cap Growth Fund.

h	Effective September 20, 2001, Harbor Value Fund changed its name to Harbor Large Cap Value Fund and appointed Armstrong Shaw Associates Inc. as its Subadviser.

i	Dividend expense for investments sold short.

j	Effective September 30, 2004, Harbor Mid Cap Value Fund appointed LSV Asset Management as its Subadviser.

k	Commenced operations on March 1, 2002.

l	Unannualized.

m	Annualized.

n	Commenced operations on December 14, 2001.

o	Assets in this class were too small to incur any income or expense.

p	Effective September 20, 2005, Harbor Mid Cap Growth Fund appointed Wellington Management Company, LLP as its Subadviser.

q	Commenced operations on February 1, 2006.

The accompanying notes are an integral part of the financial statements.

DOMESTIC EQUITY


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005			2004			2003^f			April 30, 2006			2005			2004			2003^f

	(Unaudited)												(Unaudited)
	$	19.46		$	16.57		$	13.88		$	9.99		$	19.33		$	16.50		$	13.87		$	9.99
		.01			(.01	)		.02	^c		(.02	)^c		(.04	)		(.01	)		—			(.02	)^c
		2.76			2.99			2.67			3.91			2.77			2.93			2.63			3.90

		2.77			2.98			2.69			3.89			2.73			2.92			2.63			3.88

		—			—			—			—			—			—			—			—
		(.31	)		(.09	)		—			—			(.31	)		(.09	)		—			—

		(.31	)		(.09	)		—			—			(.31	)		(.09	)		—			—

		21.92			19.46			16.57			13.88			21.75			19.33			16.50			13.87
	$	65,951		$	36,787		$	1,911		$	3		$	169,182		$	182,697		$	23,987		$	1,290

		14.39	%^l		18.05	%		19.38	% ^d		38.94	%^d		14.28	%^l		17.76	%		18.96	% ^d		38.84	%^d
		1.08	^m		1.08			.93	^c		1.18	^c		1.25	^m		1.26			1.25	^c		1.29	^c
		—			—			.01			.30			—			—			.01			.30
		1.08	^m		1.08			.93	^c		1.18	^c		1.25	^m		1.26			1.25	^c		1.29	^c
		—			—			—			—			—			—			—			—
		(.01	)^m		(.08	)		(.24	) ^c		(.59	)^c		(.21	)^m		(.27	)		(.53	) ^c		(.57	)^c
		14^l			20			12			13			14^l			20			12			13

DOMESTIC EQUITY

Harbor International Equity Funds

Harbor International Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Northern Cross Investments

Limited

Clarendon House

2 Church Street

Hamilton, Bermuda HMDX

Hakan Castegren

Portfolio Manager (since 1987)

Northern Cross has subadvised the Fund since its inception in 1987.

INVESTMENT GOAL

Long-term total return, principally from growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

International large cap value oriented stocks.

TOP TEN HOLDINGS (% of net assets)


ABB Ltd.	2.9	%
BHP Billiton	2.9
Petroleo Brasileiro SA — PETROBRAS	2.6
Continental AG	2.5
Statoil ASA	2.1
Linde AG	1.9
Compagnie Financiere Richemont AG Cl. A	1.9
Canon Inc.	1.9
ORIX Corp.	1.9
Banco Bradesco SA	1.8

REGION BREAKDOWN

FUND CATEGORY

TOP 10 COUNTRIES (% of net assets)


Japan	16.1	%
United Kingdom	13.3
France	12.6
Switzerland	12.2
Germany	8.5
Brazil	7.3
Malaysia	3.9
Sweden	3.8
Australia	2.9
Singapore	2.4

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

Foreign stock markets around the world posted excellent returns for the six months ended April 30, 2006. The MSCI EAFE^® Index of international stocks gained 22.89% in U.S. dollar terms. By comparison, the Dow Jones Wilshire 5000 Index of the broad U.S. stock market rose 11.02%.

Companies across a wide range of industries and geographical areas took part in the rally. Nine of the 10 economic sectors in the MSCI EAFE^® Index had double-digit returns, led by the materials sector, which rose 35%. Stocks in five other sectors had returns greater than 20%. The telecommunications services group was up 1% and was the worst-performing sector. Participation also was widespread on a geographical basis, as stocks in 17 of the 21 country groups represented in the index had average returns in excess of 20%.

Performance

The Harbor International Fund returned 29.77% (Institutional Class), 29.48% (Investor Class), and 29.62% (Retirement Class) in U.S. dollar terms for the six months ended April 30, 2006, outpacing the MSCI EAFE^® Index by more than 6 percentage points. For the 12 months ended April 30, 2006, the Fund returned 47.43% (Institutional Class), 46.76% (Investor Class), and 47.05% (Retirement Class), compared to 33.49% for the index. The Fund also outperformed the benchmark for the latest five-year and 10-year periods.

Many foreign currencies strengthened against the U.S. dollar during the fiscal half-year, and this enhanced international equity returns expressed in dollars. The weakness of the dollar improved MSCI EAFE^® Index returns by about 4 percentage points and added about 5 percentage points to Fund returns.

The Fund’s performance was distinguished by solid gains across a broad spectrum of industries and economic sectors. Stocks in the industrials sector were the best performers for the Fund, with a combined return of 46%. Materials, consumer discretionary, energy, and financial services holdings also performed well, with returns of more than 30% in each of those sectors. The worst-performing area in the portfolio was telecommunications services, which was up 4%.

INTERNATIONAL EQUITY

Harbor International Fund

MANAGER’S COMMENTARY—Continued

The four largest holdings in the portfolio—ABB Ltd., BHP Billiton, Petroleo Brasileiro SA, and Continental AG—were also the top four contributors to performance for the fiscal half-year. Each added over one percentage point to Fund returns. ABB, the Swiss/Swedish engineering company involved in power transmission systems and robotics, was up 86%. It has continued to benefit from a restructuring program eliminating non-core businesses as well as from growth opportunities from development and improvement of electrical power grids in China and other countries. BHP Billiton, the Australian metals and mining company, was up 41%, and Petroleo Brasileiro, the Brazilian oil and gas company, gained 59%. These two long-term holdings highlighted the Fund’s continued success from above-benchmark positions in the materials and energy sectors. Shares of Continental, the German producer of automotive products, rose 56%. Continental reported increased demand from automakers for its tires, brake systems, and vehicle electronics.

Stock selection in the financial services sector was a major contributor to the Fund’s returns as well as to its outperformance of the benchmark. Financial stocks in the portfolio returned 34% compared with 27% for those in the index. Leading contributors for the Fund included ORIX, a Japanese leasing company, whose shares rose 61%, and Banco Bradesco in Brazil, which was up 51%. Financial services stocks represented about 29% of both the Fund and the index and constituted the largest sector weight in both. Stock selection and above-benchmark weights in the materials, consumer discretionary, and energy sectors also made important contributions to both absolute and relative performance for the Fund.

Fund returns also benefited from the absence from the portfolio of stocks experiencing significant price declines. The largest detractor from performance was Vodafone, which was down 12% while held by the Fund. It reduced overall returns by 29 basis points. Vodafone continued to be a troubled stock, and we sold the shares during an upswing in the share price after the announcement of the sale of its Japanese subsidiary.

Outlook and Strategy

Sector and country-level allocations in the portfolio as of April 30, 2006, were similar to those at the end of the fiscal year on October 31, 2005. The Fund’s largest economic sector allocations were in financial services, materials, consumer discretionary, and energy. Compared with the MSCI EAFE^® Index, the largest overweighted positions in the portfolio were in materials and energy, while the most significant underweights were in health care and telecommunications. The largest country-level allocations were in Japan, United Kingdom, France, and Switzerland. Compared with the index, the largest overweights were in Brazil and Switzerland, while the most significantly underweighted country positions were in Japan and the United Kingdom.

Indications of continued worldwide growth, with China leading the way, provide a favorable economic backdrop for world stock markets. We expect China’s need for raw materials to continue, although we are monitoring that situation closely. We believe that positive trends such as loan growth in Japan and favorable inflation data in Germany could prove to be indicators of good growth prospects in those countries. Interest rates in Brazil have continued to fall, and we expect further good performance from our investments in Brazilian resource companies. Although the outlook remains generally favorable, we continue to follow closely the implementation of monetary policy in the U.S. because of its potential implications for the global economic environment. A specific concern is that over-tightening by the Federal Reserve could lead to a recession in the U.S., which in turn could result in a slowing of worldwide economic activity.

This report contains the current opinions of the manager and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Such opinions are subject to change without notice and securities described herein may no longer be included in or may at any time be removed from, the Fund’s portfolio. This report is distributed for informational purposes only. Information contained herein has been obtained from sources believed reliable, but not guaranteed.

Investing in international and emerging markets poses special risks, including potentially greater price volatility due to social, political and economic factors, as well as currency exchange rate fluctuations. These risks are more severe for securities of issuers in emerging market regions. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

INTERNATIONAL EQUITY

Harbor International Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 011

Cusip: 411511306

Ticker: HAINX

Inception Date: 12-29-1987

RETIREMENT CLASS

Fund #: 211

Cusip: 411511652

Ticker: HRINX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 411

Cusip: 411511645

Ticker: HIINX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	90		1,135
Number of Countries	20		21
Total Net Assets (000s)	$15,316,555		N/A
Weighted Average Market Cap ($MM)	$52,150.0		$57,070.0
Price/Earnings Ratio (P/E)	19.9x		21.9x
Price/Book Ratio (P/B)	3.3x		3.5x
Beta vs MSCI EAFE^® Index	1.1		1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	5%		N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the MSCI EAFE^® Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor International Fund

	Institutional Class		29.77	%		47.43	%		15.93	%		12.79	%	$	33,309
	Retirement Class		29.62			47.05			15.65			12.51			32,508
	Investor Class		29.48			46.76			15.44			12.31			31,921

Comparative Index

	MSCI EAFE^®		22.89	%		33.49	%		9.18	%		6.68	%	$	19,090

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. The Fund has a redemption fee of 2.00% against shares that are held for less than 60 days. The performance of the Retirement and Investor Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the respective class.

INTERNATIONAL EQUITY

Harbor International Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.86%

Total Net Assets (000s):

$14,477,871

RETIREMENT CLASS

Expense Ratio: 1.11%

Total Net Assets (000s):

$129,982

INVESTOR CLASS

Expense Ratio: 1.26%

Total Net Assets (000s):

$708,702

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,297.72	$	4.89
Hypothetical (5% return)		1,000.00		1,020.43		4.31

Retirement Class
Actual	$	1,000.00	$	1,296.17	$	6.31
Hypothetical (5% return)		1,000.00		1,019.19		5.56

Investor Class
Actual	$	1,000.00	$	1,294.80	$	7.17
Hypothetical (5% return)		1,000.00		1,018.44		6.31


*	Expenses are equal to the Fund annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

INTERNATIONAL EQUITY

Harbor International Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings by Country (% of net assets)

(Excludes net cash and short-term investments of 2.9%)


Japan (JP)		16.1
United Kingdom (UK)		13.3
France (FR)		12.6
Switzerland (SWS)		12.2
Germany (GER)		8.5
Brazil (BR)		7.3
Malaysia (MAL)		3.9
Sweden (SW)		3.8
Australia (AUS)		2.9
Singapore (SGP)		2.4
Norway (NOR)		2.1
Finland (FIN)		2.0
Italy (IT)		1.9
Spain (SP)		1.9
Denmark (DEN)		1.7
China (CHN)		1.5
Netherlands (NET)		1.3
Hong Kong (HK)		0.7
South Africa (S. AFR)		0.6
India (IND)		0.4


COMMON STOCKS—91.0%
			Value
Shares			(000s)

AIR FREIGHT & LOGISTICS—0.1%
	715,000	Deutsche Post AG (GER)	$	19,067

AUTO COMPONENTS—3.8%
	3,222,000	Continental AG (GER)		383,569
	2,762,345	Michelin (CGDE) Cl. B (FR)		199,236

				582,805

AUTOMOBILES—2.3%
	2,181,700	Peugeot SA (FR)		143,344
	3,667,000	Toyota Motor Corp. (JP)		214,222

				357,566

BEVERAGES—1.7%
	15,675,901	Diageo plc (UK)		257,781

BUILDING PRODUCTS—2.9%
	15,125,000	Asahi Glass Co. Ltd. (JP)		213,385
	3,003,724	Compagnie de Saint-Gobain (FR)		225,377

				438,762

CAPITAL MARKETS—3.1%
	10,069,000	Nomura Holdings Inc. (JP)		227,434
	2,077,188	UBS AG—Registered (SWS)		243,785

				471,219

CHEMICALS—2.4%
	3,285,700	Linde AG (GER)		294,102
	2,317,638	The BOC Group plc (UK)		65,671

				359,773

COMMERCIAL BANKS—14.4%
	3,175,000	Banco Popolare di Verona e Novara S.c.r.l. (IT)		89,375
	16,599,534	Banco Santander Central Hispano SA—Registered (SP)		256,240
	18,691,000	Bank of Yokohama Ltd. (JP)		146,094
	5,465,000	Commerzbank AG (GER)		226,588
	5,917,977	Credit Agricole SA (FR)		238,245
	18,065,000	DBS Group Holdings Ltd. (SGP)		203,349
	6,200,000	HSBC Holdings plc (UK)		106,981
	54,100,000	Malayan Banking Berhad (MAL)		165,691
	12,000	Mitsubishi Tokyo Financial Group Inc. (JP)		187,610
	9,459,358	Standard Chartered plc (UK)		250,166
	15,700,000	Sumitomo Trust and Banking Co. Ltd. (JP)		166,545
	15,674,842	United Overseas Bank Ltd. (SGP)		161,677

				2,198,561

COMMUNICATIONS EQUIPMENT—1.6%
	484,360	Ericsson (LM) Tel Ab Cl. B ADR (SW)¹*		17,181
	64,906,218	Ericsson (LM) Tel Ab Series B (SW)*		230,351

				247,532

CONSTRUCTION MATERIALS—1.6%
	2,940,000	Holcim Ltd.— Registered (SWS)		246,638

CONSUMER FINANCE—1.9%
	970,000	ORIX Corp. (JP)		291,562

DIVERSIFIED FINANCIAL SERVICES—2.8%
	4,671,007	ING Groep NV (NET)		190,585
	12,025,000	Investor Ab Cl. B (SW)		235,403

				425,988

DIVERSIFIED TELECOMMUNICATION SERVICES—1.1%
	1,900,600	Telefonica SA (SP)		30,432
	49,000,000	Telekom Malaysia Berhad (MAL)		131,756

				162,188

ELECTRICAL EQUIPMENT—2.9%
	31,400,000	ABB Ltd. (SWS)*		447,542

ELECTRONIC EQUIPMENT & INSTRUMENTS—1.3%
	4,840,000	Hoya Corp. (JP)		195,493

FOOD PRODUCTS—2.3%
	10,950,000	Cadbury Schweppes plc (UK)		108,005
	787,000	Nestle SA—Registered (SWS)		239,941

				347,946

HOTELS, RESTAURANTS & LEISURE—3.1%
	3,910,357	Accor SA (FR)		246,000
	21,900,000	Genting Berhad (MAL)		154,011
	22,200,000	Resorts World Berhad (MAL)		82,025

				482,036

HOUSEHOLD DURABLES—0.9%
	2,848,300	Sony Corp. (JP)		139,272

INDUSTRIAL CONGLOMERATES—0.4%
	38,500,000	Sime Darby Berhad (MAL)		64,251

INSURANCE—4.0%
	1,250,000	Allianz AG—Registered (GER)		209,128
	6,148,956	AXA SA (FR)		225,146
	1,245,000	Munchener Ruckversicherungs-Gesellschaft AG (Munich Re)—Registered (GER)		176,273

				610,547

LEISURE EQUIPMENT & PRODUCTS—1.1%
	8,925,000	Nikon Corp. (JP)		175,295

INTERNATIONAL EQUITY

Harbor International Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

MACHINERY—2.0%
	3,335,000	Atlas Copco Ab Series A (SW)	$	98,614
	2,268,000	Fanuc Ltd. (JP)		214,372

				312,986

MEDIA—2.0%
	5,195,000	JCDecaux SA (FR)*		155,428
	3,440,000	Publicis Groupe SA (FR)		142,972

				298,400

METALS & MINING—6.5%
	2,069,574	Anglo American plc (UK)		88,522
	9,587,480	Anglo American plc ADR (UK)¹		206,610
	1,768,000	AngloGold Ashanti Ltd. ADR (S. AFR)¹		96,674
	21,325,484	BHP Billiton (AUS)		438,578
	2,861,657	Rio Tinto plc—Registered (UK)		157,786

				988,170

OFFICE ELECTRONICS—1.9%
	3,865,000	Canon Inc. (JP)		293,647

OIL, GAS & CONSUMABLE FUELS—10.4%
	16,233,662	BG Group plc (UK)		216,302
	19,527,429	BP plc (UK)		238,704
	358,000,000	China Petroleum & Chemical Corp (Sinopec Corp.) (CHN)		229,044
	6,687,700	Eni SpA (IT)		204,654
	603,932	Royal Dutch Shell plc Cl. A (UK)		20,584
	25,285	Royal Dutch Shell plc Cl. A (NET)		865
	2,365,000	Royal Dutch Shell plc Cl. A ADR (UK)¹		161,128
	9,595,000	Statoil ASA (NOR)		314,338
	772,744	Total SA Series B (FR)		213,253

				1,598,872

PAPER & FOREST PRODUCTS—3.2%
	3,440,000	Aracruz Celulose SA ADR (BR)¹		189,475
	4,775,000	Stora Enso Oyj (FIN)		74,710
	9,955,000	UPM-Kymmene Corp. (FIN)		233,109

				497,294

PERSONAL PRODUCTS—1.0%
	1,575,000	L’Oreal SA (FR)		145,980

PHARMACEUTICALS—4.3%
	3,626,690	Novartis AG—Registered (SWS)		207,862
	4,088,100	Novo Nordisk A/S Series B (DEN)		264,012
	1,190,000	Roche Holding Ltd. (SWS)		182,633

				654,507

REAL ESTATE—0.0%
	1,457,484	United Overseas Land Ltd. (SGP)		2,827

TEXTILES, APPAREL & LUXURY GOODS—1.9%
	5,670,800	Compagnie Financiere Richemont AG Cl. A (SWS)		293,736

THRIFTS & MORTGAGE FINANCE—0.4%
	1,905,000	Housing Development Finance Corp. (IND)		54,787

TOBACCO—1.0%
	6,031,425	British American Tobacco plc (UK)		153,684

WIRELESS TELECOMMUNICATION SERVICES—0.7%
	19,525,000	China Mobile (Hong Kong) Ltd. (HK)		112,962
	45,069	China Mobile (Hong Kong) Ltd. ADR (HK)¹		1,301

				114,263

TOTAL COMMON STOCKS (Cost $7,603,714)				13,930,977


PREFERRED STOCKS—6.1%
COMMERCIAL BANKS—1.8%
	7,340,376	Banco Bradesco SA (BR)	279,968

METALS & MINING—1.7%
	5,724,000	Companhia Vale do Rio Doce Cl. A (BR)	253,699

OIL, GAS & CONSUMABLE FUELS—2.6%
	18,081,000	Petroleo Brasileiro SA — PETROBRAS (BR)	400,520

TOTAL PREFERRED STOCKS (Cost $130,631)			934,187


SHORT-TERM INVESTMENTS—2.5%
Principal
Amount
(000s)

COMMERCIAL PAPER
		American Express Credit Corp. Yrs. 3&4
$	45,000		4.650%—05/01/2006		45,000
	41,094		4.680%—05/03/2006		41,094
	33,802		4.770%—05/04/2006		33,802

					119,896

		Citigroup Funding Inc.
	33,803		4.750%—05/08/2006		33,803
	41,094		4.760%—05/02/2006		41,094

					74,897

		General Electric Capital Corp.
	39,840		4.650%—05/01/2006		39,840
	39,841		4.740%—05/03/2006		39,841
	41,094		4.750%—05/04/2006		41,094

					120,775

		Prudential Funding Corp.
	39,840		4.650%—05/02/2006		39,840
	33,802		4.760%—05/05/2006		33,802

					73,642

TOTAL SHORT-TERM INVESTMENTS (Cost $389,210)					389,210

TOTAL INVESTMENTS—99.6% (Cost $8,123,555)					15,254,374

CASH AND OTHER ASSETS, LESS LIABILITIES—0.4%					62,181

TOTAL NET ASSETS—100.0%				$	15,316,555


1	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Growth Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Marsico Capital

Management, LLC

1200 17th Street

Suite 1600

Denver, CO 80202

James Gendelman

Portfolio Manager (since 2004)

Marsico has subadvised the Fund since March 1, 2004.

INVESTMENT GOAL

Long-term growth of capital.

PRINCIPAL STYLE CHARACTERISTICS

Foreign companies selected for long-term growth potential.

TOP TEN HOLDINGS (% of net assets)


America Movil SA de C.V. Series L ADR	4.2	%
UBS AG—Registered	4.1
CEMEX SA de C.V. ADR	3.9
Continental AG	3.9
Vallourec SA	3.2
Talisman Energy Inc.	3.1
ABB Ltd.	3.0
Hypo Real Estate Holding AG	3.0
Veolia Environnement SA	2.6
Marubeni Corp.	2.5

REGION BREAKDOWN

FUND CATEGORY

TOP 10 COUNTRIES (% of net assets)


Japan	20.7	%
Switzerland	14.1
United Kingdom	9.6
France	9.1
Mexico	8.1
Canada	7.9
Germany	7.9
Hong Kong	3.9
Brazil	3.5
Australia	2.2

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

International stocks in both developed and emerging markets posted strong gains for the six months ended April 30, 2006, substantially outperforming their U.S. equity counterparts. Equity market returns in developed countries, as measured by the performance of the MSCI EAFE^® Index, totaled 22.89%, more than twice that of U.S. large capitalization stocks, as measured by the performance of the S&P 500 Index, which was up 9.64%.

From an economic sector perspective, international equity market strength was powerful and widespread. All 10 sectors in the MSCI EAFE^® Growth Index had gains, including seven—materials, industrials, information technology, financials, consumer discretionary, utilities, and energy—that were in excess of 20%. Telecommunications services, which posted a modest increase of 1%, was the lowest-performing sector. International growth equity returns modestly trailed their value-oriented counterparts.

Performance

The Harbor International Growth Fund outperformed its benchmark by a substantial margin. The Fund returned 29.61% (Institutional Class), 29.40% (Investor Class), and 29.40% (Retirement Class) in U.S. dollar terms, while the MSCI EAFE^® Growth Index had a total return of 22.26%.

Several factors emerged as significant positive contributors to the Fund’s performance:


•	Stock Selection and Positioning in the Telecommunications Services Sector. America Movil SA, a mobile telecommunications provider in Latin America, was among the best performing stocks in the portfolio, with a return of 41%. As telecommunications was the weakest-performing area in the index, our decision to have a below-benchmark posture also added value.

•	Stock Selection in the Consumer Discretionary Sector. The Fund’s consumer discretionary holdings had an aggregate return of 34%. Performance benefited from several industry groups within this sector. In the automobiles & components group, positions in Continental AG (up 56%), the German auto-components company, and Toyota, the Japanese car manufacturer,

INTERNATIONAL EQUITY

Harbor International Growth Fund

MANAGER’S COMMENTARY—Continued


	helped boost the Fund’s overall return. In retailing, Yamada Denki, a Japan-headquartered consumer electronics retailer, rose 25% and in specialty retailing, Carphone Warehouse, a UK-based provider of mobile communications products and services, gained 77%, British pub and restaurant operator Enterprise Inns plc rose 25%. In the media group, JCDecaux SA, an outdoor advertising company headquartered in France, rose 46%.

•	Stock Selection in the Industrials Sector. Industrial companies were among the Fund’s strongest-performing individual holdings. These included Vallourec SA (up 91%), a French-based manufacturer of carbon steel and low alloy tubes; Swiss power and automation company ABB Ltd (up 28%); Canadian National Railway (up 25%); and VINCI SA (up 29% prior to being sold), a construction contractor and infrastructure concessions operator based in France.

•	Stock Selection in the Financials Sector. Swiss bank UBS AG posted a return of 42%. Stock selection in the real estate industry also was strong, led by positions that included Germany-based Hypo Real Estate (up 45%), Japan-based Sumitomo Realty & Development Co. (up 65%), and Singapore-based real estate developer and management company CapitaLand Ltd. (up 65%).

•	Stock Selection in the Energy Sector. The MSCI EAFE^® Growth Index’s energy sector posted a return of 21%, while the Fund’s energy-related investments had an aggregate gain of 32%. Petroleo Brasileiro SA (up 56%), a Brazilian integrated oil and gas company, Canadian oil and gas exploration and production company Talisman Energy (up 27%), and Acergy SA (up 56%), a provider of a variety of services to sub-sea oil and gas operations, all posted strong results.

Although the Fund’s overall return exceeded its benchmark by a considerable margin, a few factors had negative effects on investment results. Overall, the Fund’s investments in the materials sector generated a strong return of 23%; however, that lagged the index sector return of 36%. In particular, two of the Fund’s materials-related positions struggled. Cia Vale do Rio Doce, a Brazilian mining and logistics company, and Swiss chemicals company Syngenta declined by 13% and 4%, respectively. Cia Vale do Rio Doce was not held in the Fund as of April 30, 2006. In addition, Japanese supermarket and department store operator Seiyu and fashion company Esprit Holdings were among the Fund’s weakest performing individual positions.

Outlook and Strategy

As of April 30, 2006, the largest economic sector allocations in the portfolio included financials, consumer discretionary, industrials and materials. The Fund generally maintained underweighted postures, relative to its benchmark, in materials, health care, industrials, telecommunications services, and utilities.

We continue to focus on identifying companies with attributes such as improving profitability, market share leadership, improving free cash flow generation, strong balance sheets, high-quality management teams, and equity valuations that we believe are reasonable in the context of projected earnings growth rates. We believe companies with these types of attributes offer compelling long-term growth potential.

You should consider the Fund’s investment objective, risk, and fees and expenses carefully before investing. For this and other important information, obtain a Harbor Fund prospectus by calling 1-800-422-1050 or visiting www.harborfund.com. You should read the prospectus carefully before investing.

INTERNATIONAL EQUITY

Harbor International Growth Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 017

Cusip: 411511801

Ticker: HAIGX

Inception Date: 11-01-1993

RETIREMENT CLASS

Fund #: 217

Cusip: 411511637

Ticker: HRIGX

Inception Date: 11-01-2002

INVESTOR CLASS

Fund #: 417

Cusip: 411511629

Ticker: HIIGX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio			Benchmark

Number of Holdings		54			678
Number of Countries		17			21
Total Net Assets (000s)	$	244,638			N/A
Weighted Average Market Cap ($MM)	$	39,680.0			$54,330.0
Price/Earnings Ratio (P/E)		25.2x			25.9x
Price/Book Ratio (P/B)		4.5x			4.7x
Beta vs MSCI EAFE^® Growth Index		1.1			1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)		55	%		N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the MSCI EAFE^® Growth Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor International Growth Fund

	Institutional Class		29.61	%		45.91	%		1.14	%		1.83	%	$	11,989
	Retirement Class		29.40			45.35			0.97			1.62			11,739
	Investor Class		29.40			45.20			0.83			1.45			11,553

Comparative Index

	MSCI EAFE^® Growth		22.26	%		32.82	%		7.06	%		4.15	%	$	15,013

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. The Fund has a redemption fee of 2.00% against shares that are held for less than 60 days. The performance of the Retirement and Investor Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the respective class.

INTERNATIONAL EQUITY

Harbor International Growth Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.95%

Total Net Assets (000s):

$225,461

RETIREMENT CLASS

Expense Ratio: 1.20%

Total Net Assets (000s):

$93

INVESTOR CLASS

Expense Ratio: 1.36%

Total Net Assets (000s):

$19,084

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,296.11	$	5.41
Hypothetical (5% return)		1,000.00		1,019.98		4.76

Retirement Class
Actual	$	1,000.00	$	1,293.97	$	6.82
Hypothetical (5% return)		1,000.00		1,018.74		6.01

Investor Class
Actual	$	1,000.00	$	1,293.96	$	7.73
Hypothetical (5% return)		1,000.00		1,017.80		6.95


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

INTERNATIONAL EQUITY

Harbor International Growth Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Equity Holdings by Country (% of net assets)

(Excludes net cash and short-term investments of 2.5%)


Japan (JP)		20.7
Switzerland (SWS)		14.1
United Kingdom (UK)		9.6
France (FR)		9.1
Mexico (MEX)		8.1
Canada (CAN)		7.9
Germany (GER)		7.9
Hong Kong (HK)		3.9
Brazil (BR)		3.5
Australia (AUS)		2.2
South Korea (S. KOR)		2.1
Austria (AUT)		2.0
India (IND)		1.5
Singapore (SGP)		1.5
Norway (NOR)		1.4
Ireland (IE)		1.0
Sweden (SW)		1.0


COMMON STOCKS—97.5%
			Value
Shares			(000s)

AEROSPACE & DEFENSE—1.0%
	322,536	BAE SYSTEMS plc (UK)	$	2,447

AUTO COMPONENTS—3.9%
	80,269	Continental AG (GER)		9,556

AUTOMOBILES—2.5%
	102,600	Toyota Motor Corp. (JP)		5,994

BEVERAGES—2.0%
	304,393	Diageo plc (UK)		5,006

BIOTECHNOLOGY—1.2%
	68,726	CSL Ltd. (AUS)		3,001

CAPITAL MARKETS—4.1%
	85,072	UBS AG—Registered (SWS)		9,984

CHEMICALS—5.0%
	87,541	Lonza Group Ltd.—Registered (SWS)		6,209
	43,568	Syngenta AG—Registered (SWS)		6,055

				12,264

COMMERCIAL BANKS—8.3%
	143,578	Anglo Irish Bank Corporation plc (IE)		2,359
	63,785	Erste Bank der oesterreichischen Sparkassen AG (AUT)		3,871
	15,810	Erste Bank der oesterreichischen Sparkassen AG (AUT)¹		948
	133,382	ICICI Bank Ltd. ADR (IND)²		3,659
	373	Mitsubishi Tokyo Financial Group Inc. (JP)		5,831
	44,740	Unibanco Holdings SA GDR (BR)³		3,550

				20,218

COMMUNICATIONS EQUIPMENT—1.0%
	68,626	Ericsson (LM) Tel Ab Cl. B ADR (SW)²*		2,434

CONSTRUCTION MATERIALS—3.9%
	141,668	CEMEX SA de C.V. ADR (MEX)²		9,565

CONSUMER FINANCE—1.4%
	65,100	Credit Saison Co. Ltd. (JP)		3,417

ELECTRICAL EQUIPMENT—3.0%
	517,433	ABB Ltd. (SWS)*		7,375

ELECTRONIC EQUIPMENT & INSTRUMENTS—3.0%
	44,100	Murata Manufacturing Co. Ltd. (JP)		3,204
	186,000	Nippon Electric Glass Co. Ltd. (JP)		4,168

				7,372

ENERGY EQUIPMENT & SERVICES—1.4%
	216,798	Acergy SA (NOR)*		3,534

FOOD & STAPLES RETAILING—4.7%
	44,889	METRO AG (GER)		2,545
	142,402	Shoppers Drug Mart Corp. (CAN)		5,642
	1,367,000	The SEIYU Ltd. (JP)		3,356

				11,543

HOTELS, RESTAURANTS & LEISURE—2.7%
	174,820	Enterprise Inns plc (UK)		2,973
	2,078,000	Shangri-La Asia Ltd. (HK)		3,684

				6,657

HOUSEHOLD DURABLES—1.2%
	114,522	Gafisa SA (BR)		1,169
	35,600	Misawa Homes Holdings Inc. (JP)		1,874

				3,043

HOUSEHOLD PRODUCTS—2.3%
	152,584	Reckitt Benckiser plc (UK)		5,557

LEISURE EQUIPMENT & PRODUCTS—1.9%
	117,462	Sega Sammy Holdings Inc. (JP)		4,672

MACHINERY—4.1%
	23,378	Fanuc Ltd. (JP)		2,210
	5,943	Vallourec SA (FR)		7,729

				9,939

MEDIA—1.0%
	84,087	JCDecaux SA (FR)*		2,516

METALS & MINING—1.0%
	120,669	BHP Billiton (AUS)		2,482

MULTI-UTILITIES—2.6%
	104,581	Veolia Environnement SA (FR)		6,250

OIL, GAS & CONSUMABLE FUELS—7.2%
	301,409	BP plc (UK)		3,684
	29,196	CNOOC Ltd. ADR (HK)²		2,414
	39,321	Petroleo Brasileiro SA—PETROBRAS ADR (BR)²		3,886
	135,581	Talisman Energy Inc. (CAN)		7,657

				17,641

PHARMACEUTICALS—2.5%
	43,228	GlaxoSmithKline plc (UK)		1,224
	32,151	Roche Holding Ltd. (SWS)		4,934

				6,158

REAL ESTATE—3.7%
	1,140,000	CapitaLand Ltd. (SGP)		3,539
	80,096	Leopalace21 Corp. (JP)		3,111
	87,000	Sumitomo Realty & Development Co. Ltd. (JP)		2,302

				8,952

ROAD & RAIL—2.5%
	135,477	Canadian National Railway Co. (CAN)		6,084

INTERNATIONAL EQUITY

Harbor International Growth Fund

PORTFOLIO OF INVESTMENTS—Continued


COMMON STOCKS—Continued
			Value
Shares			(000s)

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT—2.1%
	7,400	Samsung Electronics Co. Ltd. (S. KOR)	$	5,050

SPECIALTY RETAIL—4.3%
	432,207	Carphone Warehouse Group plc (UK)		2,626
	438,500	Esprit Holdings Ltd. (HK)		3,512
	39,200	Yamada Denki Co. Ltd. (JP)		4,264

				10,402

TEXTILES, APPAREL & LUXURY GOODS—2.3%
	52,523	LVMH Moet Hennessy Louis Vuitton SA (FR)		5,527

THRIFTS & MORTGAGE FINANCE—3.0%
	103,617	Hypo Real Estate Holding AG (GER)		7,259

TRADING COMPANIES & DISTRIBUTORS—2.5%
	1,079,000	Marubeni Corp. (JP)		6,211

WIRELESS TELECOMMUNICATION SERVICES—4.2%
	278,835	America Movil SA de C.V. Series L ADR (MEX)²		10,292

TOTAL COMMON STOCKS (Cost $187,604)				238,402


SHORT-TERM INVESTMENTS—3.6%
(Cost $8,957)
Principal
Amount			Value
(000s)			(000s)

REPURCHASE AGREEMENTS
$	8,957	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FNMA Note (market value $9,136)		8,957

TOTAL INVESTMENTS—101.1% (Cost $196,561)				247,359

CASH AND OTHER ASSETS, LESS LIABILITIES—(1.1)%				(2,721	)

TOTAL NET ASSETS—100.0%			$	244,638


1	Securities exempt from registration under 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. The securities are priced by an independent pricing service selected by the adviser (Harbor Capital Advisors, Inc.) and are considered to be liquid under procedures established by the Board of Trustees. At April 30, 2006, these securities were valued at $948 or 0.39% of net assets.

2	ADR after the name of a foreign holding stands for American Depositary Receipts representing ownership of foreign securities. ADRs are issued by U.S. banking institutions.

3	GDR after the name of a holding stands for Global Depositary Receipts representing ownership of foreign securities. GDRs are issued by either U.S. or non-U.S. banking organizations.

*	Non-income producing security.

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Equity Funds

STATEMENT OF ASSETS AND LIABILITIES—April 30, 2006 (Unaudited)

(All amounts in Thousands, except per share amounts)


						Harbor
			Harbor			International
			International			Growth

ASSETS
Investments, at identified cost*			$	8,123,555		$	196,561

Investments, at value			$	15,254,374		$	238,402
Repurchase agreements				—			8,957
Cash				—			1
Foreign currency, at value (cost: $5,117; $256)				5,173			262
Receivables for:
	Investments sold			—			11,603
	Capital shares sold			30,222			265
	Dividends			50,083			427
	Interest			218			3
Withholding tax receivable				4,565			135
Prepaid fund insurance				39			—

		Total Assets		15,344,674			260,055

LIABILITIES
Payables for:
	Investments purchased			4,187			14,992
	Capital shares reacquired			9,636			238
	Dividends to shareholders			263			—
Accrued expenses:
	Management fees			8,397			110
	12b-1 fees			161			4
	Trustees’ fees and expenses			30			1
	Transfer agent fees			760			13
	Other			4,685			59

		Total Liabilities		28,119			15,417

NET ASSETS			$	15,316,555		$	244,638

Net Assets Consist of:
	Paid-in capital		$	8,111,078		$	680,853
	Undistributed/(overdistributed) net investment income			(79,023	)		438
	Accumulated net realized gain/(loss)			153,434			(487,466	)
	Unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies			7,131,066			50,813

			$	15,316,555		$	244,638

NET ASSET VALUE PER SHARE PER CLASS¹:
Institutional Class
Net assets			$	14,477,871		$	225,461
Shares of beneficial interest²				245,739			17,884
Net asset value per share			$	58.92		$	12.61
Retirement Class
Net assets			$	129,982		$	93
Shares of beneficial interest²				2,214			7
Net asset value per share			$	58.70		$	12.60
Investor Class
Net assets			$	708,702		$	19,084
Shares of beneficial interest²				12,116			1,516
Net asset value per share			$	58.49		$	12.59


*	Including repurchase agreements and short-term investments.

1	Per share amounts can be recalculated when total net assets and shares of beneficial interest are not rounded to thousands.

2	Par value $0.01 (unlimited authorization).

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Equity Funds

STATEMENT OF OPERATIONS—Six Months Ended April 30, 2006 (Unaudited)

(All amounts in Thousands)


						Harbor
			Harbor			International
			International			Growth

Investment Income:
	Dividends		$	147,292		$	1,360
	Interest			6,802			175
	Securities lending income			—			—
	Foreign taxes withheld			(12,071	)		(126	)

	Total Investment Income			142,023			1,409
Operating Expenses:
	Management fees			47,013			741
	12b-1 fees:
		Retirement Class		131			—
		Investor Class		646			15
	Shareholder communications			360			27
	Custodian fees			3,078			89
	Transfer agent fees:
		Institutional Class		3,330			51
		Retirement Class		29			—
		Investor Class		556			13
	Professional fees			198			3
	Trustees’ fees and expenses			60			1
	Registration fees			158			29
	Miscellaneous			91			2

		Total operating expenses		55,650			971
	Transfer agent fees waived			—			—
	Other expense reimbursements and reductions (Note 4)			(44	)		(1	)

	Net operating expenses			55,606			970

Net Investment Income/(Loss)				86,417			439
Realized and Unrealized Gain/(Loss) on Investment Transactions:
	Net realized gain/(loss) on:
		Investments		165,450			18,802
		Foreign currency transactions		(1,945	)		(142	)
	Change in net unrealized appreciation/ (depreciation) of:
		Investments		3,073,617			30,873
		Translation of assets and liabilities in foreign currencies		1,534			11

	Net gain/(loss) on investment transactions			3,238,656			49,544

	Net Increase/(Decrease) in Net Assets Resulting from Operations		$	3,325,073		$	49,983

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Equity Funds

STATEMENT OF CHANGES IN NET ASSETS

(All amounts in Thousands)


			Harbor						Harbor
			International						International Growth

			November 1,			November 1,			November 1,			November 1,
			2005			2004			2005			2004
			through			through			through			through
			April 30,			October 31,			April 30,			October 31,
			2006			2005			2006			2005

			(Unaudited)						(Unaudited)
INCREASE/(DECREASE) IN NET ASSETS:
Operations:
	Net investment income/(loss)		$	86,417		$	131,278		$	439		$	1,251
	Net realized gain/(loss) on investments			163,505			289,937			18,660			9,716
	Net unrealized appreciation/(depreciation) of investments			3,075,151			1,439,208			30,884			11,372

		Net increase/(decrease) in net assets resulting from operations		3,325,073			1,860,423			49,983			22,339

Distributions to Shareholders:
	Net investment income:
		Institutional Class		(226,365	)		(109,365	)		(546	)		(1,101	)
		Retirement Class		(1,761	)		(414	)		—			—
		Investor Class		(7,592	)		(2,260	)		(10	)		(14	)
	Net realized gain on investments:
		Institutional Class		(268,070	)		(28,792	)		—			—
		Retirement Class		(2,262	)		(122	)		—			—
		Investor Class		(10,543	)		(771	)		—			—

		Total distributions to shareholders		(516,593	)		(141,724	)		(556	)		(1,115	)

Net Increase/(Decrease) Derived from Capital Stock Activity				1,776,072			1,232,980			34,957			(3,275	)

	Net increase/(decrease) in net assets			4,584,552			2,951,679			84,384			17,949
Net Assets:
	Beginning of period			10,732,003			7,780,324			160,254			142,305

	End of period*		$	15,316,555		$	10,732,003		$	244,638		$	160,254

* Includes undistributed/(over-distributed) net investment income of:			$	(79,023	)	$	70,278		$	438		$	555

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Equity Funds

STATEMENT OF CHANGES IN NET ASSETS—CAPITAL STOCK ACTIVITY

(All amounts and shares in Thousands)


			Harbor						Harbor
			International						International Growth

			November 1,			November 1,			November 1,			November 1,
			2005			2004			2005			2004
			through			through			through			through
			April 30,			October 31,			April 30,			October 31,
			2006			2005			2006			2005

			(Unaudited)						(Unaudited)
AMOUNT ($)
Institutional Class:
	Net proceeds from sale of shares		$	1,955,194		$	2,212,425		$	41,179		$	41,044
	Net proceeds from redemption fees			123			178			11			3
	Reinvested in payment of distributions			418,976			115,091			538			1,067
	Cost of shares reacquired			(830,842	)		(1,289,471	)		(16,314	)		(48,435	)

		Net increase/(decrease) in net assets	$	1,543,451		$	1,038,223		$	25,414		$	(6,321	)

Retirement Class:
	Net proceeds from sale of shares		$	50,389		$	60,760		$	43		$	9
	Net proceeds from redemption fees			1			1			—	^a		—	^a
	Reinvested in payment of distributions			4,022			536			—			—
	Cost of shares reacquired			(29,835	)		(15,626	)		(8	)		—

		Net increase/(decrease) in net assets	$	24,577		$	45,671		$	35		$	9

Investor Class:
	Net proceeds from sale of shares		$	238,134		$	199,275		$	10,705		$	4,218
	Net proceeds from redemption fees			6			7			1			—	^a
	Reinvested in payment of distributions			16,906			2,801			9			15
	Cost of shares reacquired			(47,002	)		(52,997	)		(1,207	)		(1,196	)

		Net increase/(decrease) in net assets	$	208,044		$	149,086		$	9,508		$	3,037

SHARES
Institutional Class:
	Shares sold			36,821			50,802			3,540			4,484
	Shares issued in reinvestment of distributions			8,598			2,691			50			116
	Shares reacquired			(15,784	)		(29,616	)		(1,434	)		(5,394	)

	Net increase/(decrease) in shares outstanding			29,635			23,877			2,156			(794	)
	Beginning of period			216,104			192,227			15,728			16,522

		End of period		245,739			216,104			17,884			15,728

Retirement Class:
	Shares sold			955			1,374			4			1
	Shares issued in reinvestment of distributions			83			13			—			—
	Shares reacquired			(562	)		(355	)		(1	)		—

	Net increase/(decrease) in shares outstanding			476			1,032			3			1
	Beginning of period			1,738			706			4			3

		End of period		2,214			1,738			7			4

Investor Class:
	Shares sold			4,500			4,569			925			453
	Shares issued in reinvestment of distributions			349			66			1			2
	Shares reacquired			(895	)		(1,214	)		(105	)		(132	)

	Net increase/(decrease) in shares outstanding			3,954			3,421			821			323
	Beginning of period			8,162			4,741			695			372

		End of period		12,116			8,162			1,516			695


a	Less than $1.

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

Harbor International Equity Funds

Financial Highlights

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR INTERNATIONAL FUND
		Institutional Class

		Six-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002^c			2001

		(Unaudited)
Net asset value beginning of period		$	47.50		$	39.37		$	34.55		$	26.69		$	28.65		$	38.85
Income from Investment Operations:
	Net investment income/(loss)		.40			.63			.39	^d		.47	^d		.42	^d		.57	^d
	Net realized and unrealized gains/(losses) on investments		13.27			8.21			5.50			8.27			(1.23	)		(6.27	)

Total from investment operations			13.67			8.84			5.89			8.74			(.81	)		(5.70	)

Less Distributions:
	Dividends from net investment income		(1.03	)		(.56	)		(.51	)		(.34	)		(.27	)		(.71	)
	Distributions from net realized capital gains^a		(1.22	)		(.15	)		(.56	)		(.54	)		(.88	)		(3.79	)

Total distributions			(2.25	)		(.71	)		(1.07	)		(.88	)		(1.15	)		(4.50	)
Proceeds from redemption fees			—	^j		—	^j		—	^j		—	^j		N/A			N/A

Net asset value end of period			58.92			47.50			39.37			34.55			26.69			28.65
Net assets end of period (000s)		$	14,477,871		$	10,265,053		$	7,567,123		$	5,449,385		$	3,446,010		$	3,497,357

Ratios and Supplemental Data (%):
	Total return		29.77	%ⁱ		22.63	%		17.26	%^e		33.69	%^e		(3.19	)%^e		(16.40	)% ^e
	Ratio of operating expenses to average net assets^b		.86	^k		.87			.86	^d		.89	^d		.87	^d		.91	^d
	Ratio of operating expenses not imposed to average net assets		—			—			.01			.01			.06			.06
	Ratio of operating expenses net of all offsets to average net assets		.86	^k		.87			.86	^d		.89	^d		.87	^d		.91	^d
	Ratio of net investment income/(loss) to average net assets		1.36	^k		1.42			1.25	^d		1.83	^d		1.45	^d		1.36	^d
	Portfolio turnover		5	ⁱ		13			12			21			16			7


HARBOR INTERNATIONAL GROWTH FUND
		Institutional Class

		Six-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004^f			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	9.76		$	8.42		$	7.92		$	6.74		$	8.44		$	17.56
Income from Investment Operations:
	Net investment income/(loss)		.01			.08			.04	^d		.07	^d		.06			—
	Net realized and unrealized gains/(losses) on investments		2.87			1.33			.54			1.14			(1.76	)		(7.30	)

Total from investment operations			2.88			1.41			.58			1.21			(1.70	)		(7.30	)

Less Distributions:
	Dividends from net investment income		(.03	)		(.07	)		(.08	)		(.03	)		—			—
	Distributions from net realized capital gains^a		—			—			—			—			—			(1.82	)

Total Distributions			(.03	)		(.07	)		(.08	)		(.03	)		—			(1.82	)
Proceeds from redemption fees			—	^j		—	^j		—	^j		—	^j		N/A			N/A

Net asset value end of period			12.61			9.76			8.42			7.92			6.74			8.44
Net assets end of period (000s)		$	225,461		$	153,439		$	139,148		$	231,523		$	256,108		$	437,201

Ratios and Supplemental Data (%):
	Total return		29.61	%ⁱ		16.82	%		7.32	%^e		18.07	%^e		(20.13	)%		(45.53	)%
	Ratio of operating expenses to average net assets^b		.95	^k		1.00			.93	^d		.98	^d		.95			.89
	Ratio of operating expenses not imposed to average net assets		—			—			.05			.01			—			—
	Ratio of operating expenses net of all offsets to average net assets		.95	^k		1.00			.93	^d		.98	^d		.95			.89
	Ratio of net investment income/(loss) to average net assets		.25	^k		.87			.48	^d		.91	^d		.60			.18
	Portfolio turnover		55	ⁱ		183			216			234			317			63

See page 82 for notes to the International Equity Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY


Retirement Class												Investor Class

Six-Month			Year Ended October 31									Six-Month			Year Ended October 31
Period Ended												Period Ended
April 30, 2006			2005			2004			2003^g			April 30, 2006			2005			2004			2003^g

(Unaudited)												(Unaudited)
$	47.31		$	39.25		$	34.49		$	26.69		$	47.13		$	39.12		$	34.43		$	26.69
	.38			.58			.37	^d		.61	^d		.46			.51			.34	^d		.47	^d
	13.18			8.13			5.41			8.06			13.00			8.08			5.36			8.14

	13.56			8.71			5.78			8.67			13.46			8.59			5.70			8.61

	(.95	)		(.50	)		(.46	)		(.33	)		(.88	)		(.43	)		(.45	)		(.33	)
	(1.22	)		(.15	)		(.56	)		(.54	)		(1.22	)		(.15	)		(.56	)		(.54	)

	(2.17	)		(.65	)		(1.02	)		(.87	)		(2.10	)		(.58	)		(1.01	)		(.87	)
	—	^j		—	^j		—	^j		—	^j		—	^j		—	^j		—	^j		—	^j

	58.70			47.31			39.25			34.49			58.49			47.13			39.12			34.43
$	129,982		$	82,247		$	27,727		$	5,808		$	708,702		$	384,703		$	185,474		$	59,472

	29.62	%ⁱ		22.35	%		16.96	% ^e		33.42	%^e		29.48	%ⁱ		22.10	%		16.76	% ^e		33.20	%^e
	1.11	^k		1.12			1.11	^d		1.14	^d		1.26	^k		1.30			1.29	^d		1.31	^d
	—			—			.01			.01			—			—			.01			.01
	1.11	^k		1.12			1.11	^d		1.14	^d		1.26	^k		1.30			1.29	^d		1.31	^d
	1.12	^k		1.27			1.11	^d		1.90	^d		1.01	^k		1.02			.92	^d		1.46	^d
	5	ⁱ		13			12			21			5	ⁱ		13			12			21


Retirement Class												Investor Class

Six-Month			Year Ended October 31									Six-Month			Year Ended October 31
Period Ended												Period Ended
April 30, 2006			2005			2004^f			2003^g			April 30, 2006			2005			2004^f			2003^g

(Unaudited)												(Unaudited)
$	9.75		$	8.42		$	7.92		$	6.74		$	9.74		$	8.41		$	7.92		$	6.74
	.03			.07			.01	^d		.03	^d		.01			.05			.04	^d		.04	^d
	2.83			1.31			.57			1.18			2.85			1.32			.52			1.17

	2.86			1.38			.58			1.21			2.86			1.37			.56			1.21

	(.01	)		(.05	)		(.08	)		(.03	)		(.01	)		(.04	)		(.07	)		(.03	)
	—			—			—			—			—			—			—			—

	(.01	)		(.05	)		(.08	)		(.03	)		(.01	)		(.04	)		(.07	)		(.03	)
	—	^j		—	^j		—	^j		—	^j		—	^j		—	^j		—	^j		—	^j

	12.60			9.75			8.42			7.92			12.59			9.74			8.41			7.92
$	93		$	43		$	29		$	—		$	19,084		$	6,772		$	3,128		$	383

	29.40	%ⁱ		16.46	%		7.31	%^e		18.07	%^e		29.40	%ⁱ		16.31	% ^e		7.04	%^e		18.02	%^e
	1.20	^k		1.24			1.19	^d		N/A	^h		1.36	^k		1.39			1.39	^d		1.40	^d
	—			—			.05			—			—			.02			.04			.01
	1.20	^k		1.24			1.19	^d		N/A	^h		1.36	^k		1.39			1.39	^d		1.40	^d
	.20	^k		.57			.37	^d		N/A	^h		(.04	)^k		.35			.32	^d		.49	^d
	55	ⁱ		183			216			234			55	ⁱ		183			216			234

INTERNATIONAL EQUITY

Harbor International Equity Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


a	Includes both short-term and long-term capital gains.

b	Percentage does not reflect reduction for credit balance arrangements from custodian. (See Note 4 to Financial Statements).

c	After the close of business on October 31, 2002, Harbor International Fund II was merged with and into Harbor International Fund.

d	Reflects the Adviser’s waiver of a portion of its management fees and/or other operating expenses.

e	The total returns would have been lower had certain expenses not been waived during the periods shown.

f	Effective March 1, 2004, Harbor International Growth Fund appointed Marsico Capital Management, LLC as its Subadviser.

g	Commenced operations November 1, 2002.

h	Assets in this class were too small to incur any income or expense.

i	Unannualized.

j	Less than $0.01.

k	Annualized.

The accompanying notes are an integral part of the financial statements.

INTERNATIONAL EQUITY

[THIS PAGE INTENTIONALLY LEFT BLANK]

INTERNATIONAL EQUITY

Harbor Fixed Income Funds

Harbor High-Yield Bond Fund

MANAGERS’ COMMENTARY (Unaudited)

SUBADVISER

Shenkman Capital

Management, Inc.

461 Fifth Avenue

22nd Floor

New York, NY 10017

Mark Shenkman

Portfolio Manager (since 2002)

Mark Flanagan, CFA, CPA

Portfolio Manager (since 2002)

Frank Whitley

Portfolio Manager (since 2002)

Robert Stricker, CFA

Portfolio Manager (since 2003)

Steven Schweitzer

Portfolio Manager (since 2004)

Shenkman Capital has subadvised the Fund since its inception in 2002.

INVESTMENT GOAL

Total return.

PRINCIPAL STYLE CHARACTERISTICS

High-yield bonds.

TOP TEN HOLDINGS (% of net assets)


R.H. Donnelley Corp.	1.5	%
Crown Castle International	1.0
Cablevision Systems Corp.	1.0
Insight Communications Co. Inc.	0.9
Alomosa (Delaware) AirGate PCS Inc.	0.9
Alpha Natural Resources LLC	0.9
Brickman Group Ltd. Series B	0.9
American Cellular Corp. Series B	0.9
NationsRent Cos. Inc.	0.9
Kabel Deutschland GmbH	0.9

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The high-yield market posted a solid performance for the six months ended April 30, 2006. This was in sharp contrast to other fixed income markets, as both the Merrill Lynch U.S. Treasury Index and the Merrill Lynch U.S. Corporate Master Index were relatively flat. The vital signs of the high-yield market remained healthy and robust. While many pundits had predicted a difficult market environment, the Merrill Lynch High-Yield Master II Index returned 4.98%, outperforming all other U.S. fixed income sectors. During the six months, the 10-year Treasury Note had a significant move as the yield rose from 4.55% to 5.05%.

The fact that high-yield outperformed in a rising interest rate environment is not unusual, as the historical correlation between the high-yield market and rising interest rates is low. However, the high-yield market got an additional boost in the latter part of the fiscal half-year as new issuance significantly lagged overall demand. Some key highlights driving the market during the reporting period included the following: triple-C-rated and lower-priced securities outperformed better quality and par-plus securities; yield spreads continued to compress; and default rates declined further. In our judgment, spread contraction is a direct result of falling default rates, which ended April at a remarkably low 1.65%, according to Moody’s Investor Service. Given the stable U.S. economy, we anticipate that default rates may continue to fall in 2006, despite ongoing turbulence in the automotive sector.

Key economic developments during the fiscal half-year included the U.S. Federal Reserve’s 15th consecutive interest rate increase, escalating oil prices, and continued strength in the U.S. labor markets. After a relatively disappointing 1.7% annualized growth rate over the final three months of calendar year 2005, the U.S. economy grew at an impressive 4.8% during the first quarter of 2006. This growth occurred despite the 375 basis-point rise in the federal funds rate since June 2004.

Indeed, the U.S. Department of Commerce recently reported that pretax profits for U.S. corporations surged 14.4% during the fourth quarter of 2005, the greatest increase since 1992. Corporate profits represented 11.6% of GDP during the fourth quarter of 2005, its largest share since 1966. With corporations generating significant cash flow, many analysts expect businesses to allocate more money to capital expenditures, which could offset any decline in spending by consumers. However, consumers so far seem to be relatively unconcerned that higher energy costs and interest rates may threaten to empty their pocketbooks. Consumer confidence soared in April to its highest level since May 2002, and retail sales in February were 6.5% higher than they were one year earlier, as labor market gains supported Americans’ incomes.

Despite the strengthening labor market, inflation appears subdued. Housing starts slid by 7.9% in February, but the housing market has not fallen apart as some pundits had predicted in the wake of rising mortgage rates and record home prices. In fact, the decline in housing starts has been milder than many analysts anticipated.

FIXED INCOME

Harbor High-Yield Bond Fund

MANAGERS’ COMMENTARY—Continued

Performance

The Harbor High-Yield Bond Fund generated a positive return of 4.85% (Institutional Class), 4.65% (Investor Class), and 4.78% (Retirement Class) for the six months ended April 30, 2006, while the Merrill Lynch High-Yield Master II Index returned 4.98%.

Some of the key drivers of the Fund’s positive performance were holdings in the cable, gaming, services, telecom, and technology sectors. The portfolio also benefited by avoiding two highly levered issuers that are large components of the overall market but do not meet Shenkman Capital’s credit quality standards, as these credits significantly underperformed. The portfolio continues to be well-positioned from both a credit and interest rate perspective. The portfolio has an average rating of B2/B and an average duration of 3.49 years.

Outlook and Strategy

The high-yield sector appears to be on its way to posting its fourth consecutive year of outperformance versus other U.S. fixed income sectors. The high-yield market’s return of 4.98% for the fiscal half-year was in sharp contrast to investment grade corporates and U.S. Treasuries, which posted low returns of 0.04% and 0.15%, respectively.

In our view, investors have already substantially discounted a federal funds rate of 5.25%. If inflation remains at current levels and the U.S. job market does not tighten significantly from current levels, the Fed will most likely be nearing the end of its credit tightening cycle. However, further increases beyond a 5.25% federal funds rate could damage the equity market’s rally and dampen investor demand for high-yield.

We believe that investors’ need for current income remains a solid pillar of support for the high-yield market. In addition, we are encouraged that investors’ expectations for high-yield performance remain relatively low. With many investors focused on other asset classes, the high-yield market may quietly continue to produce respectable returns that are supported by solid fundamental factors, including steady economic growth and low default rates, as well as several positive technical factors, such as a limited supply of securities and robust demand for current income. We believe that the combination of these factors should allow the high-yield market to continue to outperform other fixed income sectors in 2006.

FIXED INCOME

Harbor High-Yield Bond Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 024

Cusip: 411511553

Ticker: HYFAX

Inception Date: 12-01-2002

RETIREMENT CLASS

Fund #: 224

Cusip: 411511546

Ticker: HYFRX

Inception Date: 12-01-2002

INVESTOR CLASS

Fund #: 424

Cusip: 411511538

Ticker: HYFIX

Inception Date: 12-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	211	1,850
Total Net Assets (000s)	$31,245	$618,150
Average Market Coupon	8.2%	8.0%
Yield to Maturity	7.2%	8.3%
Weighted Average Maturity	6.8 years	7.1 years
Weighted Average Duration	3.5 years	4.6 years
Weighted Average Credit Quality	B2/B	B1
R-Squared	65.8%	100%
Beta vs Merrill Lynch High-Yield Master II Index	0.5	1.0
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	25%	N/A

SECTOR ALLOCATION (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 12-01-2002 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Merrill Lynch High-Yield Master II Index. The Fund’s performance includes the reinvestment of all dividends and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			Life of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor High-Yield Bond Fund

	Institutional Class		4.85	%		8.62	%		N/A			10.25	%	$	13,948
	Retirement Class		4.78			8.34			N/A			10.03			13,854
	Investor Class		4.65			8.08			N/A			9.81			13,758

Comparative Index

	Merrill Lynch High-Yield Master II		4.98	%		9.09	%		8.22	%		13.32	%	$	15,332

Performance data quoted represents past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Past performance is no guarantee of future results. Actual return and principal value on an investment will fluctuate, and the shares, when redeemed, may be worth more or less than their original cost.

FIXED INCOME

Harbor High-Yield Bond Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.85%

Total Net Assets (000s):

$26,964

RETIREMENT CLASS

Expense Ratio: 1.08%

Total Net Assets (000s):

INVESTOR CLASS

Expense Ratio: 1.27%

Total Net Assets (000s):

$4,279

CREDIT QUALITY (% of investments)

MATURITY PROFILE (% of investments)

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,048.51	$	4.32
Hypothetical (5% return)		1,000.00		1,020.47		4.26

Retirement Class
Actual	$	1,000.00	$	1,047.84	$	5.49
Hypothetical (5% return)		1,000.00		1,019.33		5.41

Investor Class
Actual	$	1,000.00	$	1,046.49	$	6.45
Hypothetical (5% return)		1,000.00		1,018.39		6.36


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

FIXED INCOME

Harbor High-Yield Bond Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Total Investments (% of net assets)

(Excludes net cash and short-term investments of 2.7%)


Media		15.3
Commercial Services & Supplies		8.8
Hotels, Restaurants & Leisure		8.1
Wireless Telecommunication Services		8.0
Oil, Gas & Consumable Fuels		7.7
Aerospace & Defense		3.7
Electric Utilities		3.3
Specialty Retail		3.3
Chemicals		3.2
Household Durables		3.2
Diversified Telecommunication Services		3.1
Household Products		2.8
Gas Utilities		2.4
Building Products		2.3
Distributors		2.3
Food Products		2.3
Food & Staples Retailing		2.0
Health Care Providers & Services		1.7
Textiles, Apparel & Luxury Goods		1.6
IT Services		1.3
Paper & Forest Products		1.2
Pharmaceuticals		1.0
Diversified Consumer Services		0.9
Communications Equipment		0.8
Containers & Packaging		0.8
Health Care Equipment & Supplies		0.8
Office Electronics		0.8
Software		0.8
Machinery		0.7
Diversified Financial Services		0.6
Energy Equipment & Services		0.6
Automobiles		0.4
Real Estate		0.4
Consumer Finance		0.3
Electronic Equipment & Instruments		0.3
Leisure Equipment & Products		0.3
Beverages		0.2


COMMON STOCKS—1.6%

			Value
Shares			(000s)

MEDIA—0.5%
	5,000	EchoStar Communications Corp. Cl. A	$	155

OIL, GAS & CONSUMABLE FUELS—1.1%
	5,000	Alpha Natural Resources Inc.		125
	5,000	Compton Petroleum Corp. (CAN)		67
	2,500	Newfield Exploration Co.		111
	1,875	Range Resources Corp.		50

				353

TOTAL COMMON STOCKS (Cost $475)				508


CORPORATE BONDS & NOTES—93.7%

Principal
Amount
(000s)

AEROSPACE & DEFENSE—3.7%
		Argo-Tech Corp.
$	125		9.250%—06/01/2011	132
		Armor Holdings Inc.
	100		8.250%—08/15/2013	107
		BE Aerospace Inc.
	75		8.500%—10/01/2010	80
		BE Aerospace Inc. Series B
	50		8.875%—05/01/2011	53
		DRS Technologies Inc.
	150		7.625%—02/01/2018	155
		K&F Acquisition Inc.
	100		7.750%—11/15/2014	103
		Sequa Corp.
	250		9.000%—08/01/2009	270
		Transdigm Inc.
	250		8.375%—07/15/2011	264

				1,164

BEVERAGES—0.2%
		Le-Nature’s Inc.
	50		9.000%—06/15/2013¹	52

BUILDING PRODUCTS—2.3%
		Goodman Global Holding Co. Inc.
	250		7.491%—06/15/2012²	256
	100		7.875%—12/15/2012	101

				357

		Interface Inc.
	125		7.300%—04/01/2008	127
	125		10.375%—02/01/2010	137

				264

		Nortek Inc.
	100		8.500%—09/01/2014	103

				724

CHEMICALS—3.2%
		Hexcel Corp.
	100		6.750%—02/01/2015	99
		Huntsman LLC
	50		11.500%—07/15/2012	58
	65		11.625%—10/15/2010	73

				131

		Nalco Co.
	200		8.875%—11/15/2013	208
		Resolution Performance Products Inc.
	200		13.500%—11/15/2010	215
		Rhodia SA
	33		10.250%—06/01/2010	37

FIXED INCOME

Harbor High-Yield Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


CORPORATE BONDS & NOTES—Continued

Principal
Amount				Value
(000s)				(000s)

CHEMICALS—Continued
		Rockwood Specialties Group Inc.
$	125		7.500%—11/15/2014	$	125
	182		10.625%—05/15/2011		198

					323

					1,013

COMMERCIAL SERVICES & SUPPLIES—8.8%
		Ahern Rentals Inc.
	125		9.250%—08/15/2013		131
		Allied Waste North America Series B
	100		8.500%—12/01/2008		106
		Avis Budget Car Rental LLC
	100		7.576%—05/15/2014^1,2		103
		Brickman Group Ltd. Series B
	250		11.750%—12/15/2009		273
		Casella Waste Systems Inc.
	150		9.750%—02/01/2013		160
		CHC Helicopter Corp.
	50		7.375%—05/01/2014		51
		Corrections Corp of America
	100		7.500%—05/01/2011		102
		Da-Lite Screen Co. Inc.
	150		9.500%—05/15/2011		160
		DynCorp International Series B
	150		9.500%—02/15/2013		158
		Hertz Corp.
	250		8.875%—01/01/2014¹		267
		Iron Mountain Inc.
	125		7.750%—01/15/2015		128
		Mac-Gray Corp.
	175		7.625%—08/15/2015		180
		NationsRent Cos. Inc.
	250		9.500%—05/01/2015		272
		Neff Rental LLC
	125		11.250%—06/15/2012¹		138
		Norcross Safety Products LLC Series B
	150		9.875%—08/15/2011		158
		Valmont Industries Inc.
	150		6.875%—05/01/2014		150
		Waste Connections Inc.
	100		3.750%—04/01/2026^1,3		100
		Williams Scotsman Inc.
	100		8.500%—10/01/2015		103

					2,740

COMMUNICATIONS EQUIPMENT—0.8%
		Lucent Technologies Inc.
	275		6.450%—03/15/2029		245

CONSUMER FINANCE—0.3%
		Ford Motor Credit Co.
	100		6.625%—06/16/2008		94

CONTAINERS & PACKAGING—0.8%
		BWAY Corp.
	150		10.000%—10/15/2010		160
		Crown Americas LLC
	100		7.625%—11/15/2013¹		103

					263

DISTRIBUTORS—2.3%
		Aviall Inc.
	175		7.625%—07/01/2011		180
		Buhrmann US Inc.
	125		8.250%—07/01/2014		130
		Nebraska Book Co. Inc.
	150		8.625%—03/15/2012		138
		Wesco Distribution Inc.
	250		7.500%—10/15/2017¹		256

					704

DIVERSIFIED CONSUMER SERVICES—0.9%
		Alderwoods Group Inc.
	100		7.750%—09/15/2012		108
		Carriage Services Inc.
	175		7.875%—01/15/2015		178

					286

DIVERSIFIED FINANCIAL SERVICES—0.6%
		Arch Western Finance LLC
	75		6.750%—07/01/2013		74
		Cardtronics Inc.
	100		9.250%—08/15/2013¹		100

					174

DIVERSIFIED TELECOMMUNICATION SERVICES—3.1%
		Cincinnati Bell Inc.
	100		8.375%—01/15/2014		103
		Citizens Communications Co.
	100		6.250%—01/15/2013		98
		Insight Midwest LP
	50		9.750%—10/01/2009		52
		Nordic Telephone Co. Holdings ApS
	150		8.875%—05/01/2016¹		156
		Qwest Capital Funding Inc.
	125		7.000%—08/03/2009		126
		Qwest Corp.
	125		7.625%—06/15/2015		130
	50		8.160%—06/15/2013²		55

					185

		Syniverse Technologies Inc. Series B
	150		7.750%—08/15/2013		150
		Time Warner Telecom Holdings Inc.
	100		9.250%—02/15/2014		107

					977

ELECTRIC UTILITIES—3.3%
		Edison Mission Energy
	250		7.730%—06/15/2009		257
	75		10.000%—08/15/2008		81
	200		13.500%—07/15/2008		228

					566

		Inergy LP
	150		6.875%—12/15/2014		143
		Mirant Americas Generation LLC
	100		8.300%—05/01/2011		104
		Mirant North America LLC
	100		7.375%—12/31/2013¹		101
		MSW Energy Holdings LLC Series B
	125		7.375%—09/01/2010		129

					1,043

ELECTRONIC EQUIPMENT & INSTRUMENTS—0.3%
		Flextronics International Ltd.
	100		1.000%—08/01/2010³		94

ENERGY EQUIPMENT & SERVICES—0.6%
		Gulfmark Offshore Inc.
	175		7.750%—07/15/2014		178

FOOD & STAPLES RETAILING—2.0%
		Ingles Markets Inc.
	175		8.875%—12/01/2011		184
		Rite Aid Corp.
	175		4.750%—12/01/2006³		174
	100		7.125%—01/15/2007		101
	125		8.125%—05/01/2010		128

					403

FIXED INCOME

Harbor High-Yield Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


CORPORATE BONDS & NOTES—Continued

Principal
Amount				Value
(000s)				(000s)

FOOD & STAPLES RETAILING—Continued
		Stater Brothers Holdings
$	50		8.125%—06/15/2012	$	50

					637

FOOD PRODUCTS—2.3%
		B&G Foods Inc.
	100		8.000%—10/01/2011		103
		Del Monte Corp.
	100		6.750%—02/15/2015		96
	225		8.625%—12/15/2012		237

					333

		Michael Foods Inc.
	125		8.000%—11/15/2013		126
		Pinnacle Foods Holding Corp.
	150		8.250%—12/01/2013		151

					713

GAS UTILITIES—2.4%
		Amerigas Partners LP
	100		7.250%—05/20/2015		100
		El Paso (Tennessee Gas)
	50		7.500%—04/01/2017		52
		El Paso Corp.
	125		6.375%—02/01/2009¹		124
	75		7.875%—06/15/2012		78
	125		9.625%—05/15/2012¹		139

					341

		SEMCO Energy Inc.
	125		7.750%—05/15/2013		131
		Suburban Propane Partners LP
	125		6.875%—12/15/2013		119

					743

HEALTH CARE EQUIPMENT & SUPPLIES—0.8%
		Kinetic Concepts Inc.
	163		7.375%—05/15/2013		168
		Koppers Inc.
	85		9.875%—10/15/2013		93

					261

HEALTH CARE PROVIDERS & SERVICES—1.7%
		Psychiatric Solutions Inc.
	125		7.750%—07/15/2015		129
		Res-Care Inc.
	125		7.750%—10/15/2013		126
		Triad Hospitals Inc.
	100		7.000%—11/15/2013		98
		Vanguard Health Holding Co. II LLC
	175		9.000%—10/01/2014		182

					535

HOTELS, RESTAURANTS & LEISURE—7.9%
		American Casino & Entertainment Properties LLC
	100		7.850%—02/01/2012		103
		Chukchansi Economic Development Authority
	100		8.060%—11/15/2012^1,2		104
		Chumash Casino & Resort Enterprise
	75		9.520%—07/15/2010¹		79
		Felcor Lodging LP
	200		8.500%—06/01/2011		215
	100		8.830%—06/01/2011²		104

					319

		Gaylord Entertainment Co.
	175		8.000%—11/15/2013		180
		Global Cash Access LLC
	162		8.750%—03/15/2012		174
		Herbst Gaming Inc.
	125		8.125%—06/01/2012		131
		HMH (Host Marriott)
	50		9.250%—10/01/2007		52
		Intrawest Corp.
	150		7.500%—10/15/2013		153
		Isle of Capri Casinos Inc.
	200		7.000%—03/01/2014		198
		Kerzner International Ltd.
	175		6.750%—10/01/2015		182
		Motor City Casino (CCM Merger)
	250		8.000%—08/01/2013¹		244
		NCL Corp.
	125		10.625%—07/15/2014		127
		Pinnacle Entertainment Inc.
	100		8.250%—03/15/2012		105
		Seneca Gaming Corp.
	125		7.250%—05/01/2012		125
		Seneca Gaming Corp. Series B
	50		7.250%—05/01/2012		50
		Town Sports International
	125		9.625%—04/15/2011		132

					2,458

HOUSEHOLD DURABLES—3.2%
		American Achievement Corp.
	175		8.250%—04/01/2012		178
		Jarden Corp.
	150		9.750%—05/01/2012		157
		Meritage Homes Corp.
	250		6.250%—03/15/2015		226
		Norcraft Cos. LP
	125		9.000%—11/01/2011		131
		Samsonite Corp.
	100		8.875%—06/01/2011		107
		Simmons Bedding Co.
	200		7.875%—01/15/2014		198

					997

HOUSEHOLD PRODUCTS—2.8%
		Central Garden & Pet Co.
	250		9.125%—02/01/2013		267
		Doane Pet Care Co.
	100		10.625%—11/15/2015		123
		Jafra Cosmetics International Inc.
	81		10.750%—05/15/2011		87
		Playtex Products Inc.
	150		9.375%—06/01/2011		157
		Visant Corp.
	150		7.625%—10/01/2012		150
		Visant Holding Corp.
	100		8.750%—12/01/2013¹		98

					882

IT SERVICES—1.3%
		Sungard Data Systems Inc.
	200		9.125%—08/15/2013¹		215
	50		9.431%—08/15/2013^1,2		53
	125		10.250%—08/15/2015¹		135

					403

LEISURE EQUIPMENT & PRODUCTS—0.3%
		Leslie’s Poolmart
	100		7.750%—02/01/2013		100

MACHINERY—0.7%
		Dresser-Rand Group Inc.
	44		7.375%—11/01/2014¹		45
		Mueller Group Inc.
	150		10.000%—05/01/2012		165

					210

FIXED INCOME

Harbor High-Yield Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


CORPORATE BONDS & NOTES—Continued

Principal
Amount				Value
(000s)				(000s)

MEDIA—14.8%
		Advanstar Communications Inc.
$	100		10.750%—08/15/2010	$	109
		Advanstar Communications Inc. Series B
	250		12.000%—02/15/2011		266
		Cablevision Systems Corp.
	300		9.620%—04/01/2009²		319
		Cadmus Communications Corp.
	150		8.375%—06/15/2014		152
		CBD Media Holdings LLC
	125		9.250%—07/15/2012		128
		EchoStar Communications Corp.
	200		5.750%—05/15/2008³		198
		Gray Television Inc.
	150		9.250%—12/15/2011		159
		Houghton Mifflin Co.
	100		8.250%—02/01/2011		104
	100		9.875%—02/01/2013		108

					212

		Insight Communications Co. Inc.
	275		12.250%—02/15/2011⁴		294
		Kabel Deutschland GmbH
	250		10.625%—07/01/2014¹		271
		LBI Media Inc.
	200		10.125%—07/15/2012		216
		LIN Television Corp.
	100		6.500%—05/15/2013		93
		Lodgenet Entertainment Corp.
	200		9.500%—06/15/2013		217
		Mediacom Broadband LLC
	100		8.500%—10/15/2015		99
		Mediacom Communications Corp.
	250		5.250%—07/01/2006³		250
		Mediacom LLC
	50		9.500%—01/15/2013		51
		Morris Publishing Group LLC
	100		7.000%—08/01/2013		95
		Nexstar Finance Inc.
	125		7.000%—01/15/2014		118
		Quebecor Media Inc.
	200		7.750%—03/15/2016¹		206
		R.H. Donnelley Corp.
	500		6.875%—01/15/2013¹		467
	125		10.875%—12/15/2012		139

					606

		Radio One Inc.
	100		6.375%—02/15/2013		95
		Sun Media Corp.
	125		7.625%—02/15/2013		128
		Videotron Ltee
	50		6.875%—01/15/2014		50
		XM Satellite Radio Inc.
	150		9.750%—05/01/2014¹		152
		Yell Finance BV
	130		13.500%—08/01/2011⁴		137

					4,621

OFFICE ELECTRONICS—0.8%
		IKON Office Solutions Inc.
	100		7.750%—09/15/2015		103
		Xerox Capital Trust I
	150		8.000%—02/01/2027		155

					258

OIL, GAS & CONSUMABLE FUELS—6.2%
		Alpha Natural Resources LLC
	250		10.000%—06/01/2012		275
		Chesapeake Energy Corp.
	125		6.500%—08/15/2017		120
		Compton Petroleum Finance Corp.
	200		7.625%—12/01/2013		199
		Comstock Resources Inc.
	150		6.875%—03/01/2012		147
		Copano Energy LLC
	150		8.125%—03/01/2016¹		155
		Denbury Resources Inc.
	100		7.500%—12/15/2015		103
		Encore Acquisition Co.
	250		6.000%—07/15/2015		233
		Exco Resources Inc.
	200		7.250%—01/15/2011		199
		Foundation PA Coal Co.
	150		7.250%—08/01/2014		151
		Harvest Operations Corp.
	150		7.875%—10/15/2011		148
		Holly Energy Partners LP
	75		6.250%—03/01/2015		71
		Whiting Petroleum Corp.
	125		7.000%—02/01/2014		124

					1,925

PAPER & FOREST PRODUCTS—1.2%
		Boise Cascade LLC
	125		7.943%—10/15/2012²		127
		Caraustar Industries Inc.
	100		9.875%—04/01/2011		106
		MDP Acquisitions plc (Jeff Smurfit)
	125		9.625%—10/01/2012		132

					365

PHARMACEUTICALS—1.0%
		Herbalife (WH Holdings) Ltd.
	100		9.500%—04/01/2011		107
		NBTY Inc.
	125		7.125%—10/01/2015¹		119
		Warner Chilcott Corp.
	100		8.750%—02/01/2015¹		100

					326

REAL ESTATE—0.4%
		Omega Healthcare Investors Inc.
	125		7.000%—04/01/2014		123

SOFTWARE—0.8%
		Activant Solutions Inc.
	100		10.990%—04/01/2010^1,2		102
		Serena Software Inc.
	150		10.375%—03/15/2016¹		160

					262

SPECIALTY RETAIL—3.3%
		Affinity Group Inc.
	100		9.000%—02/15/2012		101
		Autonation Inc.
	200		7.045%—04/15/2013^1,2		205
		Burlington Coat Factory Warehouse Corp.
	200		11.125%—04/15/2014¹		204
		Pantry Inc.
	125		7.750%—02/15/2014		127
		Petro Stopping Centers LP
	175		9.000%—02/15/2012		178
		Stripes Acquisition LLC (Susser Finance)
	200		10.625%—12/15/2013¹		213

					1,028

FIXED INCOME

Harbor High-Yield Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


CORPORATE BONDS & NOTES—Continued

Principal
Amount				Value
(000s)				(000s)

TEXTILES, APPAREL & LUXURY GOODS—1.6%
		Levi Strauss & Co.
$	75		12.250%—12/15/2012	$	85
		Oxford Industries Inc.
	150		8.875%—06/01/2011		156
		Perry Ellis International Inc. Series B
	125		8.875%—09/15/2013		126
		Phillips-Van Heusen Corp.
	125		8.125%—05/01/2013		132

					499

WIRELESS TELECOMMUNICATION SERVICES—7.0%
		Alamosa Inc.
	125		8.500%—01/31/2012		135
		Alomosa (Delaware) AirGate PCS Inc.
	275		8.827%—10/15/2011²		286
		American Cellular Corp. Series B
	250		10.000%—08/01/2011		272
		Centennial Communications Corp.
	150		8.125%—02/01/2014		155
	250		10.740%—01/01/2013²		262

					417

		Intelsat Ltd.
	100		5.250%—11/01/2008		97
		Intelsat Subsidiary Holding Co. Ltd.
	250		9.614%—01/15/2012²		255
		New Skies Satellites NV
	75		10.414%—11/01/2011²		78
		Nextel Partners Inc.
	100		8.125%—07/01/2011		105
		Rogers Wireless Inc.
	100		8.000%—12/15/2012		106
		Rural Cellular Corp.
	250		8.250%—03/15/2012		264
		Telenet Group Holding NV
	200		11.500%—06/15/2014^1,4		166

					2,181

TOTAL CORPORATE BONDS & NOTES (Cost $28,729)					29,278


PREFERRED STOCKS—2.0%
				Value
Shares				(000s)

AUTOMOBILES—0.4%
		General Motors Corp. Series A
	5,230		4.500%—03/06/2032³	$	124

HOTELS, RESTAURANTS & LEISURE—0.2%
		Six Flags Inc.
	2,500		7.250%—08/15/2009		58

OIL, GAS & CONSUMABLE FUELS—0.4%
		Chesapeake Energy Corp.
	1,250		4.500%—12/31/2049		120

WIRELESS TELECOMMUNICATION SERVICES—1.0%
		Crown Castle International
	6,000		6.250%—08/15/2012³		332

TOTAL PREFERRED STOCKS (Cost $554)					634


SHORT-TERM INVESTMENTS—1.0%
(Cost $299)
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	299	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.100% collateralized by a FHLB Note (market value $306)		299

TOTAL INVESTMENTS—98.3% (Cost $30,057)				30,719

CASH AND OTHER ASSETS, LESS LIABILITIES—1.7%				526

TOTAL NET ASSETS—100.0%			$	31,245


1	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. These securities are priced by an independent pricing service selected by the adviser (Harbor Capital Advisors, Inc.) and are considered to be liquid under procedures established by the Board of Trustees. At April 30, 2006, these securities were valued at $5,132 or 16.43% of net assets.

2	Floating rate security. The stated rate represents the rate in effect at April 30, 2006.

3	Convertible bond.

4	Step coupon security.

(CAN) Canada.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

[THIS PAGE INTENTIONALLY LEFT BLANK]

FIXED INCOME

Harbor Bond Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Pacific Investment

Management Company LLC

840 Newport Center Drive

P. O. Box 6430

Newport Beach, CA

92658-6430

William Gross

Portfolio Manager (since 1987)

PIMCO has subadvised the Fund since its inception in 1987.

INVESTMENT GOAL

Total return.

PRINCIPAL STYLE CHARACTERISTICS

Intermediate bonds with overall portfolio rated high quality.

TOP TEN HOLDINGS (% of net assets)


Federal National Mortgage Association TBA (5.000% - 05/11/2036)	9.7	%
Federal National Mortgage Association (5.500% - 02/01/2035)	8.6
Federal National Mortgage Association (5.500% - 05/01/2034)	3.9
Federal National Mortgage Association (5.000% - 08/01/2035)	1.3
Federal National Mortgage Association (5.500% - 04/01/2034)	1.3
Federal National Mortgage Association TBA (5.500% - 05/11/2036)	1.2
Federal National Mortgage Association (5.500% - 11/01/2034)	1.0
Federal National Mortgage Association (4.836% - 06/01/2035)	0.8
GSR Mortgage Loan Trust (4.540% - 09/25/2035)	0.8
Bear Stearns Adjustable Rate Mortgage Trust (4.750% - 10/25/2035)	0.8

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

During the first part of the fiscal half-year there were some signs of optimism that the Federal Reserve might be near the end of its rate increases, as a fall in energy prices eased inflation fears. Indications that higher mortgage rates and lofty valuations could finally be pinching affordability in surging property markets also helped placate bond markets.

In the latter part of the six months ended April 30, 2006, rising interest rates in the U.S. and around the globe weighed on bond market returns. The Fed continued to tighten, bringing the federal funds rate to 4.75%. The European Central Bank joined the Federal Reserve in raising rates and the Bank of Japan announced the end of its “quantitative easing” policy, which has flooded Japanese markets with liquidity.

Performance

The Harbor Bond Fund outperformed its benchmark, the Lehman Brothers Aggregate Index, for the first half of the 2006 fiscal year. During a time of volatile interest rates, the Fund posted returns of 1.05% (Institutional Class) and 0.93% (Retirement Class) after fees, compared to a gain of 0.56% for the Index. The Fund also outperformed the Index for the 12-month, 5-year, and
10-year periods ended April 30, 2006.

The Harbor Bond Fund’s investment process is based on a long-term approach, which utilizes both top-down and bottom-up strategies. Top-down strategies focus on duration, yield curve positioning, volatility, and sector rotation, while bottom-up strategies drive the security selection process, focusing on the analysis and identification of undervalued securities. By combining perspectives from both the portfolio level and the individual securities level, we seek to add value consistently over time while incurring acceptable levels of portfolio risk.

In outperforming the benchmark for the fiscal half-year, we employed defensive interest-rate and sector strategies together with broad diversification to help preserve value. We maintained a focus on quality, as the average credit rating of securities in the Fund’s portfolio was held at AAA.

The Fund’s above-benchmark duration was a negative for the portfolio’s performance, as interest rates rose. Our exposure to the short-to-intermediate sector of the yield curve also was a negative, as the yield curve flattened while the Federal Reserve continued to increase interest rates. The Fund benefited from a mortgage overweight, which offset the negative impact of a corporate underweight through most of the six months.

Treasury Inflation Protected Securities (TIPS) helped performance, as nominal yields rose more than real yields. Exposure to emerging markets was positive, as credit quality and economic indicators continued to improve.

FIXED INCOME

Harbor Bond Fund

MANAGER’S COMMENTARY—Continued

Outlook and Strategy

The global economy is transitioning away from policy-driven growth, engineered by major central banks, towards more self-sustaining, internally generated growth. The Federal Reserve and the European Central Bank already have stepped back from monetary reflation. The Bank of Japan has announced its intent to do the same. We believe that the U.S., Japan, China and the Eurozone have sufficient sources of internal demand to withstand the withdrawal of monetary stimulus. The risks to our forecast are primarily to the downside, as each of the world’s biggest economies has structural weaknesses that could make the withdrawal more painful than anticipated.

With respect to portfolio strategy, the Fund will attempt to position itself for a favorable bond market environment as the economy cools and Fed tightening draws to a close. We expect the U.S. economy to grow more slowly as euphoria in the housing sector continues to erode, which could cause a dampening effect on consumer spending. This Federal Reserve tightening cycle has extended longer than we anticipated but is nearing its end; we believe that the Fed will stop at a federal funds rate near 5% as the economy slows. We expect inflation to be benign; wage/price pressure appears to be under control amid an abundant supply of workers in emerging economies.

In this environment, the Fund’s duration will be moderately above that of the index, as slower growth should create downward pressure on interest rates. The Fund will focus on short to intermediate maturities in the U.S. and the U.K., which should outperform as we expect yield curves in both of these markets to steepen. Part of this strategy will include a lengthening of the maturities of Eurodollar futures positions, in an attempt to benefit from Federal Reserve easing, which we expect to begin later this year or in early 2007.

With regard to sector strategies, the Fund will retain an overweight to mortgages, which can potentially add high-quality yield to the portfolio, but we may trim holdings to harvest recent gains. A lighter allocation will put the Fund in a better position to add mortgages at a later date should heightened interest rate volatility create buying opportunities. The Fund will continue to underweight the richly valued corporate sector and compensate for lost corporate income with a mortgage overweight. Eurozone bonds will be de-emphasized as the European Central Bank is still in the early stages of a tightening cycle. We will continue to hold emerging market bonds where long-term credit fundamentals remain strong, but positions may be trimmed to take profits after several years of gains.

In a benign inflation environment, the Fund will continue to de-emphasize Treasury Inflation Protected Securities (TIPS) on a tactical basis. We will hold longer-dated TIPS, which should gain from demand from corporations looking to hedge pension liabilities. The Fund will hold municipal bonds in an effort to capture their relatively attractive yields compared to taxable bonds. Municipal securities also offer an inexpensive hedge against higher rates, as a stable base of retail investors allows municipal securities to hold their value better than taxable bonds when rates rise.

Modest exposures to the yen, euro, and emerging markets currencies will be taken in an effort to gain from expected U.S. dollar weakness. The end of Fed tightening could result in flows of capital out of the dollar toward markets with higher or rising yields.

Fixed income investments are affected by interest rate changes and the creditworthiness of the issues held by the Fund. A rise in interest rates will cause a decrease in the value of fixed income securities. Such an event would have an adverse affect on the Harbor Bond Fund. There may be a greater risk that the Fund could lose money due to prepayment and extension risks because the Fund invests heavily at times in mortgage-related securities. The Fund may engage in active and frequent trading to achieve its principal investment strategies. PIMCO computed the portfolio credit rating of AAA by averaging the credit ratings of all portfolio holdings. References to securities that are backed by the full faith and credit of the U.S. Government do not apply to the shares of the Fund. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

FIXED INCOME

Harbor Bond Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 014

Cusip: 411511108

Ticker: HABDX

Inception Date: 12-29-1987

RETIREMENT CLASS

Fund #: 214

Cusip: 411511686

Ticker: HRBDX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	739	6,795
Total Net Assets (000s)	$2,084,585	$8,295,487
Average Market Coupon	4.2%	5.3%
Yield to Maturity	5.6%	5.6%
Weighted Average Maturity	6.0 years	7.2 years
Weighted Average Duration	5.0 years	4.7 years
Weighted Average Credit Quality	AAA	AA1/AA2
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	181%	N/A

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Lehman Brothers Aggregate Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor Bond Fund

	Institutional Class		1.05	%		1.15	%		6.10	%		6.93	%	$	19,544
	Retirement Class		0.93			0.91			5.86			6.68			19,085

Comparative Index

	LB AGG		0.56	%		0.71	%		5.16	%		6.33	%	$	18,468

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. The performance of the Retirement Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the Retirement Class.

FIXED INCOME

Harbor Bond Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.58%

Total Net Assets (000s):

$2,050,312

RETIREMENT CLASS

Expense Ratio: 0.83%

Total Net Assets (000s):

$34,273

CREDIT QUALITY (% of investments)

MATURITY PROFILE (% of investments)

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,010.51	$	2.90
Hypothetical (5% return)		1,000.00		1,021.81		2.91

Retirement Class
Actual	$	1,000.00	$	1,009.35	$	4.14
Hypothetical (5% return)		1,000.00		1,020.57		4.16


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

FIXED INCOME

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Total Investments (% of net assets)

(Excludes net cash and short-term investments of 34.4%)


Mortgage Pass-Through		51.0
Corporate Bonds & Notes		6.7
Collateralized Mortgage Obligations		4.6
Municipal Bonds		1.2
U.S. Government Obligations		1.0
Foreign Government Obligations		0.7
Asset-Backed Securities		0.4


COMMON STOCKS—0.0%
(Cost $47)
			Value
Shares			(000s)

AIRLINES—0.0%
	1,135	UAL Corp.	$	41


ASSET-BACKED SECURITIES—0.4%
Principal
Amount
(000s)

		AAA Trust Series 2005-2 Cl. A1
$	2,087		5.059%—11/26/2035^1,2,3	2,091
		Carrington Mortgage Investment Trust Series 2005-NC3 Cl. A1A
	673		5.039%—06/25/2035^1,3	674
		Countrywide Asset-Backed Certificates
	836		5.439%—12/25/2031^1,3	837
		Federal National Mortgage Association Series 2005-T2 Cl. 1A1
	534		4.667%—11/28/2035^1,3	534
		Fremont Home Loan Trust Series 2005-E Cl. 2A1
	3,766		5.050%—01/25/2036^1,3	3,769

TOTAL ASSET-BACKED SECURITIES (Cost $7,897)				7,905


COLLATERALIZED MORTGAGE OBLIGATIONS—4.6%
		American Home Mortgage Investment Trust REMIC⁴Series 2004-4 Cl. 4A
	3,584		4.390%—02/25/2045^1,3	3,482
		Banc of America Funding Corp. REMIC⁴Series 2005-D Cl. A1
	3,917		4.115%—05/25/2035^1,3	3,791
		Bear Stearns Adjustable Rate Mortgage Trust REMIC⁴Series 2005-10 Cl. A1
	17,386		4.750%—10/25/2035^1,3	17,127
			Series 2003-1 Cl. 6A1
	1,831		5.067%—04/25/2033^3,5	1,822
			Series 2000-2 Cl. A1
	384		5.173%—11/25/2030^1,3	385

				19,334

		Bear Stearns Alt-A Trust REMIC⁴Series 2005-4 Cl. 3A1
	6,381		5.415%—05/25/2035^3,5	6,389
		Countrywide Home Loan Mortgage Pass Through Trust REMIC⁴Series 2005-HYB9 Cl. 3A2A
	1,800		5.250%—02/20/2036^3,5	1,778
		Federal Home Loan Mortgage Corp. REMIC⁴
	14,423		5.000%—12/15/2020-04/25/2033³	14,152
	371		5.360%—11/15/2030^1,3	373
	724		8.000%—08/15/2022³	732
	110		9.000%—12/15/2020³	110

				15,367

		Federal National Mortgage Association
	982		6.500%—12/25/2042³	996
		Federal National Mortgage Association REMIC⁴Series 2006-5 Cl. 3A2
	900		4.689%—05/25/2035¹	877
		FHLMC Structured Pass Through Securities
	2,464		4.791%—08/15/2032^3,5	2,463
		FHLMC Structured Pass Through Securities REMIC⁴Series T-63 Cl. 1A1
	1,090		4.951%—02/25/2045^1,3	1,100
		First Nationwide Trust REMIC⁴Series 2001-3 Cl. 1A1
	124		6.750%—08/21/2031	124
		GSR Mortgage Loan Trust REMIC⁴Pass Through Certificates Series 2005-AR6 Cl. 2A1
	17,626		4.540%—09/25/2035^1,3	17,233
		IndyMac ARM Trust REMIC Series 2001-H2 Cl. A2 2
	58		6.602%—01/25/2032¹	58
		IndyMac Index Mortgage Loan Trust REMIC⁴Pass Through Certificates Series 2005-AR31 Cl. 1A1
	9,160		5.201%—01/25/2036^1,3	9,099
		Small Business Administration Pass Through Certificates
	847		5.130%—09/01/2023	825
	2,611		6.290%—01/01/2021³	2,688
	340		7.449%—08/01/2010	357

				3,870

		Structured Asset Securities Corp. REMIC⁴
			Series 2002-1A Cl. 4A
	91		6.070%—02/25/2032^3,5	91
			Series 2001-21A Cl. 1A1
	255		6.250%—01/25/2032^3,5	254

				345

		Washington Mutual REMIC⁴
			Pass Through Certificates
			Series 2002-AR11 Cl. A1
	696		5.127%—10/25/2032^1,3	692
			Series 2005-AR13 Cl. A1A1
	2,303		5.249%—10/25/2045¹	2,318

				3,010

		Wells Fargo Mortgage Backed Securities REMIC⁴Series 2006-AR2 CL. A1
	6,579		4.950%—03/25/2036^3,5	6,516

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $97,227)				95,832

FIXED INCOME

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


CORPORATE BONDS & NOTES—6.7%
Principal
Amount				Value
(000s)				(000s)

		American Airlines Inc. Pass Through Certificates Series 2001-2 Cl. A1
$	299		6.978%—04/01/2011	$	306
		American General Finance Corp. MTN⁶
	1,100		4.980%—03/23/2007^1,3		1,101
		American International Group Inc.
	900		5.050%—10/01/2015²		849
		Atlantic & Western Re II Ltd. Series A
	400		10.990%—01/09/2007^1,2		396
		BNP Paribas
	6,600		5.186%—06/29/2049^2,3,5		6,109
		Cablevision System Corp.
	514		6.580%—03/29/2013		517
	771		6.670%—03/29/2013		776
	514		6.740%—03/29/2013		517

					1,810

		China Development Bank
	600		5.000%—10/15/2015		562
		Citigroup
	5,800		5.000%—12/26/2008^1,3		5,804
		DaimlerChrysler North America Holding MTN⁶
	10,600		5.100%—11/17/2006^1,3		10,611
		El Paso CGP Corp.
	7,036		7.420%—02/15/2037^2,3		6,675
	8,000		7.500%—08/15/2006^2,3		8,050

					14,725

		El Paso Corp. MTN⁶
	400		8.050%—10/15/2030		408
		Export-Import Bank of China
	600		4.875%—07/21/2015²		560
		Federal Home Loan Banks
	1,400		0.000%—02/05/2007^3,5		1,299
		Federal National Mortgage Association
	7,100		4.810%—09/22/2006^1,3		7,098
		Ford Motor Credit Co.
	10,300		5.700%—11/16/2006^1,3		10,252
	10,400		5.880%—03/21/2007^1,3		10,245

					20,497

		General Electric Capital Corp. MTN⁶
	10,100		5.050%—01/03/2008^1,3		10,115
	2,000		5.223%—01/08/2016¹		2,006

					12,121

		Goldman Sachs Group Inc. MTN⁶
	8,780		5.420%—07/23/2009^1,3		8,847
		H.J. Heinz Co.
	800		6.428%—12/01/2020²		813
		HBOS plc
	800		5.920%—09/29/2049^2,5		762
		HSBC Bank USA
	10,200		5.000%—09/21/2007^1,3		10,211
		MUFG Capital Finance 1 Ltd.
	700		6.346%—07/29/2049⁵		687
		PEMEX Project Funding Master Trust
	1,600		5.750%—12/15/2015²		1,519
	1,000		8.625%—02/01/2022⁷		1,161

					2,680

		Petroleum Export Ltd.
	688		5.265%—06/15/2011²		673
		Qwest Capital Funding Inc.
	43		7.250%—02/15/2011		43
		Qwest Corp.
	300		7.500%—06/15/2023		299
	2,700		7.625%—06/15/2015		2,822

					3,121

		Ras Laffan LNG III Series B
	1,800		5.838%—09/30/2027²		1,667
		Resona Bank Ltd.
	800		5.850%—09/29/2049^2,5		766
		Royal Bank of Scotland plc
	4,500		5.125%—07/21/2008^1,2,3		4,503
		Santander US Debt SA Unipersonal
	9,800		4.940%—09/21/2007^1,2,3		9,809
		Sprint Capital Corp.
	2,400		6.000%—01/15/2007		2,410
	1,100		6.125%—11/15/2008		1,119

					3,529

		Sumitomo Mitsui Banking Corp.
	5,900		5.625%—07/29/2049^2,3,5		5,646
		UFJ Finance Aruba AEC
	200		6.750%—07/15/2013		210
		United Airlines Inc. Pass Thru Certificates
	2,039		9.060%—06/17/2015³		266
		USB Capital IX
	700		6.189%—03/29/2049⁵		692

TOTAL CORPORATE BONDS & NOTES (Cost $139,239)					139,181


FOREIGN GOVERNMENT OBLIGATIONS—0.7%
		Federative Republic of Brazil
	1,400		8.000%—01/15/2018	1,523
	700		10.710%—06/29/2009¹	814

				2,337

		Republic of Panama
	3,309		6.700%—01/26/2036³	3,260
	500		8.875%—09/30/2027	599
	950		9.375%—07/23/2012	1,097
	3,000		9.625%—02/08/2011	3,435

				8,391

		Republic of Peru
	3,000		9.125%—01/15/2008-02/21/2012	3,163
		Russian Federation
	1,500		5.000%—03/31/2030^2,7	1,631

TOTAL FOREIGN GOVERNMENT OBLIGATIONS (Cost $14,537)				15,522


MORTGAGE PASS-THROUGH—51.0%
		Federal Home Loan Mortgage Corp.
	4,541		5.000%—10/01/2018³	4,426
	126		5.792%—06/01/2024^1,3	128
	8,019		6.000%—07/01/2016-01/01/2034³	8,024
	310		6.000%—08/01/2028-04/01/2033	310
	3		8.500%—02/01/2017	3

				12,891

		Federal Home Loan Mortgage Corp. TBA⁸May Delivery
	4,000		6.000%—05/11/2036	3,987

FIXED INCOME

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


MORTGAGE PASS-THROUGH—Continued
Principal
Amount				Value
(000s)				(000s)

		Federal Housing Authority Project
$	176		7.400%—02/01/2021	$	177
	3,022		7.450%—05/01/2021³		3,020
	24		7.450%—05/01/2021		24

					3,221

		Federal National Mortgage Association
	942		4.500%—11/01/2019³		898
	938		4.500%—01/01/2020-06/01/2020		895
	12,962		4.711%—08/01/2035^1,3		12,815
	17,725		4.836%—06/01/2035³		17,382
	87,950		5.000%—12/01/2016-08/01/2035³		84,140
	49,821		5.000%—09/01/2017-08/01/2035		48,288
	3,470		5.288%—10/01/2040^1,3		3,504
	158,538		5.500%—11/01/2016-11/01/2035		154,280
	468,871		5.500%—12/01/2016-10/01/2035³		456,319
	3,943		6.000%—04/01/2016-09/01/2017³		3,996
	1,652		6.000%—05/01/2016-05/01/2033		1,673
	120		9.000%—11/01/2009³		124

					784,314

		Federal National Mortgage Association TBA⁸
			May Delivery
	3,500		4.500%—05/16/2021		3,333
	213,000		5.000%—05/11/2036		201,485
	26,000		5.500%—05/11/2036		25,252
	19,500		6.000%—05/16/2021		19,458
			June Delivery
	2,500		6.000%—06/19/2021		2,529

					252,057

		Government National Mortgage Association II
	162		4.375%—05/20/2024^1,3		162
	4,998		4.750%—08/20/2022-02/20/2032^1,3		4,991
	5		4.750%—07/20/2024¹		5
	993		5.125%—12/20/2024-11/20/2029^1,3		1,000
	19		5.125%—10/20/2025¹		19
	498		5.375%—03/20/2017-02/20/2025^1,3		501

					6,678

TOTAL MORTGAGE PASS-THROUGH (Cost $1,090,975)					1,063,148


MUNICIPAL BONDS—1.2%
		Badger Tobacco Asset Securitization Corp.
	4,300		6.375%—06/01/2032³	4,609
		City of San Antonio TX
	5,030		4.750%—05/15/2037¹	4,957
	2,670		5.000%—05/15/2036¹	2,904

				7,861

		Golden State Tobacco Securitization Corp.
	3,400		6.250%—06/01/2033³	3,699
	2,740		6.750%—06/01/2039³	3,052
	900		7.875%—06/01/2042	1,071

				7,822

		Port of Seattle WA
	3,501		6.890%—03/01/2035^1,3	3,749
		Salt River Project Agricultural Improvement & Power District
	50		6.140%—01/01/2035¹	51
		State of Texas
	1,300		4.750%—04/01/2035¹	1,300

TOTAL MUNICIPAL BONDS (Cost $23,909)				25,392


U.S. GOVERNMENT OBLIGATIONS—1.0%
		U.S. Treasury Bonds
	3,003		2.000%—01/15/2026^3,9	2,793
	10,857		2.375%—01/15/2025^3,9	10,730
	1,228		3.625%—04/15/2028⁹	1,479

				15,002

		U.S. Treasury Notes
	5,142		3.375%—01/15/2007^3,9	5,204

TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost $21,479)				20,206


PURCHASED OPTIONS—0.0%
No. of
Contracts
(000s)

		Eurodollar Futures
	2,683		Expire 06/2006	7
	4,590		Expire 09/2006	12
	3,248		Expire 12/2006	8

				27

		Eurodollar Options
	1,353		Expire 06/2006	3
	2,055		Expire 12/2006	5
	2,473		Expire 03/2007	6
	1,303		Expire 09/2007	3

				17

		Option — Currency USD vs. JPY
	7,600		Expire 05/2006	140
		Swap Options
	260		Expire 08/2006	3
	98,202		Expire 10/2006	13
	59,000		Expire 12/2006	54
	90,000		Expire 03/2007	222

				292

TOTAL PURCHASED OPTIONS (Cost $1,953)				476


SHORT-TERM INVESTMENTS—48.7%
Principal
Amount
(000s)

BANK OBLIGATIONS
		Barclays Bank plc
$	20,400		4.934%—01/29/2007³	20,398
		Wells Fargo Bank
	56,000		4.760%—05/01/2006	56,000

TOTAL BANK OBLIGATIONS				76,398

FIXED INCOME

100

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued


SHORT-TERM INVESTMENTS—Continued
Principal
Amount				Value
(000s)				(000s)

COMMERCIAL PAPER
		Abbey National LLC
$	58,000		5.000%—08/28/2006	$	57,041
		Bank Ireland Governor & Co.
	50,000		4.990%—08/21/2006³		49,224
		Nordea North America Inc.
	57,000		4.840%—06/28/2006³		56,555
		WestpacTrust Securities New Zealand Ltd.
	60,000		4.965%—07/21/2006³		59,330

TOTAL COMMERCIAL PAPER					222,150

REPURCHASE AGREEMENTS
	49,000	Repurchase Agreement with Credit Suisse First Boston dated April 28, 2006 due May 1, 2006 at 4.620% collateralized by a U.S. Treasury Note (market value $49,772)			49,000
	192,800	Repurchase Agreement with Credit Suisse First Boston dated April 28, 2006 due May 1, 2006 at 4.650% collateralized by a U.S. Treasury Note (market value $195,895)			192,800
	5,636	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.400% collateralized by a FHLB Note (market value $5,753)			5,636

TOTAL REPURCHASE AGREEMENTS					247,436

SOVEREIGN TREASURY BILLS
		Dutch Treasury Certificates
	30,990		2.492%—05/31/2006		39,022
		French Discount Treasury Bills
	20,000		2.396%—05/04/2006		25,221
	14,820		2.487%—07/20/2006		18,593
	31,840		2.504%—07/06/2006		39,985
	35,460		2.519%—05/24/2006		44,666
	15,870		2.634%—06/29/2006		19,939
	32,880		2.785%—10/12/2006		40,959

					189,363

		German Treasury Bills
	24,380		2.225%—05/17/2006		30,729
	14,590		2.344%—06/14/2006		18,354
	28,040		2.590%—07/12/2006		35,200
	49,230		2.669%—08/16/2006		61,621
	10,250		2.703%—09/13/2006		12,803

					158,707

TOTAL SOVEREIGN TREASURY BILLS					387,092

U.S. GOVERNMENT AGENCIES
		Federal National Mortgage Association
	57,100		4.669%—05/01/2006		57,100

U.S. TREASURY BILLS
	380		4.436%—06/01/2006³		379
	115		4.451%—06/01/2006		115
	320		4.476%—06/01/2006—06/15/2006		318
	850		4.490%—06/15/2006		845
	15,980		4.495%—06/15/2006		15,890
	3,010		4.500%—06/15/2006		2,993
	355		4.501%—06/01/2006		354
	10		4.505%—06/01/2006		10
	2,940		4.510%—06/01/2006		2,929
	640		4.511%—06/15/2006		636
	90		4.520%—06/15/2006		90
	100		4.530%—06/15/2006		99
	25		4.540%—06/15/2006		25
	55		4.541%—06/15/2006		55
	120		4.545%—06/15/2006		119
	100		4.560%—06/15/2006		99
	140		4.565%—06/15/2006		139
	80		4.567%—06/15/2006		80
	100		4.581%—06/15/2006		99

TOTAL U.S. TREASURY BILLS					25,274

TOTAL SHORT-TERM INVESTMENTS (Cost $1,000,000)					1,015,450

TOTAL INVESTMENTS—114.3% (Cost $2,397,263)					2,383,153
CASH AND OTHER ASSETS, LESS LIABILITIES—(14.3)%					(298,568	)

TOTAL NET ASSETS—100.0%				$	2,084,585

FUTURES CONTRACTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


							Unrealized
			Aggregate				Appreciation/
	Number of		Face Value				(Depreciation)
Description	Contracts		(000s)		Expiration Date		(000s)

Eurodollar Futures (Buy)		183	$	45,750		Sep-06	$	11
Eurodollar Futures (Buy)		2,658		664,500		Dec-06		(2,405	)
Eurodollar Futures (Buy)		2,412		603,000		Mar-07		(2,514	)
Eurodollar Futures (Buy)		2,014		503,500		Jun-07		(1,902	)
Eurodollar Futures (Buy)		1,625		406,250		Sep-07		(1,424	)
Eurodollar Futures (Buy)		998		249,500		Dec-07		(773	)
Eurodollar Futures (Buy)		165		41,250		Mar-08		(19	)
Federative Republic of Germany 5 Yr. Bonds (Sell)		554		55,400		Jun-06		836
United Kingdom Libor Futures (Sell)		67		8,375		Dec-06		(29	)
U.S. Treasury Bonds Futures (Buy)		116		11,600		Jun-06		(701	)
U.S. Treasury Notes 5 Yr. Futures (Buy)		402		40,200		Jun-06		(396	)
U.S. Treasury Notes 10 Yr. Futures (Buy)		1,300		130,000		Jun-06		(2,005	)

							$	(11,321	)

FIXED INCOME

101

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued

FORWARD CURRENCY CONTRACTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


							Unrealized
			Aggregate				Appreciation/
	Market Value		Face Value				(Depreciation)
Currency	(000s)		(000s)		Delivery Date		(000s)

Brazilian Real (Buy)	$	1,194	$	1,104		Jul-06	$	90
Brazilian Real (Sell)		721		674		Jul-06		(47	)
British Pound (Buy)		8,640		8,328		May-06		312
British Pound (Buy)		8,645		8,540		Jun-06		105
British Pound (Sell)		8,640		8,535		May-06		(105	)
Canadian Dollar (Buy)		230		229		May-06		1
Canadian Dollar (Sell)		230		220		May-06		(10	)
Canadian Dollar (Sell)		230		229		Jun-06		(1	)
Chilean Peso (Buy)		1,127		1,101		Jul-06		26
Chilean Peso (Buy)		918		887		Aug-06		31
Chilean Peso (Sell)		1,040		1,004		Jul-06		(36	)
Chinese Yuan (Buy)		2,142		2,145		Mar-07		(3	)
Euro (Buy)		19,007		18,596		May-06		411
Euro (Sell)		34,518		33,984		May-06		(534	)
Euro (Sell)		81,378		78,630		Jun-06		(2,748	)
Euro (Sell)		233,809		231,002		Jul-06		(2,807	)
Indian Rupee (Buy)		771		774		Aug-06		(3	)
Indian Rupee (Buy)		591		591		Sep-06		—
Indian Rupee (Sell)		771		767		Aug-06		(4	)
Indian Rupee (Sell)		19		19		Sep-06		—
Japanese Yen (Buy)		50,415		49,265		May-06		1,150
Japanese Yen (Sell)		2,927		2,927		May-06		—
Mexican Peso (Buy)		1,269		1,332		Aug-06		(63	)
Mexican Peso (Buy)		402		418		Sep-06		(16	)
Mexican Peso (Sell)		894		899		Aug-06		5
Peruvian Sol (New) (Buy)		348		350		May-06		(2	)
Peruvian Sol (New) (Buy)		1,760		1,749		Aug-06		11
Peruvian Sol (New) (Buy)		424		422		Sep-06		2
Peruvian Sol (New) (Sell)		348		345		May-06		(3	)
Peruvian Sol (New) (Sell)		1,760		1,730		Aug-06		(30	)
Peruvian Sol (New) (Sell)		424		416		Sep-06		(8	)
Polish Zloty (Buy)		1,058		1,019		May-06		39
Polish Zloty (Buy)		356		340		Sep-06		16
Polish Zloty (Sell)		720		675		May-06		(45	)
Russian Ruble (New) (Buy)		344		334		Jul-06		10
Russian Ruble (New) (Buy)		1,519		1,469		Aug-06		50
Russian Ruble (New) (Buy)		449		442		Sep-06		7
Russian Ruble (New) (Sell)		1,373		1,343		Aug-06		(30	)
Singapore Dollar (Buy)		352		344		Jul-06		8
Singapore Dollar (Buy)		1,748		1,699		Aug-06		49
Singapore Dollar (Buy)		438		427		Sep-06		11
Singapore Dollar (Sell)		121		118		Jul-06		(3	)
Singapore Dollar (Sell)		1,748		1,705		Aug-06		(43	)
Slovakian Koruna (Buy)		2,024		1,936		Sep-06		88
Slovakian Koruna (Sell)		1,071		1,011		Sep-06		(60	)
South African Rand (Buy)		130		127		May-06		3
South African Rand (Buy)		106		104		Aug-06		2
South African Rand (Buy)		12		12		Nov-06		—
South African Rand (Sell)		130		124		May-06		(6	)
South Korean Won (Buy)		764		734		Jul-06		30
South Korean Won (Buy)		1,110		1,082		Aug-06		28
South Korean Won (Buy)		1,658		1,606		Sep-06		52
South Korean Won (Sell)		36		35		Jul-06		(1	)
South Korean Won (Sell)		162		157		Aug-06		(5	)
South Korean Won (Sell)		1,658		1,602		Sep-06		(56	)
Taiwan Dollar (New) (Buy)		831		823		Aug-06		8
Taiwan Dollar (New) (Buy)		425		420		Sep-06		5
Taiwan Dollar (New) (Sell)		830		813		Aug-06		(17	)
Taiwan Dollar (New) (Sell)		425		416		Sep-06		(9	)

							$	(4,145	)

FIXED INCOME

102

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued

SWAP AGREEMENTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


											Unrealized
									Notional		Appreciation/
Interest Rate Swaps		Pay/Receive							Amount		(Depreciation)
Counterparty	Floating Rate Index	Floating Rate		Fixed Rate			Expiration Date		(000s)		(000s)

Barclays Capital Bank plc	3-Mo. USD-LIBOR		Pay		5.000	%		06/21/2008	$	5,500	$	(36	)
Bank of America	3-Mo. USD-LIBOR		Pay		5.000			06/21/2036		6,400		(527	)
Deutsche Bank AG	3-Mo. USD-LIBOR		Pay		5.000			06/21/2036		5,600		(479	)
BNP Paribas Bank	5-Year French CPI Ex Tobacco Daily Reference Index		Pay		2.090			10/15/2010		€7,200		6
Barclays Capital Bank plc	5-Year French CPI Ex Tobacco Daily Reference Index		Pay		2.103			10/15/2010		1,000		—
UBS Warburg AG	5-Year French CPI Ex Tobacco Daily Reference Index		Pay		2.146			10/15/2010		1,300		3
Merrill Lynch & Co., Inc.	6-Mo. BP-LIBOR		Receive		4.000			12/15/2035		£2,000		54
Goldman Sachs Capital Markets	6-Mo. JY-LIBOR		Receive		2.000			06/15/2012		¥258,000		38
Morgan Stanley Capital Services, Inc.	6-Mo. JY-LIBOR		Receive		2.000			06/15/2012		413,000		24
UBS Warburg AG	6-Mo. JY-LIBOR		Receive		2.000			06/15/2012		1,125,000		(8	)

											$	(925	)


												Unrealized
										Notional		Appreciation/
Credit Default Swaps			Buy/Sell		Pay/Receive					Amount		(Depreciation)
Counterparty		Reference Entity	Protection¹⁰		Fixed Rate			Expiration Date		(000s)		(000s)

ABN AMRO Bank N.V.		Ford Motor Credit Company 7.000% due 10/01/2013		Sell		3.350	%		06/20/2006	$	1,300	$	1
Morgan Stanley Capital Services, Inc.		Russian Federation 5.000% due 03/31/2030		Sell		0.580			06/20/2006		1,300		1
HSBC Bank USA		General Motors Acceptance Corp. 6.875% due 08/28/2012		Sell		5.000			06/20/2006		1,400		6
Merrill Lynch Capital Services, Inc.		General Motors Acceptance Corp. 6.875% due 08/28/2012		Sell		3.500			06/20/2006		1,600		4
JP Morgan Chase Bank, N.A.		General Motors Acceptance Corp. 6.875% due 08/28/2012		Sell		4.200			06/20/2006		1,000		3
Bank of America		General Motors Acceptance Corp. 6.875% due 08/28/2012		Sell		1.700			06/20/2006		9,200		(26	)
Wachovia Bank		Dow Jones CDX N.A. HV5		Sell		0.850			12/20/2010		3,500		(41	)
JP Morgan Chase Bank, N.A.		Russian Federation 5.000% due 03/31/2030		Sell		0.800			03/20/2016		1,100		(3	)
Morgan Stanley Capital Services, Inc.		Russian Federation 5.000% due 03/31/2030		Sell		0.780			03/20/2016		1,100		(2	)
JP Morgan Chase Bank, N.A.		United Mexican States 5.000% due 03/31/2030		Sell		0.920			03/20/2016		300		1

												$	(56	)

	Total Swaps											$	(981	)

TBA COMMITMENTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:

Principal

Amount

Coupon

Delivery

Value

Description

(000s)

Rate

Date

(000s)

Federal National Mortgage Association (proceeds receivable $2,530)

2,500

6.0%

May-06

2,532

FORWARD VOLATILITY OPTIONS WITH PREMIUMS TO BE DETERMINED ON A FUTURE DATE OUTSTANDING ON APRIL 30, 2006 ARE AS FOLLOWS:


	Notional		Unrealized
Description	Amount		Appreciation

Call & Put — OTC U.S. dollar Forward Delta Neutral Straddle vs. Japanese Yen Strike and premium determined on 08/24/2006, based upon implied volatility parameter of 8.85%. Counterparty: Goldman Sachs & Co. Expires: 08/23/2007	$	24,000	$	34
Call & Put — OTC U.S. dollar Forward Delta Neutral Straddle vs. Japanese Yen Strike and premium determined on 08/24/2006, based upon implied volatility parameter of 8.85%. Counterparty: JP Morgan Chase Bank, N.A. Expires: 08/28/2007		1,000		1

			$	35

FIXED INCOME

103

Harbor Bond Fund

PORTFOLIO OF INVESTMENTS—Continued

WRITTEN OPTIONS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


		Number of		Strike				Value
Description		Shares/Contracts		Price		Expiration Date		(000s)

Eurodollar Futures (Put)			326	$	95.25		Sep-06	$	403
Eurodollar Futures (Call)			79		95.50		Sep-06		1
Eurodollar Futures (Put)			79		95.50		Sep-06		146
Eurodollar Futures (Put)			217		95.00		Dec-06		175
Eurodollar Futures (Put)			1,562		95.25		Dec-06		2,050
Eurodollar Futures (Put)			197		95.50		Dec-06		369
Swap Option (Call)			4,000,000		4.00		Jun-06		—
Swap Option (Call)			11,000,000		4.78		Aug-06		3
Swap Option (Call)			15,000,000		4.30		Oct-06		1
Swap Option (Call)			5,000,000		4.31		Oct-06		—
Swap Option (Call)			9,000,000		4.31		Oct-06		1
Swap Option (Call)			14,000,000		4.54		Oct-06		3
Swap Option (Call)			23,100,000		4.54		Oct-06		4
Swap Option (Call)			26,000,000		4.56		Oct-06		7
Swap Option (Call)			25,000,000		4.85		Dec-06		52
Swap Option (Call)			39,000,000		5.04		Mar-07		197
Swap Option — Yen (Put)			10,300,000		112.00		May-06		57
Swap Option — 6 Mo. Libor (Put)			38,200,000		4.50		Dec-06		348
U.S. Treasury Notes 10 Yr. Futures (Put)			763		105.00		May-06		191
U.S. Treasury Notes 10 Yr. Futures (Call)			135		106.00		May-06		40
U.S. Treasury Notes 10 Yr. Futures (Call)			141		108.00		May-06		2
U.S. Treasury Notes 10 Yr. Futures (Call)			311		109.00		May-06		5
U.S. Treasury Notes 10 Yr. Futures (Call)			79		110.00		May-06		1

	Written options outstanding, at value (premiums received of $4,230)							$	4,056


1	Floating rate security. The stated rate represents the rate in effect at April 30, 2006.

2	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. These securities are priced by an independent pricing service selected by the adviser (Harbor Capital Advisors, Inc.) and are considered to be liquid under procedures established by the Board of Trustees. At April 30, 2006, these securities were valued at $52,519 or 2.52% of net assets.

3	At April 30, 2006, securities held by the Fund were pledged to cover margin requirements for open futures contracts and written options on futures contracts and swap options. (See Note 2 to the Financial Statements.) The securities pledged had an aggregate market value of $1,040,051 or 49.89%.

4	REMICs are CMOs which can hold mortgages secured by any type of real property and issue multiple-class securities backed by those mortgages.

5	Variable rate security. The stated rate represents the rate in effect at April 30, 2006.

6	MTN after the name of a security stands for Medium Term Note.

7	Step coupon security.

8	TBAs are mortgage-backed securities traded under delayed delivery commitments, settling after April 30, 2006. Although the unit price for the trades has been established, the principal value has not been finalized. However, the amount of the commitments will not fluctuate more than 2% from the principal amount. Income on TBAs is not earned until settlement date. (See Note 2 to the Financial Statements).

9	Treasury inflation-protected securities (TIPS) are securities in which the principal amount is adjusted for inflation and interest payments are applied to the inflation-adjusted principal.

10	If the portfolio is a seller of protection and a credit event occurs, as defined under the terms of that particular swap agreement, the portfolio will pay to the buyer of the protection an amount up to the notional value of the swap and in certain instances, take delivery of the security.

€	Euro.

£	British Pound.

¥	Japanese Yen.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

104

[THIS PAGE INTENTIONALLY LEFT BLANK]

FIXED INCOME

105

Harbor Real Return Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Pacific Investment

Management Company LLC

840 Newport Center Drive

P. O. Box 6430

Newport Beach, CA
92658-6430

John Brynjolfsson, CFA

Portfolio Manager (since 2005)

PIMCO has subadvised the Fund since its inception on December 1, 2005.

INVESTMENT GOAL

Seeks maximum real return, consistent with preservation of real capital.

PRINCIPAL STYLE CHARACTERISTICS

Inflation-indexed fixed income securities.

TOP TEN HOLDINGS (% of net assets)


U.S. Treasury Notes (1.875% - 07/15/2015)	47.7	%
U.S. Treasury Notes (3.000% - 07/15/2015)	20.6
U.S. Treasury Notes (0.875% - 04/15/2010)	11.9
U.S. Treasury Notes (4.250% - 01/15/2010)	9.9
U.S. Treasury Notes (3.375% - 01/15/2007)	7.6
U.S. Treasury Notes (2.375% - 04/15/2011)	4.8
U.S. Treasury Notes (3.625% - 01/15/2008)	4.5
U.S. Treasury Bonds (3.875% - 04/15/2029)	4.5
U.S. Treasury Bonds (3.625% - 04/15/2028)	3.5
U.S. Treasury Bonds (2.000% - 01/15/2026)	3.3

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The Harbor Real Return Fund began operations on December 1, 2005. This commentary discusses performance during the five months from the Fund’s inception through April 30, 2006. At the start of this five-month span, there was some evidence of optimism in fixed income markets, as an easing in energy prices calmed fears about inflation. This raised hopes that the Federal Reserve could be approaching the end of its monetary tightening campaign. Signs that higher mortgage rates and rich valuations could be having a cooling effect on property markets also were received favorably by the bond markets.

However, rising interest rates weighed on bond market returns in the latter part of this five-month span. The Federal Reserve continued to tighten, raising the federal funds rate to 4.75%. The European Central Bank also raised rates and the Bank of Japan announced the end of its “quantitative easing” policy, which has provided ample liquidity to Japanese markets.

Performance

From its inception on December 1, 2005, through April 30, 2006, the Harbor Real Return Fund posted returns of -1.08% (Institutional Class) and -1.16% (Retirement Class), after fees. By comparison, the Lehman Brothers U.S. TIPS Index returned -1.13% during this time of volatile interest rates.

The Fund’s investment process employs a combination of top-down and bottom-up strategies. The top-down elements of this approach focus on duration, yield curve positioning, volatility, and sector rotation. At the same time, the selection of specific portfolio holdings is driven by bottom-up techniques focusing on the analysis and identification of undervalued securities. By combining perspectives from the portfolio level and the individual-security level, we seek to add value over time while maintaining overall portfolio risk at acceptable levels.

During the five months ended April 30, 2006, in a market that produced negative returns for Treasury Inflation Protected Securities (TIPS), the Fund’s performance was near that of its benchmark. In this environment we maintained a focus on quality, keeping the average credit rating of securities in the portfolio at AAA.

The Fund’s near-benchmark duration was neutral for the portfolio’s performance. However, our exposure to the short-to-intermediate sector of the yield curve was a negative, as interest rates rose in this sector of the yield curve. The Fund’s exposure was focused mostly on TIPS, which outperformed their U.S. Treasury counterparts as the market focused more on inflation expectations. The Fund did not achieve broad diversification during its first five months due to the relatively small size of the start-up portfolio.

FIXED INCOME

106

Harbor Real Return Fund

MANAGER’S COMMENTARY—Continued

Outlook and Strategy

We believe that the global economy is going through a period of transition toward growth that is more self-sustaining and internally generated and away from policy-driven growth engineered by major central banks. In our view, sources of internal demand in the United States, Japan, China, and the Eurozone should be sufficient to adjust to the withdrawal of monetary stimulus. The risks to our forecast are primarily on the downside, recognizing that each of these major economic regions has structural weaknesses that could make the withdrawal more difficult than we currently anticipate. Key elements of our outlook are as follows:


•	The U.S. economy will grow more slowly; euphoria in the housing sector will continue to erode over the course of the year, with a dampening effect on consumer spending.
•	This Federal Reserve tightening cycle has extended longer than we had expected but is nearing its end.
•	Inflation will be benign. Wage/price pressures appear to be under control, due in part to an abundant supply of workers in emerging economies.

With respect to portfolio strategy, we will position the Fund to take advantage of what we anticipate will be a favorable bond market environment against a backdrop of a cooling economy and signs of an end to Fed tightening. We will target real duration moderately above that of the index, reflecting our expectation that the economy will slow over the remainder of the year and place downward pressure on real yields. We will hold longer-dated TIPS, which, in our view, potentially can offer better value and should benefit from demand from corporations seeking to hedge longer-dated pension liabilities.

From a nominal duration perspective, we will retain nominal bond exposure in anticipation of slower growth. The Fund will continue to emphasize short to intermediate maturities in the U.S. and United Kingdom, consistent with our expectation that yield curves will become steeper in both these markets. However, we also will hold European bond positions that benefit when rates rise, consistent with what we see as a more hawkish stance by the European Central Bank.

The Fund may have an emphasis on mortgages in the event that heightened interest rate volatility should create buying opportunities. We believe that valuation remains a major risk in the corporate bond market. With credit premiums near historic lows and default risk expected to rise as the economy cools, we may hold a modest exposure in selected sectors. The Fund also could make selected investments in emerging market bonds in an effort to take advantage of continued improvements in their credit fundamentals.

This report contains the current opinions of the manager and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Such opinions are subject to change without notice and securities described herein may no longer be included in or may at any time be removed from, the Fund’s portfolio. This report is distributed for informational purposes only. Information contained herein has been obtained from sources believed reliable, but not guaranteed.

Fixed income securities are affected by interest rate changes and the creditworthiness of the issues held by the Fund. A rise in interest rates will cause a decrease in the value of fixed income securities. Such an event would have an adverse effect on the Fund. The Fund is non-diversified which means that it may concentrate its assets in a smaller number of issuers, making it more susceptible to risks associated with a single economic, political or regulatory occurrence than a more diversified portfolio. PIMCO computed the portfolio credit rating of AAA by averaging the credit ratings of all portfolio holdings. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

FIXED INCOME

107

Harbor Real Return Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 025

Cusip: 411511520

Ticker: HARRX

Inception Date: 12-01-2005

RETIREMENT CLASS

Fund #: 225

Cusip: 411511512

Ticker: HRRRX

Inception Date: 12-01-2005

PORTFOLIO STATISTICS


	Portfolio		Benchmark

Number of Holdings		18		19
Total Net Assets (000s)		$8,378		$334,663
Average Market Coupon		2.3%		2.6%
Yield to Maturity		5.4%		5.7%
Weighted Average Maturity		9.8 years		10.1 years
Weighted Average Duration		6.8 years		6.7 years
Weighted Average Credit Quality		AAA		AAA
Portfolio Turnover Rate—Unannualized (5-Month Period Ended 04-30-2006)		169%		N/A

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 12-01-2005 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Lehman Brothers U.S. TIPS Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual

											Life			Final Value
		6			1			5			of			of a $10,000
		Months			Year			Years			Fund			Investment

Harbor Real Return Fund

	Institutional Class		N/A			N/A			N/A			-1.08	%	$	9,892
	Retirement Class		N/A			N/A			N/A			-1.16			9,884

Comparative Index

	LB U.S. TIPS		-0.96	%		-1.11	%		7.10	%		-1.13	%	$	9,887

FIXED INCOME

108

Harbor Real Return Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.57%

Total Net Assets (000s):

$7,390

RETIREMENT CLASS

Expense Ratio: 0.81%

Total Net Assets (000s):

$988

CREDIT QUALITY (% of investments)

MATURITY PROFILE (% of investments)

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the period December 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(December 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	989.20	$	2.35
Hypothetical (5% return)¹		1,000.00		1,021.86		2.86

Retirement Class
Actual	$	1,000.00	$	988.40	$	3.33
Hypothetical (5% return)¹		1,000.00		1,020.67		4.06


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 151/365 (to reflect the life of the Fund).

1	The hypothetical expenses reflect amounts as if the Fund had been in existence for the entire fiscal half year.

FIXED INCOME

109

Harbor Real Return Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Total Investments (% of net assets)

(Excludes net cash and short-term investments of -24.8%)


U.S. Government Obligations		124.8


U.S. GOVERNMENT OBLIGATIONS—124.8%
Principal
Amount				Value
(000s)				(000s)

		U.S. Treasury Bonds
$	300		2.000%—01/15/2026¹	$	279
	246		3.625%—04/15/2028¹		296
	302		3.875%—04/15/2029¹		379

					954

		U.S. Treasury Notes
	1,049		0.875%—04/15/2010¹		998
	4,259		1.875%—07/15/2013-07/15/2015¹		4,092
	402		2.375%—04/15/2011¹		404
	1,658		3.000%—07/15/2012¹		1,728
	627		3.375%—01/15/2007¹		635
	228		3.500%—01/15/2011¹		242
	369		3.625%—01/15/2008¹		380
	182		3.875%—01/15/2009¹		191
	771		4.250%—01/15/2010¹		830

					9,500

TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost $10,527)					10,454


PURCHASED OPTIONS—0.0%
(Cost $1)
No. of
Contracts				Value
(000s)				(000s)

		Swap Option USD vs. JPY
	100		Expire 07/2006	$	2


SHORT-TERM INVESTMENTS—18.2%
Principal
Amount
(000s)

REPURCHASE AGREEMENTS
$	422	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.400% collateralized by a FHLMC Bond (market value $413) and a FNMA Note (market value $24)			422

SOVEREIGN TREASURY BILLS
		French Government Discount Treasury Bills
	€880		0.000%—07/13/2006-09/28/2006²		1,101

TOTAL SHORT-TERM INVESTMENTS (Cost $1,492)					1,523

TOTAL INVESTMENTS—143.0% (Cost $12,020)					11,979
CASH AND OTHER ASSETS, LESS LIABILITIES—(43.0%)					(3,601	)

TOTAL NET ASSETS—100.0%				$	8,378

FORWARD CURRENCY CONTRACTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


							Unrealized
			Aggregate				Appreciation/
	Market Value		Face Value				(Depreciation)
Currency	(000s)		(000s)		Delivery Date		(000s)

Euro (Sell)	$	1,006	$	983		May-06	$	(23	)
Euro (Buy)		48		48		May-06		—
Japanese Yen (Buy)		176		172		May-06		4
Swiss Franc (Buy)		39		37		Jun-06		2

							$	(17	)


1	Treasury inflation-protected securities (TIPS) are securities in which the principal amount is adjusted for inflation and interest payments are applied to the inflation-adjusted principal.

2	Zero coupon securities.

€	Euro.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

110

[THIS PAGE INTENTIONALLY LEFT BLANK]

FIXED INCOME

111

Harbor Short Duration Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Fischer Francis Trees &

Watts, Inc.

200 Park Avenue

New York, NY 10166

Ken O’Donnell, CFA

Portfolio Manager (since 2003)

FFTW has subadvised the Fund since its inception in 1992.

INVESTMENT GOAL

Total return that is consistent with preservation of capital.

PRINCIPAL STYLE CHARACTERISTICS

High quality short-term bonds.

TOP TEN HOLDINGS (% of net assets)


U.S. Treasury Note (3.375% - 02/28/07)	12.6	%
United Kingdom Treasury Note (4.500% - 03/07/07)	6.1
Federal National Mortgage Association (5.329% - 03/25/23)	3.3
Chase Credit Card Master Trust (5.500% - 11/17/08)	2.5
Capital One Master Trust (4.90% - 03/15/10)	2.5
Capital One Master Trust (4.60% - 08/17/09)	2.5
Gracechurch Card Funding plc (2.700% - 08/15/08)	2.4
DaimlerChrysler Auto Trust (2.880% - 10/08/09)	2.3
Citibank Credit Card Issuance Trust (5.650% - 06/16/08)	2.2
Structured Adjustable Rate Mortgage Loan Trust (5.062% - 01/25/35)	2.2

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The U.S. economy fared better than many expected after the devastation of Hurricane Katrina. Job growth increased, consumer confidence improved and capacity utilization resumed its upward trend. After slowing to 1.7% in the fourth quarter of calendar year 2005, GDP growth surged to 4.8% in the first quarter of 2006. Meanwhile, core inflation remained well contained at 2.1%, year-over-year, despite elevated fuel prices.

In response to the resilient economy, the Federal Reserve’s Federal Open Market Committee (FOMC) further increased the policy rate to 4.75%, but indicated that the pace of future increases could be slowing. The U.S. Treasury yield curve flattened considerably during the tightening cycle. Flat yield curves historically have been common at the end of tightening cycles. While it is unclear that the current situation represents a peak for short-term interest rates, policy rates are clearly much closer to neutral than they have been in the recent past.

Of specific concern to the markets is the exogenous effect of elevated energy prices. Crude oil prices rose to near the peak experienced in the aftermath of the hurricanes. Recent prices are reflective of a combination of geopolitical instability in the Middle East and an increase in global demand, specifically from Asia. It is uncertain whether rising energy prices will result in inflationary pressures or serve as an impediment to growth. At the consumer level, fuel demand has largely been considered inelastic due to a lack of substitution, yet concerns are mounting that consumption may be reduced in other areas to compensate for the increase in gasoline prices.

Performance

Despite an environment of rising domestic interest rates, the Harbor Short Duration Fund provided competitive returns. For the six months ended April 30, 2006, the first half of its 2006 fiscal year, the Fund returned 1.84% (Institutional Class) and 1.73% (Retirement Class). This compares with a return of 1.76% for the Fund’s benchmark, the Citigroup 1 YR Treasury Index.

The duration of the portfolio was maintained at a level shorter than the one-year benchmark as a defense against rising short-term interest rates. This short duration position had a positive impact on the portfolio’s total return. With a flat yield curve, the marginal cost of maintaining a short duration position is minimal. A position in floating rate securities, which are less vulnerable to rising interest rates, had an offsetting effect on the yield shortfall. Floating rate securities periodically reset their coupons to reflect current rates and tend to outperform fixed coupon securities during periods of rising interest rates. The risk to this strategy, if yields were to fall unexpectedly, would be in having failed to lock in current rates.

FIXED INCOME

112

Harbor Short Duration Fund

MANAGER’S COMMENTARY—Continued

Outlook and Strategy

At the end of April, Fed funds futures contracts were pricing in an additional increase in short-term interest rates to 5.00%, which the FOMC subsequently implemented at its May 10, 2006 meeting. The Federal Reserve has indicated that rates are currently neutral and that a near-term pause is likely. Given the less hawkish tone of recent policy statements, the magnitude of the short duration position will be reconsidered in the near-term. As we near a peak in short-term interest rates, the portfolio duration will be gradually extended to a level that is neutral to the one-year benchmark.

The Harbor Short Duration Fund focuses on the asset-backed securities (ABS) sector of the fixed income universe as a primary source of yield enhancement. These securities typically are collateralized by consumer loan receivables such as credit card debt, auto loans, and residential mortgages. Consumer loans are pooled and the resultant cash flow stream is securitized, creating multiple securities with various maturities. Individual tranches of securities are credit enhanced in the securitization process to achieve the desired investment grade rating. The diversified loan pool provides a stream of cash flows that are utilized to make interest and principal payments on the issued securities.

The consumer loan market performed well during the recent economic recession. High-quality receivables experienced only modest increases in delinquencies and losses during this difficult period. Collateral performance, which is highly correlated with domestic employment, improved significantly in recent years. The strong performance trend is expected to continue, given the strength in the economy.

The ABS sector offers an attractive risk/return profile versus comparable spread sectors and historically has been the largest contributor to excess returns in the portfolio. Given the high-quality nature of the portfolio and the fact that the ABS market provides an abundance of short duration, highly rated securities (mostly AAA), we believe that the strategy of overweighting the sector is a natural fit. We will continue to emphasize the ABS credit strategy as long as the sector provides attractive investment opportunities. We intend to continue managing the portfolio with a focus on long-term performance while remaining mindful of the short-term risks that are inherent with owning spread securities.

There may be a greater risk that the Fund could lose money due to prepayment and extension risks because the Fund invests heavily at times in asset-backed and mortgage-related securities. The Fund may engage in active and frequent trading to achieve its principal strategies. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

FIXED INCOME

113

Harbor Short Duration Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 016

Cusip: 411511702

Ticker: HASDX

Inception Date: 01-01-1992

RETIREMENT CLASS

Fund #: 216

Cusip: 411511678

Ticker: HRSDX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	53	1
Total Net Assets (000s)	$59,390	N/A
Average Market Coupon	4.2%	3.6%
Yield to Maturity	5.1%	5.0%
Weighted Average Maturity	1.2 years	1.0 years
Weighted Average Duration	0.6 years	1.0 years
Weighted Average Credit Quality	AAA	AAA
Portfolio Turnover Rate—Unannualized (6-Month Period Ended 04-30-2006)	60%	N/A

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Citigroup 1 YR Treasury Index and the Merrill Lynch 1 to 3 YR U.S. Treasury Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor Short Duration Fund

	Institutional Class		1.84	%		3.17	%		2.85	%		4.58	%	$	15,652
	Retirement Class		1.73			2.82			2.58			4.31			15,256

Comparative Indices

	Citigroup 1 YR Treasury		1.76	%		2.82	%		2.60	%		4.33	%	$	15,284
	Merrill Lynch 1 to 3 YR U.S. Treasury		1.41			2.07			3.19			4.82			16,010

Effective July 1, 2006, the Fund is changing its benchmark index from the Citigroup 1 YR Treasury Index to the Merrill Lynch 1 to 3 YR U.S. Treasury Index to better reflect the range of maturities which typically exist in a short-term fixed income fund such as the Harbor Short Duration Fund.

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. The performance of the Retirement Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the Retirement Class.

FIXED INCOME

114

Harbor Short Duration Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.39%

Total Net Assets (000s):

$57,606

RETIREMENT CLASS

Expense Ratio: 0.64%

Total Net Assets (000s):

$1,784

CREDIT QUALITY (% of investments)

MATURITY PROFILE (% of investments)

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,018.42	$	1.95
Hypothetical (5% return)		1,000.00		1,022.76		1.96

Retirement Class
Actual	$	1,000.00	$	1,017.35	$	3.20
Hypothetical (5% return)		1,000.00		1,021.52		3.21


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

FIXED INCOME

115

Harbor Short Duration Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Total Investments (% of net assets)

(Excludes net cash and short-term investments of 4.8%)


Asset-Backed Securities		68.5
U.S. Government Obligations		12.6
Collateralized Mortgage Obligations		8.0
Foreign Government Obligations		6.1


ASSET-BACKED SECURITIES—68.5%
Principal
Amount				Value
(000s)				(000s)

		AmeriCredit Automobile Receivables Trust
			Series 2003-D CL A4
$	908		2.840%—08/06/2010¹	$	890
		Ameriquest Mortgage Securities Inc.
			Series 2006-R1 Cl. M1
	1,000		5.349%—03/25/2036^1,2		1,001
			Series 2005-R1 Cl. M1
	1,000		5.409%—03/25/2035^1,2		1,002

					2,003

		Atlantic City Electric Transition Funding LLC
			Series 2002-1 Cl. A1
	1,250		2.890%—07/20/2010		1,217
		Capital Auto Receivables Asset Trust
			Series 2003-1 Cl. A3A
	467		2.750%—04/16/2007¹		466
			Series 2006-1 Cl. A2A
	650		5.030%—09/15/2008¹		650

					1,116

		Capital One Master Trust
			Series 2001-8A Cl. A
	1,485		4.600%—08/17/2009¹		1,482
			Series 2002-4A Cl. A
	1,500		4.900%—03/15/2010¹		1,495

					2,977

		Centex Home Equity Loan Trust
			Series 2001-C Cl. A4
	16		5.390%—02/25/2030¹		16
		Chase Credit Card Master Trust
			Series 2001-4 Cl. A
	1,500		5.500%—11/17/2008¹		1,503
		Chase Issuance Trust
			Series 2004-A9 Cl. A9
	1,025		3.220%—06/15/2010¹		997
		Chase Manhattan Auto Owner Trust
			Series 2005-B Cl. A2
	1,000		4.770%—03/15/2008¹		999
		Citibank Credit Card Issuance Trust
			Series 2004-A1 Cl. A1
	1,010		2.550%—01/20/2009¹		992
			Series 2004-A4 Cl. A4
	1,000		3.200%—08/24/2009		974
			Series 2001-A6 Cl. A6
	1,318		5.650%—06/16/2008¹		1,320

					3,286

		Connecticut RRB Special Purpose Trust CL&P
			Series 2001-1 Cl. A3
	673		5.730%—03/30/2009		675
		Contimortgage Home Equity Trust
			Pass Through Certificates
			Series 1996-4 Cl. A10
	488		5.381%—01/15/2028^1,2		489
		CPL Transition Funding LLC
			Series 2002-1 Cl. A2
	668		5.010%—01/15/2010¹		666
		DaimlerChrysler Auto Trust
			Series 2003-A Cl. A4
	1,404		2.880%—10/08/2009¹		1,386
		Discover Card Master Trust I
			Series 2002-2 Cl. A
	1,000		5.150%—10/15/2009¹		1,000
		Federal National Mortgage Association REMIC³
			Series 2002-W2 Cl. AF5
	755		6.000%—06/25/2032^1,4		754
		Gracechurch Card Funding plc
			Series 5 Cl. A2
	1,450		2.700%—08/15/2008		1,440
		Harley-Davidson Motorcycle Trust
			Series 2002-2 Cl. A2
	830		3.090%—06/15/2010		820
		Holmes Financing plc
			Series 4 Cl. 2A
	€1,000		5.050%—07/15/2008²		1,267
		Honda Auto Receivables Owner Trust
			Series 2003-2 Cl. A4
$	866		2.160%—10/21/2008¹		855
		Household Private Label Credit Card Master Note Trust I
			Series 2002-1 Cl. A
	1,005		5.500%—01/18/2011		1,009
		HSI Asset Securitization Corp Trust
			Pass Through Securities
			Series 2006-OPT2 Cl. M1
	1,000		5.329%—01/25/2036^1,2		1,001
		Illinois Power Special Purpose Trust
			Series 1998-1 Cl. A6
	845		5.540%—06/25/2009¹		847
		Massachusetts RRB Special Purpose Trust
			Series 1999-1 Cl. A4
	779		6.910%—09/15/2009		790
		MBNA Credit Card Master Note Trust
			Series 2004-A4 Cl. A4
	1,175		2.700%—09/15/2009		1,148
			Series 2002-A1 Cl. A1
	1,000		4.950%—06/15/2009		1,000

					2,148

		Nissan Auto Receivables Owner Trust
			Series 2003-C Cl. A4
	780		2.700%—12/17/2007¹		775
			Series 2004-B Cl. A3
	998		3.350%—05/15/2008		989
			Series 2005-C Cl. A2
	1,000		4.140%—01/15/2008¹		996

					2,760

		Oncor Electricity Delivery Transition Bond Co.
			Series 2003-1 Cl. A1
	727		2.260%—02/15/2009¹		717
		Option One Mortgage Loan Trust
			Series 2005-1 Cl. M1
	1,000		5.479%—02/25/2035^1,2		1,004
		PECO Energy Transition Trust
			Series 1999-A Cl. A6
	891		6.050%—03/01/2009¹		895

FIXED INCOME

116

Harbor Short Duration Fund

PORTFOLIO OF INVESTMENTS—Continued


ASSET-BACKED SECURITIES—Continued
Principal
Amount				Value
(000s)				(000s)

		Residential Asset Securities Corp.
			Series 2005-KS2 Cl. M1
$	1,000		5.389%—03/25/2035^1,2	$	1,003
			Series 2005-KS1 Cl. M1
	1,000		5.409%—02/25/2035^1,2		1,003

					2,006

		Residential Funding Mortgage Securities II Inc.
			Series 2003-HS2 Cl. AIIB
	597		5.209%—06/25/2028^1,2		598
		Specialty Underwriting & Residential Finance
			Pass Through Certificates
			Series 2004-BC4 Cl. M1
	1,000		5.759%—10/25/2035^1,2		1,010
		West Penn Funding LLC Transition Bonds
			Series 1999-A Cl. A3
	550		6.810%—09/25/2008¹		552
		WFS Financial Owner Trust
			Series 2003-1 Cl. A4
	991		2.740%—09/20/2010		977

TOTAL ASSET-BACKED SECURITIES (Cost $40,896)					40,670


COLLATERALIZED MORTGAGE OBLIGATIONS—8.0%
		Federal National Mortgage Association
			Series 2003-38 Cl. FA
	1,968		5.329%—03/25/2023²	1,979
	1		6.000%—03/01/2017	1
	1		6.500%—10/01/2016	1

				1,981

		Federal National Mortgage Association REMIC³
			Series 1997-68 Cl. FC
	1,245		5.438%—05/18/2027²	1,258
	1,291	Structured Adjustable Rate Mortgage Loan Trust Pass Through Certificates Series 2004-20 Cl. 1A1 5.062%—01/25/2035^1,5		1,279
		Structured Asset Securities Corp.
			Series 2002-1A Cl. 2A1
	254		5.674%—02/25/2032^1,2	254

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $4,810)				4,772


FOREIGN GOVERNMENT OBLIGATIONS—6.1%
(Cost $3,576)
		United Kingdom Treasury Note
	£2,000		4.500%—03/07/2007	3,646


U.S. GOVERNMENT OBLIGATIONS—12.6%
(Cost $7,489)
		U.S. Treasury Note
$	7,550		3.375%—02/28/2007	7,456


SHORT-TERM INVESTMENTS—4.5%
REPURCHASE AGREEMENTS
	2,645	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.250% collateralized by a U.S. Treasury Bond (market value $2,700)		2,645

U.S. TREASURY BILLS
	20	4.048%—06/22/2006		20

TOTAL SHORT-TERM INVESTMENTS (Cost $2,665)				2,665

TOTAL INVESTMENTS—99.7% (Cost $59,436)				59,209
CASH AND OTHER ASSETS, LESS LIABILITIES—0.3%				181

TOTAL NET ASSETS—100.0%			$	59,390

FORWARD CURRENCY CONTRACTS OPEN AT APRIL 30, 2006 ARE AS FOLLOWS:


							Unrealized
			Aggregate				Appreciation/
	Market Value		Face Value				(Depreciation)
Currency	(000s)		(000s)		Delivery Date		(000s)

Euro (Sell)	$	3,933	$	3,721		May-06	$	(212	)
Euro (Buy)		2,685		2,602		May-06		83
British Pound (Sell)		3,723		3,639		May-06		(84	)

							$	(213	)


1	At April 30, 2006, securities held by the Fund were pledged to cover margin requirements for open future contracts, written options on futures contracts and swap options. (See Note 2 to the Financial Statements.) The securities pledged had an aggregate market value of $29,899 or 50.34%.

2	Floating rate security. The stated rate represents the rate in effect at April 30, 2006.

3	REMICs are CMOs which can hold mortgages secured by any type of real property and issue multiple-class securities backed by those mortgages.

4	Step coupon security.

5	Variable rate security. The stated rate represents the rate in effect at April 30, 2006.

£	British pound.

€	Euro.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

117

Harbor Money Market Fund

MANAGER’S COMMENTARY (Unaudited)

SUBADVISER

Fischer Francis Trees &

Watts, Inc.

200 Park Avenue

New York, NY 10166

Ken O’Donnell, CFA

Portfolio Manager (since 2003)

FFTW has subadvised the Fund since its inception in 1987.

INVESTMENT GOAL

Current income. The Fund intends to maintain a stable share price of $1.

PRINCIPAL STYLE CHARACTERISTICS

Very short-term high quality money market instruments.

TOP TEN HOLDINGS (% of net assets)


ANZ Inc.	5.5	%
Wells Fargo Bank	5.1
Royal Bank of Scotland plc	5.1
Abbey National LLC	5.0
UBS Finance Inc.	4.7
Lloyds Bank plc	4.6
BMW Capital Corp.	4.5
Chariot Funding LLC	4.4
Barclays Bank plc	4.2
CitiBank	4.2

FUND CATEGORY

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

Market Review

The U.S. economy recovered quickly from the devastation of Hurricane Katrina. The labor sector tightened, consumer confidence improved, and domestic growth resumed. After slowing to 1.7% in the fourth quarter of calendar year 2005, GDP surged to 4.8% in the first quarter of 2006. Meanwhile, core inflation remained well contained at 2.1% on a year-over-year basis.

The Federal Open Market Committee (FOMC) of the Federal Reserve remained vigilant on inflationary pressures, increasing the policy rate to 4.75% but indicating that the pace of future increases could be slowing. At the end of April, markets were forecasting an additional increase. The U.S. Treasury yield curve continued to flatten and finished the six months ended April 30, 2006, with very little term structure. While flat or inverted yield curves are not uncommon at the end of a tightening cycle, it is unclear whether the current situation represents a peak for short- term interest rates. Current rates, however, are clearly much closer to neutral than they have been in the recent past.

Markets continued to monitor the energy sector closely for potential pass-though effects on general economic conditions. Crude oil finished the six months near the peak experienced in the aftermath of the Gulf hurricanes last year. Recent prices were reflective of a combination of geopolitical instability in the Middle East and an increase in global demand. It is uncertain whether rising energy prices will result in inflationary pressure or a reduction in growth, yet concerns are mounting that consumption patterns may change as a result of elevated fuel prices.

Performance

Despite an environment of rising domestic interest rates, the Harbor Money Market Fund provided competitive returns. The Fund returned 2.04% (Institutional Class) and 1.91% (Retirement Class) for the first half of the 2006 fiscal year. This compares with a return of 2.06% for the Fund’s benchmark, the Merrill Lynch 3-Month U.S. Treasury Bill Index. The 7-day annualized yield (as defined by the Securities and Exchange Commission) of the Harbor Money Market Fund (Institutional Class) rose to 4.48% as of April 30, 2006. That compares with 7-day annualized yields of 3.62%, 6 months earlier, and 2.44% 12 months earlier.

The duration of the portfolio was maintained at a level shorter than the three-month benchmark as a defense against increasing short-term interest rates. The overall duration position had a positive impact on the portfolio’s total return. With a flat yield curve, the marginal cost of maintaining a short duration position is minimal. Shortening the reinvestment period is rewarded during periods of rising rates. The risk to this strategy lies in the possibility of failing to have locked in current rates if yields were to fall unexpectedly. In the current environment, we believe that this risk appears to be remote.

FIXED INCOME

118

Harbor Money Market Fund

MANAGER’S COMMENTARY—Continued

Outlook and Strategy

During the last six months, the U.S. federal funds target rate was increased at each FOMC meeting, standing at 4.75% by March 28, 2006. Fed funds futures contracts priced in an additional increase in short-term interest rates to 5.00%, which the FOMC subsequently implemented at its May 10, 2006 meeting. The Fed has recently changed its tone and has indicated that current policy rates are neutral. This change in tone may warrant extending the days-to-maturity in the coming weeks.

The Fund invests primarily in high-quality money market instruments, including bank CDs, commercial paper, agency discount notes, and U.S. Treasury Bills. The average days-to-maturity of the portfolio was held relatively short in response to the lack of opportunity to pick up incremental yield by extending duration. We intend to keep the Fund invested in money market products with maturities inside of three months while maintaining a weighted average maturity for the portfolio in the low 30-day range. Should the market take on a more hawkish tone and the yield curve steepen, we may consider extending the average-days-to-maturity to capture additional yield.

An investment in the Fund is not insured or guaranteed by the FDIC or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. For information on the different share classes and the risks associated with an investment in the Fund, please refer to the current prospectus.

FIXED INCOME

119

Harbor Money Market Fund

FUND SUMMARY—April 30, 2006 (Unaudited)

INSTITUTIONAL CLASS

Fund #: 015

Cusip: 411511405

Ticker: HARXX

Inception Date: 12-29-1987

RETIREMENT CLASS

Fund #: 215

Cusip: 411511660

Ticker: HRMXX

Inception Date: 11-01-2002

PORTFOLIO STATISTICS


	Portfolio	Benchmark

Number of Holdings	38	1
Total Net Assets (000s)	$118,241	N/A
Yield to Maturity	4.7%	4.7%
Weighted Average Maturity	31.9 days	3 mo.
Weighted Average Duration	0.1 years	0.2 years
Weighted Average Credit Quality	AAA	AAA

CREDIT QUALITY (% of investments)

PERFORMANCE

GROWTH OF A $10,000 INVESTMENT

For the period 05-01-1996 through 04-30-2006

The graph compares a $10,000 investment in the Fund with the performance of the Merrill Lynch 3-Month U.S. T-Bill Index. The Fund’s performance includes the reinvestment of all dividend and capital gain distributions.

You can obtain performance data current to the most recent month end (available within seven business days after the most recent month end) by calling 1-800-422-1050 or visiting www.harborfund.com.

TOTAL RETURNS

For the periods ended 04-30-2006


								Average Annual
														Final Value
		6			1			5			10			of a $10,000
		Months			Year			Years			Years			Investment

Harbor Money Market Fund

	Institutional Class		2.04	%		3.60	%		1.97	%		3.63	%	$	14,291
	Retirement Class		1.91			3.35			1.57			3.30			13,839

Comparative Index

	Merrill Lynch 3-Month U.S. T-Bill		2.06	%		3.68	%		2.23	%		3.82	%	$	14,551

Current Yield for Periods Ended 03-31-2006

Institutional Class		7 Days: 4.35% 30 Days: 4.30%
Retirement Class		7 Days: 4.10 30 Days: 4.01

The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemption of Fund shares. From time to time, the Fund’s adviser has voluntarily waived a portion of its management fee and/or absorbed Fund expenses, which has resulted in higher returns. Without these waivers, the returns would have been lower. Any existing waivers may be discontinued at any time without notice. Current yield excludes gains and losses as defined by the Securities and Exchange Commission. The current yield more closely reflects the current earnings of the Fund than the total return. The performance of the Retirement Class shares prior to 11-01-2002 is based on the Fund’s Institutional Class shares’ performance, restated for the higher expense ratio of the Retirement Class.

FIXED INCOME

120

Harbor Money Market Fund

FUND SUMMARY—Continued

INSTITUTIONAL CLASS

Expense Ratio: 0.34%

Total Net Assets (000s):

$113,948

RETIREMENT CLASS

Expense Ratio: 0.59%

Total Net Assets (000s):

$4,293

FEES AND EXPENSE EXAMPLE

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2005 through April 30, 2006.

Actual Expenses

The first line of the table below provides information about actual account values and actual expenses for each share class. You may use the information in this the respective class line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line of the respective class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes


	Beginning Account		Ending Account
	Value		Value		Expenses Paid During
	(November 1, 2005)		(April 30, 2006)		Period*

Institutional Class
Actual	$	1,000.00	$	1,020.38	$	1.71
Hypothetical (5% return)		1,000.00		1,023.00		1.71

Retirement Class
Actual	$	1,000.00	$	1,019.15	$	2.96
Hypothetical (5% return)		1,000.00		1,021.76		2.96


*	Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

FIXED INCOME

121

Harbor Money Market Fund

PORTFOLIO OF INVESTMENTS—April 30, 2006 (Unaudited)

Total Investments (% of net assets)

(Excludes net cash of 1.2%)


Commercial Paper		69.0
Bank Obligations		22.0
Asset-Backed Securities		7.5
U.S. Government Agencies		0.2
Repurchase Agreements		0.1


ASSET-BACKED SECURITIES—7.5%
Principal
Amount				Value
(000s)				(000s)

		Capital Auto Receivables Assets Series 2006-1 Cl. A1
$	1,335		4.642%—02/15/2007¹	$	1,335
		GE Equipment Small Ticket LLC
			Series 2005-1A Cl. A1
	359		3.994%—09/22/2006¹		359
		Honda Auto Receivables Owner Trust
			Series 2005-6 Cl. A1
	1,241		4.512%—12/18/2006		1,241
		Nissan Auto Lease Trust
			Series 2005-A Cl. A1
	717		4.271%—11/15/2006		716
		Nissan Auto Receivables Trust
			Series 2006-A Cl. A1
	1,777		4.663%—02/15/2007		1,777
			Series 2006-B Cl. A1
	2,500		5.081%—05/15/2007		2,500

					4,277

		Volkswagen Auto Loan Trust
			Series 2005 1 Cl. A1
	890		4.370%—11/20/2006		890

TOTAL ASSET-BACKED SECURITIES (Cost $8,818)					8,818


BANK OBLIGATIONS—22.0%
		Barclays Bank plc
	5,000		4.790%—05/22/2006	5,000
		CitiBank
	5,000		5.030%—07/24/2006	5,000
		Deutsche Bank AG
	5,000		4.760%—05/30/2006	5,000
		Toronto Dominion Bank
	5,000		4.755%—05/31/2006	5,000
		Wells Fargo Bank
	6,000		4.760%—05/01/2006	6,000

TOTAL BANK OBLIGATIONS (Cost $26,000)				26,000


COMMERCIAL PAPER—69.0%
		Abbey National LLC
	6,000		4.890%—06/19/2006	5,960
		ABN AMRO North America
	5,000		4.740%—05/08/2006	4,995
		ANZ Inc.
	6,500		4.935%—06/27/2006	6,449
		BMW Capital Corp.
	5,300		4.800%—05/01/2006	5,300
		CBA Finance Inc.
	3,000		4.650%—05/03/2006	2,999
	2,400		4.670%—05/22/2006	2,394
	1,000		4.910%—06/14/2006	994

				6,387

		Chariot Funding LLC
	5,200		4.760%—05/09/2006	5,195
		Charta Corp. Yrs. 3&4
	3,750		4.860%—05/19/2006	3,741
		Danske Corp.
	3,000		4.900%—05/22/2006	2,992
		HBOS Treasury Services plc
	3,300		4.680%—05/18/2006	3,293
	1,500		4.700%—05/30/2006	1,494
	1,000		4.730%—06/02/2006	996

				5,783

		Lloyds Bank plc
	5,500		4.890%—06/19/2006	5,464
		Royal Bank of Scotland plc
	6,000		4.750%—05/08/2006	5,995
		Societe Generale North America Inc.
	4,300		4.710%—05/22/2006	4,288
	1,000		4.810%—06/12/2006	994

				5,282

		Svenska Handelsbanken Ab
	2,000		4.775%—06/14/2006	1,988
	3,000		4.810%—05/15/2006	2,994
	2,000		4.935%—06/27/2006	1,984

				6,966

		UBS Finance Inc.
	5,500		4.820%—05/01/2006	5,500
		WestpacTrust Securities New Zealand Ltd.
	3,000		4.685%—05/24/2006	2,991
	1,300		4.900%—05/22/2006	1,296
	1,300		4.950%—06/15/2006	1,292

				5,579

TOTAL COMMERCIAL PAPER (Cost $81,588)				81,588


REPURCHASE AGREEMENTS—0.1%
(Cost $96)
	96	Repurchase Agreement with State Street Corp. dated April 28, 2006 due May 1, 2006 at 4.250% collateralized by a U.S. Treasury Bond (market value $98)	96


U.S. GOVERNMENT AGENCIES—0.2%
(Cost $298)
		Federal National Mortgage Association
	300		4.831%—06/19/2006		298

TOTAL INVESTMENTS—98.8% (Cost $116,800)²					116,800
CASH AND OTHER ASSETS, LESS LIABILITIES—1.2%					1,441

TOTAL NET ASSETS—100.0%				$	118,241


1	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. The Fund has no right to demand registration of these securities. These securities are priced by an independent pricing service selected by the adviser (Harbor Capital Advisors, Inc.) and is considered to be liquid under procedures established by the Board of Trustees. At April 30, 2006, these securities were valued at $1,695 or 1.43% of net assets.

2	The aggregate identified cost on a tax basis is the same.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

122

Harbor Fund Income Funds

STATEMENT OF ASSETS AND LIABILITIES—April 30, 2006 (Unaudited)

(All amounts in Thousands, except per share amounts)


			Harbor		Harbor			Harbor			Harbor			Harbor
			High-Yield Bond		Bond			Real Return			Short Duration			Money Market

ASSETS
Investments, at identified cost*			$	30,057	$	2,397,263		$	12,020		$	59,436		$	116,800

Investments, at value			$	30,420	$	2,135,717		$	11,557		$	56,564		$	116,800
Repurchase agreements				299		247,436			422			2,645			—
Cash				—		82			1			1			1
Foreign currency, at value (cost: $0; $6,540; $20; $0; $0)				—		6,537			20			—			—
Receivables for:
	Investments sold			176		482,049			1,260			9,962			—
	Capital shares sold			170		4,531			106			278			1,525
	Dividends			6		—			—			—			—
	Interest			651		6,597			71			261			134
	Variation margin on futures contracts			—		1,355			—			—			—
	Written options			—		47			—			—			—
Unrealized appreciation on forward volatility options				—		35			—			—			—
Prepaid fund insurance				1		9			—			1			1
Other assets				—		1			1			10			—

		Total Assets		31,723		2,884,396			13,438			69,722			118,461

LIABILITIES
Payables for:
	Investments purchased			452		783,925			5,040			9,962			—
	Capital shares reacquired			8		2,576			—			139			187
	Dividends to shareholders			—		—			—			—			4
	Written options, at value (premiums received $0; $4,230; $0; $0; $0)			—		4,056			—			—			—
	Swap agreements (proceeds $0; $488; $0; $0; $0)			—		1,469			—			—			—
	Interest on swap agreements			—		122			—			—			—
	Open forward currency contracts			—		4,145			17			213			—
	Variation margin on futures contracts			—		66			—			—			—
Accrued expenses:
	Management fees			11		783			3			9			16
	12b-1 fees			1		7			—			—			1
	Trustee fees			1		6			—			1			2
	Transfer agent fees			2		90			—			2			7
	Other			3		34			—			6			3
	TBA sale commitments at value			—		2,532			—			—			—

		Total Liabilities		478		799,811			5,060			10,332			220

NET ASSETS			$	31,245	$	2,084,585		$	8,378		$	59,390		$	118,241

Net Assets Consist of:
	Paid-in capital		$	30,351	$	2,116,594		$	8,521		$	69,022		$	118,206
	Undistributed/(overdistributed) net investment income			150		15,885			29			54			45
	Accumulated net realized gain/ (loss)			82		(17,276	)		(114	)		(9,247	)		(10	)
	Unrealized appreciation/(depreciation) of investments and translation of assets and liabilities in foreign currencies			662		(15,152	)		(41	)		(226	)		—
	Unrealized appreciation/ (depreciation) of futures and forward contracts			—		(15,466	)		(17	)		(213	)		—

			$	31,245	$	2,084,585		$	8,378		$	59,390		$	118,241

NET ASSET VALUE PER SHARE¹:
Institutional Class
Net assets			$	26,964	$	2,050,312		$	7,390		$	57,606		$	113,948
Shares of beneficial interest²				2,454		178,057			753			7,043			113,948
Net asset value per share			$	10.99	$	11.51		$	9.82		$	8.18		$	1.00
Retirement Class
Net assets			$	2	$	34,273		$	988		$	1,784		$	4,293
Shares of beneficial interest²				—		2,978			101			218			4,293
Net asset value per share			$	11.00	$	11.51		$	9.82		$	8.17		$	1.00
Investor Class
Net assets			$	4,279		N/A			N/A			N/A			N/A
Shares of beneficial interest²				389		N/A			N/A			N/A			N/A
Net asset value per share			$	10.99		N/A			N/A			N/A			N/A


*	Including repurchase agreements and short-term investments.

1	Per share amounts can be recalculated when total net assets and shares of beneficial interest are not rounded to thousands.

2	Par value $ 0.01 (unlimited authorizations).

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

123

Harbor Fixed Income Funds

STATEMENT OF OPERATIONS—Six Months Ended April 30, 2006 (Unaudited)

(All amounts in Thousands)


			Harbor			Harbor			Harbor			Harbor			Harbor
			High-Yield Bond			Bond			Real Return¹			Short Duration			Money Market

Investment Income:
	Dividends		$	23		$	19		$	—		$	—		$	—
	Interest			1,266			49,243			86			1,255			2,760
	Foreign taxes withheld			(1	)		—			—			—			—

	Total Investment Income			1,288			49,262			86			1,255			2,760
Operating Expenses:
	Management fees			100			5,030			13			86			187
	12b-1 fees:
		Retirement Class		—			41			1			2			5
		Investor Class		5			N/A			N/A			N/A			N/A
	Shareholder communications			1			179			40			7			17
	Custodian fees			51			183			10			31			28
	Transfer agent fees:
		Institutional Class		8			545			1			15			33
		Retirement Class		—			9			—			—			1
		Investor Class		4			N/A			N/A			N/A			N/A
	Professional fees			1			39			2			1			2
	Trustees’ fees and expenses			—			11			—			—			1
	Registration fees			41			66			48			22			19
	Miscellaneous			—			20			—			—			3

		Total operating expenses		211			6,123			115			164			296
	Management fees waived			(22	)		(204	)		(1	)		(28	)		(75	)
	Other expenses waived			(40	)		—			(98	)		(23	)		—
	Other expense reimbursements and reductions (Note 4)			—			(10	)		—			(1	)		(4	)

	Net operating expenses			149			5,909			16			112			217
	Interest expense on reverse repurchase agreements			—			—			—			(7	)		—

Net Investment Income/(Loss)				1,139			43,353			70			1,136			2,543
Realized and Unrealized Gain/(Loss) on Investment Transactions:
	Net realized gain/(loss) on:
		Investments		84			2,174			(108	)		(299	)		—
		Foreign currency transactions		—			(9,792	)		(6	)		91			—
		Swap agreements		—			(498	)		—			—			—
		Futures contracts		—			(9,573	)		—			10			—
		Written options		—			1,155			—			—			—
	Change in net unrealized appreciation/(depreciation) of:
		Investments		351			3,700			(24	)		662			—
		Swap agreements		—			499			—			—			—
		Futures contracts		—			(1,512	)		—			(10	)		—
		Forward currency contracts		—			(3,946	)		(17	)		(269	)		—
		Translation of assets and liabilities in foreign currencies		—			(4,216	)		(17	)		(264	)		—

	Net gain/(loss) on investment transactions			435			(22,009	)		(172	)		(79	)		—

	Net Increase/(Decrease) in Net Assets Resulting from Operations		$	1,574		$	21,344		$	(102	)	$	1,057		$	2,543


1	Commenced operations December 1, 2005.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

124

[THIS PAGE INTENTIONALLY LEFT BLANK]

FIXED INCOME

125

Harbor Fixed Income Funds

STATEMENT OF CHANGES IN NET ASSETS

(All amounts in Thousands)


			Harbor
			High-Yield Bond

			November 1,			November 1,
			2005			2004
			through			through
			April 30,			October 31,
			2006			2005

			(Unaudited)
INCREASE/(DECREASE) IN NET ASSETS:
Operations:
	Net investment income/(loss)		$	1,139		$	4,714
	Net realized gain/(loss) on investments			84			1,172
	Net unrealized appreciation/(depreciation) of investments			351			(3,491	)

		Net increase/(decrease) in net assets resulting from operations		1,574			2,395

Distributions to Shareholders:
	Net investment income:
		Institutional Class		(1,072	)		(4,242	)
		Retirement Class		—			—
		Investor Class		(143	)		(225	)
	Net realized gain on investments:
		Institutional Class		(100	)		(885	)
		Retirement Class		—			—
		Investor Class		(13	)		(50	)

		Total distributions to shareholders		(1,328	)		(5,402	)

Net Increase/(Decrease) Derived from Capital Stock Activity				(4,597	)		(31,699	)

	Net increase/(decrease) in net assets			(4,351	)		(34,706	)
Net Assets:
	Beginning of period			35,596			70,302

	End of period*		$	31,245		$	35,596

* Includes undistributed/(over-distributed) net investment income of:			$	150		$	226


a	Commencement of operations.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

126


Harbor						Harbor			Harbor						Harbor
Bond						Real Return			Short Duration						Money Market

November 1,			November 1,			December 1,			November 1,			November 1,			November 1,			November 1,
2005			2004			2005^a			2005			2004			2005			2004
through			through			through			through			through			through			through
April 30,			October 31,			April 30,			April 30,			October 31,			April 30,			October 31,
2006			2005			2006			2006			2005			2006			2005

(Unaudited)						(Unaudited)			(Unaudited)						(Unaudited)
$	43,353		$	60,195		$	70		$	1,136		$	2,683		$	2,543		$	3,082
	(16,534	)		18,365			(114	)		(198	)		(823	)		—			(11	)
	(5,475	)		(56,306	)		(58	)		119			(269	)		—			—

	21,344			22,254			(102	)		1,057			1,591			2,543			3,071

	(35,320	)		(74,790	)		(35	)		(1,625	)		(3,061	)		(2,463	)		(2,990	)
	(540	)		(1,014	)		(6	)		(47	)		(53	)		(80	)		(81	)
	N/A			N/A			N/A			N/A			N/A			N/A			N/A
	(2,503	)		(39,052	)		—			—			—			—			—
	(40	)		(440	)		—			—			—			—			—
	N/A			N/A			N/A			N/A			N/A			N/A			N/A

	(38,403	)		(115,296	)		(41	)		(1,672	)		(3,114	)		(2,543	)		(3,071	)

	138,040			491,839			8,521			5,096			(38,924	)		(5,696	)		3,014

	120,981			398,797			8,378			4,481			(40,447	)		(5,696	)		3,014
	1,963,604			1,564,807			—			54,909			95,356			123,937			120,923

$	2,084,585		$	1,963,604		$	8,378		$	59,390		$	54,909		$	118,241		$	123,937

$	15,885		$	8,392		$	29		$	54		$	590		$	45		$	45

FIXED INCOME

127

Harbor Fixed Income Funds

STATEMENT OF CHANGES IN NET ASSETS—CAPITAL STOCK ACTIVITY

(All amounts and shares in Thousands)


			Harbor						Harbor
			High-Yield Bond						Bond

			November 1,			November 1,			November 1,			November 1,
			2005			2004			2005			2004
			through			through			through			through
			April 30,			October 31,			April 30,			October 31,
			2006			2005			2006			2005

			(Unaudited)						(Unaudited)
AMOUNT ($)
Institutional Class:
	Net proceeds from sale of shares		$	4,384		$	14,719		$	381,782		$	744,498
	Net proceeds from redemption fees			1			21			—			—
	Reinvested in payment of distributions			954			2,799			32,540			101,107
	Cost of shares reacquired			(10,139	)		(12,874	)		(278,915	)		(368,762	)
	Cost of shares reacquired through in-kind redemptions			—			(37,001	)		—			—

		Net increase/(decrease) in net assets	$	(4,800	)	$	(32,336	)	$	135,407		$	476,843

Retirement Class:
	Net proceeds from sale of shares		$	1		$	2		$	12,981		$	22,905
	Net proceeds from redemption fees			—			—			—			—
	Reinvested in payment of distributions			—			—			581			1,454
	Cost of shares reacquired			(1	)		—			(10,929	)		(9,363	)

		Net increase/(decrease) in net assets	$	—		$	2		$	2,633		$	14,996

Investor Class:
	Net proceeds from sale of shares		$	371		$	1,390
	Net proceeds from redemption fees			—			3
	Reinvested in payment of distributions			154			273			Not			Not
	Cost of shares reacquired			(322	)		(1,031	)		Applicable			Applicable

		Net increase/(decrease) in net assets	$	203		$	635

SHARES
Institutional Class:
	Shares sold			400			1,306			32,861			62,475
	Shares issued in reinvestment of distributions			88			250			2,818			8,564
	Shares reacquired			(925	)		(1,153	)		(24,012	)		(31,020	)
	Shares reacquired through in-kind redemptions			—			(3,373	)		—			—

	Net increase/(decrease) in shares outstanding			(437	)		(2,970	)		11,667			40,019
	Beginning of period			2,891			5,861			166,390			126,371

		End of period		2,454			2,891			178,057			166,390

Retirement Class:
	Shares sold			—			—			1,115			1,936
	Shares issued in reinvestment of distributions			—			—			51			123
	Shares reacquired			—			—			(941	)		(794	)

	Net increase/(decrease) in shares outstanding			—			—			225			1,265
	Beginning of period			—			—			2,753			1,488

		End of period		—			—			2,978			2,753

Investor Class:
	Shares sold			34			123
	Shares issued in reinvestment of distributions			14			25
	Shares reacquired			(30	)		(92	)		Not			Not

	Net increase/(decrease) in shares outstanding			18			56			Applicable			Applicable
	Beginning of period			371			315

		End of period		389			371


a	Commencement of operations.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

128


Harbor			Harbor						Harbor
Real Return			Short Duration						Money Market

December 1,			November 1,			November 1,			November 1,			November 1,
2005^a			2005			2004			2005			2004
through			through			through			through			through
April 30,			April 30,			October 31,			April 30,			October 31,
2006			2006			2005			2006			2005

(Unaudited)			(Unaudited)						(Unaudited)
$	7,613		$	18,226		$	28,789		$	127,887		$	212,573
	—			—			—			—			—
	37			1,582			2,597			2,442			2,961
	(135	)		(14,958	)		(70,446	)		(136,422	)		(213,055	)
	—			—			—			—			—

$	7,515		$	4,850		$	(39,060	)	$	(6,093	)	$	2,479

$	1,000		$	511		$	299		$	1,183		$	1,440
	—			—			—			—			—
	6			47			53			80			81
	—			(312	)		(216	)		(866	)		(986	)

$	1,006		$	246		$	136		$	397		$	535

	Not			Not			Not			Not			Not
	Applicable			Applicable			Applicable			Applicable			Applicable
	763			2,220			3,459			127,887			212,574
	4			193			313			2,442			2,961
	(14	)		(1,824	)		(8,484	)		(136,422	)		(213,055	)
	—			—			—			—			—

	753			589			(4,712	)		(6,093	)		2,480
	—			6,454			11,166			120,041			117,561

	753			7,043			6,454			113,948			120,041

	100			62			36			1,183			1,440
	1			5			7			80			81
	—			(38	)		(26	)		(866	)		(987	)

	101			29			17			397			534
	—			189			172			3,896			3,362

	101			218			189			4,293			3,896

	Not			Not			Not			Not			Not
	Applicable			Applicable			Applicable			Applicable			Applicable

FIXED INCOME

129

Harbor Fixed Income Funds

Financial Highlights

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR HIGH-YIELD BOND FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003^c

		(Unaudited)
Net asset value beginning of period		$	10.91		$	11.38		$	11.10		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		.39	^d		.77	^d		.75	^d		.56	^d
	Net realized and unrealized gains/(losses) on investments		.13			(.42	)		.30			1.03

Total from investment operations			.52			.35			1.05			1.59

Less Distributions:
	Dividends from net investment income		(.40	)		(.68	)		(.82	)		(.49	)
	Distributions from net realized capital gains^a		(.04	)		(.15	)		—			—

Total distributions			(.44	)		(.83	)		(.82	)		(.49	)
Proceeds from redemption fees			—	^k		.01			.05			—	^k

Net asset value end of period			10.99			10.91			11.38			11.10
Net assets end of period (000s)		$	26,951		$	31,547		$	66,715		$	57,727

Ratios and Supplemental Data (%):
	Total return		4.85	%^e,f		3.24	% ^e		10.93	% ^e		16.16	% ^e,f
	Ratio of operating expenses to average net assets^b		.85	^d,g		.82	^d		.85	^d		.93	^d,g
	Ratio of operating expenses not imposed to average net assets		.37	^g		.09			.09			.47	^g
	Ratio of operating expenses net of all offsets to average net assets		.85	^g		.82	^d		.85	^d		.93	^d,g
	Ratio of interest/dividend expenses to average net assets		—			—			—			—
	Ratio of net investment income/(loss) to average net assets		6.80	^d,g		6.67	^d		6.85	^d		6.63	^d,g
	Portfolio turnover		25	^f		42			109			82	^f


HARBOR BOND FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	11.61		$	12.24		$	11.89		$	11.98		$	12.05		$	11.00
Income from Investment Operations:
	Net investment income/(loss)		.18	^d		.45	^d		.16	^d		.41	^d		.50	^d		.56	^d
	Net realized and unrealized gains/(losses) on investments		(.06	)		(.28	)		.68			.36			.17			1.08

Total from investment operations			.12			.17			.84			.77			.67			1.64

Less Distributions:
	Dividends from net investment income		(.21	)		(.50	)		(.23	)		(.60	)		(.47	)		(.52	)
	Distributions from net realized capital gains^a		(.01	)		(.30	)		(.26	)		(.26	)		(.27	)		(.07	)

Total distributions			(.22	)		(.80	)		(.49	)		(.86	)		(.74	)		(.59	)
Proceeds from redemption fees			N/A			N/A			N/A			N/A			N/A			N/A

Net asset value end of period			11.51			11.61			12.24			11.89			11.98			12.05
Net assets end of period (000s)		$	2,050,312		$	1,931,651		$	1,546,602		$	1,528,285		$	1,369,931		$	1,036,552

Ratios and Supplemental Data (%):
	Total return		1.05	%^c,f		1.42	%^e		6.59	%^e		6.57	%^e		5.87	%^e		15.35	%^e
	Ratio of operating expenses to average net assets^b		.58	^d,g		.58	^d		.57	^d		.58	^d		.58	^d		.56	^d
	Ratio of operating expenses not imposed to average net assets		.02	^g		.02			.03			.06			.08			.22
	Ratio of operating expenses net of all offsets to average net assets		.58	^d,g		.58	^d		.57	^d		.58	^d		.58	^d		.56	^d
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		3.20	^d,g		3.39	^d		2.21	^d		3.43	^d		4.37	^d		5.50	^d
	Portfolio turnover		181	^f		332			311			221			293			531

See page 134 for notes to the Fixed Income Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

130


Retirement Class													Investor Class

	6-Month			Year Ended October 31									6-Month			Year Ended October 31
	Period Ended												Period Ended
	April 30, 2006			2005			2004			2003^c			April 30, 2006			2005			2004			2003^c

	(Unaudited)												(Unaudited)
	$	10.91		$	11.38		$	11.10		$	10.00		$	10.91		$	11.39		$	11.11		$	10.00
		.41	^d		1.24	^d		(.02	) ^d		.47	^d		.35	^d		.70	^d		.62	^d		.50	^d
		.11			(.90	)		1.07			1.10			.14			(.40	)		.36			1.07

		.52			.34			1.05			1.57			.49			.30			.98			1.57

		(.39	)		(.66	)		(.79	)		(.47	)		(.38	)		(.63	)		(.77	)		(.46	)
		(.04	)		(.15	)		—			—			(.03	)		(.15	)		—			—

		(.43	)		(.81	)		(.79	)		(.47	)		(.41	)		(.78	)		(.77	)		(.46	)
		—	^k		—	^k		.02			—	^k		—	^k		—	^k		.07			—	^k

		11.00			10.91			11.38			11.10			10.99			10.91			11.39			11.11
	$	2		$	2		$	1		$	7		$	4,277		$	4,047		$	3,586		$	2,215

		4.78	%^f,g		3.05	% ^e		10.49	% ^e		16.12	% ^e,f		4.65	%^e,f		2.71	% ^e		10.41	% ^e		15.93	% ^e,f
		1.08	^d,g		—	ⁱ		1.01	^d		1.08	^d,g		1.27	^d,g		1.25	^d		1.27	^d		1.29	^d,g
		.37	^g		—			.15			.47	^g		.37	^g		.09			.09			.47	^g
		1.08	^d,g		—	ⁱ		1.01	^d		1.08	^d,g		1.27	^d,g		1.25	^d		1.27	^d		1.29	^d,g
		—			—			—			—			—			—			—			—
		6.55	^d,g		—	ⁱ		7.00	^d		7.00	^d,g		6.40	^d,g		6.26	^d		6.37	^d		6.73	^d,g
		25	^f		42			109			82	^f		25	^f		42			109			82	^f


Retirement Class

	6-Month			Year Ended October 31
	Period Ended
	April 30, 2006			2005			2004			2003^h

	(Unaudited)
	$	11.61		$	12.24		$	11.89		$	11.98
		.18	^d		.46	^d		.32	^d		.55	^d
		(.07	)		(.31	)		.49			.19

		.11			.15			.81			.74

		(.20	)		(.48	)		(.20	)		(.57	)
		(.01	)		(.30	)		(.26	)		(.26	)

		(0.21	)		(.78	)		(.46	)		(.83	)
		N/A			N/A			N/A			N/A

		11.51			11.61			12.24			11.89
	$	134,273		$	31,953		$	18,205		$	10,463

		0.93	%^f,g		1.18	% ^e		6.33	% ^e		6.40	%^e
		.83	^d,g		.83	^d		.81	^d		.83	^d
		.02	^g		.02			.04			.06
		.83	^d,g		.83	^d		.81	^d		.83	^d
		—			—			—			—
		3.04	^d,g		3.17	^d		1.94	^d		2.67	^d
		181	^f		332			311			221

FIXED INCOME

131

Harbor Fixed Income Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR REAL RETURN FUND
		Institutional Class			Retirement Class

		5-Month			5-Month
		Period Ended			Period Ended
		April 30, 2006^j			April 30, 2006^j

		(Unaudited)			(Unaudited)
Net asset value beginning of period		$	10.00		$	10.00
Income from Investment Operations:
	Net investment income/(loss)		.11	^d		.08	^d
	Net realized and unrealized gains/(losses) on investments		(.22	)		(.20	)

Total from investment operations			(.11	)		(.12	)

Less Distributions:
	Dividends from net investment income		(.07	)		(.06	)
	Distributions from net realized capital gains^a		—			—

Total distributions			(.07	)		(.06	)
Proceeds from redemption fees			N/A			N/A

Net asset value end of period			9.82			9.82
Net assets end of period (000s)		$	7,404		$	990

Ratios and Supplemental Data (%):
	Total return		(1.08	)%^e,f		(1.16	)%^e
	Ratio of operating expenses to average net assets^b		.57	^d,g		.81	^d,g
	Ratio of operating expenses not imposed to average net assets		3.88	^g		3.88	^d,g
	Ratio of operating expenses net of all offsets to average net assets		.57	^d,g		.81	^d,g
	Ratio of interest/dividend expenses to average net assets		—			—
	Ratio of net investment income/(loss) to average net assets		2.94	^d,g		1.98	^d,g
	Portfolio turnover		169	^f		169	^f


HARBOR SHORT DURATION FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	8.27		$	8.41		$	8.57		$	8.69		$	8.69		$	8.51
Income from Investment Operations:
	Net investment income/(loss)		.16	^d		.35	^d		.26	^d		.24	^d		.30	^d		.45	^d
	Net realized and unrealized gains/(losses) on investments		(.01	)		(.17	)		(.14	)		(.10	)		.01			.19

Total from investment operations			.15			.18			.12			.14			.31			.64

Less Distributions:
	Dividends from net investment income		(.24	)		(.32	)		(.28	)		(.26	)		(.31	)		(.46	)
	Distributions from net realized capital gains^a		—			—			—			—			—			—

Total distributions			(.24	)		(.32	)		(.28	)		(.26	)		(.31	)		(.46	)
Proceeds from redemption fees			N/A			N/A			N/A			N/A			N/A			N/A

Net asset value end of period			8.18			8.27			8.41			8.57			8.69			8.69
Net assets end of period (000s)		$	57,813		$	53,353		$	93,910		$	109,411		$	153,074		$	125,959

Ratios and Supplemental Data (%):
	Total return		1.84	%^c,f		2.17	%^e		1.43	%^e		1.70	%^e		3.67	%^e		7.73	%^e
	Ratio of operating expenses to average net assets^b		.39	^d,g		.39	^d		.31	^d		.36	^d		.31	^d		.28	^d
	Ratio of operating expenses not imposed to average net assets		.19	^g		.12			.14			.11			.13			.20
	Ratio of operating expenses net of all offsets to average net assets		.39	^d,g		.39	^d		.31	^d		.36	^d		.31	^d		.27	^d
	Ratio of interest/dividend expenses to average net assets		.02	^g		.01			.01			—			—			—
	Ratio of net investment income/(loss) to average net assets		3.98	^d,g		3.41	^d		2.65	^d		2.85	^d		3.44	^d		5.35	^d
	Portfolio turnover		60	^f		159			324			333			154			246

See page 134 for notes to the Fixed Income Funds Financial Highlights.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

132


Retirement Class

	6-Month			Year Ended October 31
	Period Ended
	April 30, 2006			2005			2004			2003^h

	(Unaudited)
	$	8.26		$	8.41		$	8.57		$	8.69
		.15	^d		.33	^d		9.80	^d		(9.26	)^d
		(.01	)		(.18	)		(9.69	)		9.39

		.14			.15			.11			.13

		(.23	)		(.30	)		(.27	)		(.25	)
		—			—			—			—

		(.23	)		(.30	)		(.27	)		(.25	)
		N/A			N/A			N/A			N/A

		8.17			8.26			8.41			8.57
	$	1,790		$	1,556		$	1,446		$	—

		1.73	%^e,f		1.82	%^e		1.24	%^e		1.39	%^e
		.64	^d,g		.64	^d		.55	^d		.59	^d
		.19	^g		.12			.15			.11
		.64	^d,g		.64	^d		.55	^d		.59	^d
		—			—			—			—
		3.88	^d,g		3.20	^d		2.48	^d		2.70	^d
		60	^f		159			324			333

FIXED INCOME

133

Harbor Fixed Income Funds Financial Highlights—Continued

SELECTED PER SHARE DATA FOR THE PERIODS PRESENTED


HARBOR MONEY MARKET FUND
		Institutional Class

		6-Month			Year Ended October 31
		Period Ended
		April 30, 2006			2005			2004			2003			2002			2001

		(Unaudited)
Net asset value beginning of period		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00		$	1.00
Income from Investment Operations:
	Net investment income/(loss)		.02	^d		.03	^d		—			—			.02	^d		.05	^d
	Net realized and unrealized gains/(losses) on investments		—			—			—			—			—			—

Total from investment operations			.02			.03			—			—			.02			.05

Less Distributions:
	Dividends from net investment income		(.02	)		(.03	)		—			—			(.02	)		(.05	)
	Distributions from net realized capital gains^a		—			—			—			—			—			—

Total distributions			(.02	)		(.03	)		—			—			(.02	)		(.05	)
Proceeds from redemption fees			N/A			N/A			N/A			N/A			N/A			N/A

Net asset value end of period			1.00			1.00			1.00			1.00			1.00			1.00
Net assets end of period (000s)		$	113,948		$	120,041		$	117,561		$	126,347		$	156,446		$	168,834

Ratios and Supplemental Data (%):
	Total return		2.04	%^e,f		2.55	%^e		.94	%^e		.88	%^e		1.59	%^e		4.83	%^e
	Ratio of operating expenses to average net assets^b		.34	^d,g		.35	^d		.29	^d		.36	^d		.36	^d		.38	^d
	Ratio of operating expenses not imposed to average net assets		.12	^g		.12			.16			.13			.12			.12
	Ratio of operating expenses net of all offsets to average net assets		.34	^d,g		.35	^d		.29	^d		.36	^d		.36	^d		.38	^d
	Ratio of interest/dividend expenses to average net assets		—			—			—			—			—			—
	Ratio of net investment income/(loss) to average net assets		4.80	^d,g		2.52	^d		.94	^d		.89	^d		1.58	^d		4.60	^d
	Portfolio turnover		N/A			N/A			N/A			N/A			N/A			N/A


a	Includes both short-term and long-term capital gains.

b	Percentage does not reflect reduction for credit balance arrangements from custodian. (See Note 4 to Financial Statements).

c	For the period December 1, 2002 (inception) through October 31, 2003.

d	Reflects the Adviser’s waiver of a portion of its management fees and/or other operating expenses.

e	The total returns would have been lower had certain expenses not been waived during the periods shown.

f	Unannualized.

g	Annualized.

h	Commenced operations on November 1, 2002.

i	Assets in this class were too small to incur any income or expense.

j	Commenced operations on December 1, 2005.


k	Less than $0.01.

The accompanying notes are an integral part of the financial statements.

FIXED INCOME

134


Retirement Class

	6-Month			Year Ended October 31
	Period Ended
	April 30, 2006			2005			2004			2003^h

	(Unaudited)
	$	1.00		$	1.00		$	1.00		$	1.00
		.02	^d		.02	^d		—			—
		—			—			—			—

		.02			.02			—			—

		(.02	)		(.02	)		—			—
		—			—			—			—

		(.02	)		(.02	)		—			—
		N/A			N/A			N/A			N/A

		1.00			1.00			1.00			1.00
	$	4,293		$	3,896		$	3,362		$	—

		1.91	%^e,f		2.29	%^e		.60	%^e		—	%
		.59	^d,g		.60	^d		.53	^d		N/A	ⁱ
		.12	^g		.12			.17			N/A	ⁱ
		.59	^d,g		.60	^d		.53	^d		N/A	ⁱ
		—			—			—			—
		3.83	^d,g		2.30	^d		.74	^d		N/A	ⁱ
		N/A			N/A			N/A			N/A

FIXED INCOME

135

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—April 30, 2006 (Unaudited)

(Currency in Thousands)

NOTE 1—ORGANIZATIONAL MATTERS

Harbor Fund (the “Trust”) is registered under the Investment Company Act of 1940, as amended, as an open-ended investment company, consisting of seven domestic equity series: Harbor Capital Appreciation Fund, Harbor Mid Cap Growth Fund, Harbor Small Cap Growth Fund, Harbor Small Company Growth Fund, Harbor Large Cap Value Fund, Harbor Mid Cap Value Fund and Harbor Small Cap Value Fund; two international equity series: Harbor International Fund and Harbor International Growth Fund; and five fixed income series: Harbor High-Yield Bond Fund, Harbor Bond Fund, Harbor Real Return Fund, Harbor Short Duration Fund and Harbor Money Market Fund (individually or collectively referred to as a “Fund” or the “Funds”), respectively.

The Funds of the Trust may offer up to three classes of shares, designated as Institutional Class, Retirement Class, and Investor Class. The shares of each class represent an interest in the same portfolio of investments of the respective Fund and have equal rights to voting, redemptions, dividends, and liquidations, except that certain expenses, subject to the approval of the Trustees, may be applied differently to each class of shares in accordance with current regulations of the Securities and Exchange Commission and the Internal Revenue Service. Shareholders of a class that bears distribution and service expenses under terms of a distribution plan have exclusive voting rights as to that distribution plan.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements. The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements.

Security Valuation

Equity securities (except securities listed on the National Association of Securities Dealers Automated Quotation (“NASDAQ”) system and United Kingdom securities) are valued at the last sale price on a national exchange or system on which they are principally traded on the valuation date. Securities listed on NASDAQ system or a United Kingdom exchange are valued at the official closing price of those securities. In the case of securities for which there were no sales on the valuation day, securities traded principally: (i) on a U.S. exchange, including NASDAQ, will be valued at the mean between the closing bid and asked price; (ii) on a foreign exchange, including United Kingdom securities, will be valued at the official bid price determined as of the close of the primary exchange.

Except for Harbor Money Market Fund, debt securities, other than short-term securities with a remaining maturity of less than sixty days, are valued at prices furnished by a pricing service selected by Harbor Capital Advisors, Inc. (the “Adviser”). The pricing service determines valuations for institutional-size trading units of such debt securities using market information, transactions for comparable securities and various relationships between securities which are generally recognized by institutional traders. Short-term securities with a remaining maturity of less than sixty days are stated at amortized cost which approximates value.

When reliable market quotations are not readily available or when market quotations do not accurately reflect fair value, securities are priced at their fair value, calculated according to procedures adopted by the Board of Trustees, which may include utilizing an independent pricing service. A Fund may use fair-value pricing if the value of some or all of the Fund’s securities have been materially affected by events occurring before the Fund’s pricing time but after the close of the primary markets or exchanges on which the security is traded. This most commonly occurs with foreign securities, but may occur with other securities as well. When fair-value pricing is employed, the prices of securities used by a Fund to calculate its net asset value may differ from market quotations or official closing prices for the same securities which means the Fund may value those securities higher or lower than another fund that uses market quotations or official closing prices.

For the Funds which invest primarily in international equity securities, the fair value pricing procedures recognize that volatility in the U.S. equity markets may cause prices of foreign securities determined at the close of the foreign market or exchange on which the securities are traded to no longer be reliable when the Funds’ net asset values are determined. As a result, many of the international Funds’ foreign equity securities may be valued at their fair value in accordance with the fair value pricing procedures on any given day in an accounting period.

Securities of Harbor Money Market Fund are valued utilizing the amortized cost method as set forth in Rule 2a-7 under the Investment Company Act of 1940, as amended, and the Fund’s Rule 2a-7 procedures.

136

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES—Continued

Futures Contracts

To seek to increase total return or hedge against changes in interest rates, securities prices or currency exchange rates, each Fund (except Harbor Money Market Fund) may purchase and sell various kinds of futures contracts, and purchase and write call and put options on these futures contracts. Harbor Large Cap Value Fund and Harbor High-Yield Bond Fund are not authorized to enter into currency futures contracts and options on such contracts. Harbor International Fund and Harbor International Growth Fund are not authorized to enter into futures contracts on currencies or engage in options transactions with respect to futures contracts for speculative purposes. Futures contracts tend to increase or decrease the Fund’s exposure to the underlying instrument or hedge other Fund investments. Losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts or if the counterparties do not perform under the contracts’ terms. The maximum potential loss on a long futures contract is the U.S. dollar value of the notional amount at the time the contract is opened. The potential loss on a short futures contract is unlimited. Open futures contracts are valued based on the official daily closing price of futures contracts set by the exchange for the purpose of settling margin accounts, which is referred to as the settlement price. See Portfolio of Investments for open futures contracts held as of April 30, 2006.

A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. Upon entering into such a contract, a Fund is required to pledge to the broker an amount of cash, U.S. government securities or other liquid securities equal to the minimum “initial margin” requirements of the exchange. Pursuant to the contract, the Fund agrees to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as “variation margin,” and are recorded by the Fund as unrealized gains or losses. When the contract is closed or expired, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.

Options

Consistent with its investment policies, each Fund (excluding Harbor Money Market Fund) may use options contracts to manage its exposure to the stock and bond markets and to fluctuations in interest rates and currency values. Harbor Large Cap Value Fund and Harbor High-Yield Bond Fund are not authorized to engage in options transactions on currencies. Harbor International Fund and Harbor International Growth Fund are not authorized to engage in options transactions on currencies for speculative purposes. Harbor Bond Fund, Harbor Real Return Fund, and Harbor Short Duration Fund may use options on currencies for cross-hedging purposes. Call options tend to decrease a Fund’s exposure to the underlying instrument. Put options tend to increase a Fund’s exposure to the underlying instrument.

When a Fund purchases an option, the premium paid by the Fund is included in the Fund’s Statement of Assets and Liabilities as an investment and subsequently marked-to-market to reflect the option’s current market value. Purchased options on equity securities are valued at the last sale price on the market on which they are principally traded. Purchased options on futures contracts are valued based on the settlement price for the underlying futures contract. If the purchased option expires, the Fund realizes a loss in the amount of the premium. If the Fund enters into a closing sale transaction, it realizes a gain or loss, depending on whether the proceeds from the sale are greater or less than the cost of the option. If the Fund exercises a call option, the cost of the securities acquired by exercising the call is increased by the premium paid to buy the call. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are decreased by the premium originally paid. The risk associated with purchasing options is limited to the premium originally paid.

When a Fund writes an option, the premium received by the Fund is presented in the Fund’s Statement of Assets and Liabilities as an asset and an equivalent liability. The amount of the liability is subsequently marked-to-market to reflect the current market value of the option written. Written options on equity securities are valued at the last sale price or, in the absence of a sale, the last offering price on the market on which they are principally traded. Written options on futures contracts are valued based on the settlement price for the underlying futures contract. If an option expires on its stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written call option is exercised, the Fund realizes a gain or loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. If a written put option is exercised, the amount of the premium originally received reduces the cost of the security which the Fund purchases upon exercise of the option.

137

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES—Continued

The risk in writing a call option is that the Fund relinquishes the opportunity to profit if the market price of the underlying security increases and the option is exercised. In writing a put option, the Fund assumes the risk of incurring a loss if the market price of the underlying security decreases and the option is exercised. In addition, there is a risk the Fund may not be able to enter into a closing transaction because of an illiquid secondary market, or if the counterparties do not perform under the contracts’ terms. See Note 3 for transactions in written options as of April 30, 2006.

Swap Agreements

To the extent permitted under their respective investment policies, Harbor Bond Fund, Harbor Real Return Fund and Harbor Short Duration Fund may invest in swap agreements which involve the exchange of cash payments based on the specified terms and conditions of such agreements. A swap is a privately negotiated agreement between two parties to exchange cash flows at specified intervals (payment dates) during the agreed-upon life of the contract. The value of each swap is determined by the counterparty to the swap agreement using a methodology which discounts the expected future cash receipts or disbursements related to the swap. The Funds may also enter into interest rate swap agreements which involve the exchange by the Fund with another party of their respective commitments to pay or receive interest, (e.g., an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal). Interest rate swaps are marked-to-market daily. Net market value is reported as an asset or a liability in the Statement of Assets and Liabilities. The cash paid or received on a swap is recognized as realized gains or losses when such a payment is paid or received.

Harbor High-Yield Bond Fund, Harbor Bond Fund, Harbor Real Return Fund and Harbor Short Duration Fund may enter into credit default swap agreements. The “buyer” in a credit default contract is obligated to pay the “seller” a periodic stream of payments over the term of the contract provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or “par value,” of the reference obligation in exchange for the reference obligation. A Fund may be either the buyer or seller in a credit default swap transaction. If a Fund is a buyer and no event of default occurs, the Fund will lose its investment and recover nothing. However, if an event of default occurs, the Fund (if the buyer) will receive the full notional value of the reference obligation that may have little or no value. As a seller, a Fund receives a fixed rate of income throughout the term of the contract, which typically is between six months and three years, provided that there is no default event. If an event of default occurs, the seller must pay the buyer the full notional value of the reference obligation. The maximum exposure to loss of the notional value of credit default swaps outstanding at April 30, 2006 for the Harbor Bond Fund is $21,800. Credit default swap transactions involve greater risks than if a Fund had invested in the reference obligation directly. Credit default contracts outstanding at the period end, if any, are listed after the Fund’s portfolio. The cash paid or received on a credit default swap is recognized as realized gains or losses when such a payment is paid or received. Swaps are marked-to-market daily based upon quotations from market makers and the change in value, if any, is recorded as unrealized gain or loss in the Statement of Operations.

Entering into swap agreements involves, to varying degrees, elements of credit risk, market risk, and interest rate risk in excess of the amount recognized in the Statement of Assets and Liabilities. Such risks involve the possibility that there is not a liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform and that there may be unfavorable changes in market conditions or interest rates.

Inflation-Indexed Bonds

Harbor Real Return Fund invests primarily in inflation-indexed bonds. Harbor Bond Fund and Harbor Short Duration Fund may also invest in inflation-indexed bonds. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted based on the rate of inflation. The interest rate on these bonds is generally fixed at issuance at a rate lower than typical bonds. Over the life of an inflation-indexed bond, however, interest will be paid based on a principal value, which is adjusted for inflation. Any increase in the principal amount of an inflation-indexed bond will be included as interest income, even though investors do not receive their principal until maturity.

TBA/When-Issued Purchase Commitments

Each Fund may enter into TBA (to be announced) and when-issued purchase commitments to purchase securities for a fixed unit price at a future date beyond customary settlement time. Although the unit price for a TBA has been established, the principal value has not been finalized. However, the amount of the commitment will not fluctuate more than 2.0% from the principal amount. The price of a when-issued security and the date when the security will be delivered and paid for are fixed at the time the transaction is negotiated.

138

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES—Continued

The Fund holds, and maintains until the settlement date, cash or liquid securities in an amount sufficient to meet the purchase price. TBA and when-issued purchase commitments may be considered securities in themselves and involve a risk of loss if the value of the security to be purchased declines prior to the settlement date, which risk is in addition to the risk of decline in the value of the Fund’s other assets. Risks may also arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts. Unsettled TBA and when-issued purchase commitments are valued at the current market value of the underlying securities, generally according to the procedures described under “Security Valuation” above.

Although the Fund will generally enter into TBA and when-issued purchase commitments with the intention of acquiring securities for its portfolio, a Fund may dispose of a commitment prior to settlement if the Fund’s subadviser deems it appropriate to do so.

TBA Sale Commitments

Each Fund may enter into TBA sale commitments to hedge portfolio positions or to sell mortgage-backed securities owned under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date.

Unsettled TBA sale commitments are valued at the current market value of the underlying securities, generally according to the procedures described under “Security Valuation” above. The contract is marked-to-market daily and the change in market value is recorded by the Fund as an unrealized gain or loss. If the TBA sale commitment is closed through the acquisition of an offsetting purchase commitment, the Fund realizes a gain or loss on the commitment without regard to any unrealized gain or loss on the underlying security. If the Fund delivers securities under the commitment, the Fund realizes a gain or loss from the sale of the securities based upon the unit price established at the date on which the commitment was entered.

Short Sales

Each Fund, except Harbor International Fund, Harbor International Growth Fund and Harbor Money Market Fund, may engage in short-selling which obligates the Fund to replace the security borrowed by purchasing it at the market price at the time of replacement. Until the security is replaced, the Fund is required to pay to the lender any accrued interest or dividends, and may be required to pay a premium. The Fund would realize a gain if the security declines in price between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund would incur a loss as a result of the short sale if the price of the security increases between those dates. Until the Fund replaces the borrowed security, it will maintain in a segregated account or set aside in the Fund’s records cash or liquid securities sufficient to cover its short position. Short sales involve the risk of an unlimited increase in the market price of a security.

Foreign Forward Currency Contracts

Consistent with its investment policies, each Fund, except Harbor High-Yield Bond Fund and Harbor Money Market Fund, may enter into foreign forward currency contracts to facilitate transactions in foreign securities or as a hedge against either specific transactions or portfolio positions. A foreign forward currency contract is an agreement between two parties to buy and sell currencies at a set price on a future date. The U.S. dollar value of the contracts is determined using forward currency exchange rates supplied by a pricing service selected by the Adviser. The contract is marked-to-market daily and the change in market value is recorded as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value on the open and close date. Losses may arise from changes in the value of the foreign currency, or if the counterparties do not perform under the contract’s terms. The maximum potential loss from such contracts is the aggregate face value in U.S. dollars at the time the contract was opened; however, management of the Fund believes the likelihood of such loss is remote.

Foreign Currency Translations

The accounting records of the Funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars based on the current exchange rates at period end. Purchases and sales of securities are translated into U.S. dollars at the current exchange rate on the respective dates of the transaction. Income and withholding taxes are translated at the prevailing exchange rate when accrued or incurred.

Reported net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of foreign forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement

139

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES—Continued

dates on securities transactions, and the difference between the amount of investment income accrued and tax reclaims receivable and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are not isolated in the Statement of Operations from the effects of changes in market prices of these securities. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Repurchase Agreements

Each Fund may enter into repurchase agreements with certain banks and broker dealers whereby the Fund acquires a security for cash and obtains a simultaneous commitment from the seller to repurchase the security at an agreed upon price and date. The Trust’s custodian takes possession through the federal book-entry system of securities collateralizing repurchase agreements. The value of the underlying assets at the time of purchase is required to be at least equal to the repurchase price to protect the Fund in the event of default by the seller.

Borrowings

Harbor Short Duration Fund may enter into reverse repurchase agreements with third party broker-dealers. The Fund may use reverse repurchase agreements to borrow short term funds. Interest on the value of reverse repurchase agreements issued and outstanding is based upon competitive market rates at the time of issuance. At the time the Fund enters into a reverse repurchase agreement, it establishes and maintains a segregated account with the lender containing liquid high-grade securities having a value not less than the repurchase price, including accrued interest, of the reverse repurchase agreement. Reverse repurchase agreements involve the risk that the market value of the securities sold by a Fund may decline below the repurchase price of the securities and, if the proceeds from the reverse repurchase agreement are invested in securities, that the market value of securities bought may decline below the repurchase price of securities sold. Activity in reverse repurchase agreements by the Harbor Short Duration Fund for the period ended April 30, 2006 is as follows:

Maximum

Average Daily

Average Interest

Balance at End

Average

Amount Outstanding

Rate During

Category of Aggregate Short-Term Borrowings

of Period

Interest Rate

During the Period

the Period

Reverse repurchase agreements with maturity dates of 05/01/2006

N/A

9,011

308

4.49%

Average debt outstanding and average interest rate during the period is calculated based on calendar days.

Securities Transactions

Securities transactions are accounted for on the trade date (the date the order to buy or sell is executed). Realized gains or losses on security transactions are determined on the basis of identified cost for both federal income tax and financial reporting purposes.

Investment Income

Dividends declared are accrued on the ex-dividend date. For Harbor International Fund and Harbor International Growth Fund, certain dividends are recorded after the ex-dividend date, but as soon as the Fund is notified of such dividends. Interest income is accrued daily as earned. Discounts and premiums on fixed income securities purchased are amortized over the life of the respective securities using the effective yield method.

Distribution to Shareholders

Distributions are recorded on the ex-dividend date.

Expenses and Class Allocations

Expenses incurred by the Trust with respect to any two or more Funds are allocated in proportion to the average net assets or the number of shareholders of each Fund, except where allocations of direct expense to each Fund can be otherwise fairly made.

Income, common expenses and realized and unrealized gains/(losses) are determined at the Fund level and allocated daily to each class of shares based on the appropriate net assets of the respective classes. Distribution and service fees, if any, and transfer agent fees are calculated daily at the class level based on the appropriate net assets of each class and the specific expense rate(s) applicable to each class.

140

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES—Continued

Federal Taxes

Each Fund is treated as a separate entity for federal tax purposes. Each Fund’s policy is to meet the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies and to distribute to its shareholders all of its taxable income within the prescribed time. It is also the intention of each Fund to distribute an amount sufficient to avoid imposition of any excise tax under Section 4982 of the Internal Revenue Code. Therefore, no provision has been made for federal taxes on income, capital gains or unrealized appreciation of securities held or excise tax on income and capital gains.

NOTE 3—INVESTMENT PORTFOLIO TRANSACTIONS

Purchases and sales of investments, other than short-term securities, for each Fund for the six-month period ended April 30, 2006 are as follows:


		Purchases				Sales

		U.S.				U.S.
		Government		Other		Government		Other

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund	$	—	$	3,642,970	$	—	$	2,788,402
	Harbor Mid Cap Growth Fund		—		105,279		—		58,634
	Harbor Small Cap Growth Fund		—		213,359		—		261,030
	Harbor Small Company Growth Fund		—		5,306		—		478
	Harbor Large Cap Value Fund		—		179,619		—		42,825
	Harbor Mid Cap Value Fund		—		5,326		—		2,394
	Harbor Small Cap Value Fund		—		505,607		—		277,578
HARBOR INTERNATIONAL EQUITY FUNDS
	Harbor International Fund		—		1,838,783		—		685,904
	Harbor International Growth Fund		—		140,891		—		106,045
HARBOR FIXED INCOME FUNDS
	Harbor High-Yield Bond Fund		—		11,728		—		15,818
	Harbor Bond Fund		2,833,719		658,389		2,905,888		412,380
	Harbor Real Return Fund		24,690		1,068		14,067		—
	Harbor Short Duration Fund		27,525		16,861		16,058		17,957

The Funds may be subject to taxes imposed by countries in which it invests. Such taxes are generally based on income and/or capital gains earned or repatriated. Taxes are accrued and applied to net investment income, net realized gains and unrealized appreciation as such income and/or gains are earned.

Securities Lending

Certain Funds may engage in securities lending. The loans are secured by collateral which is at least equal to the market value of the loaned securities. During the term of the loan, the Fund will continue to receive any interest, dividends or amounts equivalent thereto, on the loaned securities while receiving a fee from the borrower or earning interest on the investment of the cash collateral. Securities lending income is disclosed as such in the Statements of Operations. The collateral for securities on loan is recognized in the Statements of Assets and Liabilities. The cash collateral is maintained on each Fund’s behalf by the lending agent and is invested in the State Street Navigator Securities Lending Prime Portfolio. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the lender securities identical to the loaned securities. The Fund may pay reasonable finders’, administrative and custodial fees in connection with a loan of its securities and may share the interest earned on the collateral with the borrower. The Fund bears the risk of delay in recovery of, or even loss of rights in, the securities loaned should the borrower of the

141

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 3—INVESTMENT PORTFOLIO TRANSACTIONS—Continued

securities fail financially. The market value of securities loaned, and related collateral for securities on loan, at April 30, 2006, by Fund, are as follows:


	Market Value of		Collateral for
Fund	Securities on Loan		Securities on Loan

Harbor Capital Appreciation Fund	$	211,334	$	214,053
Harbor Mid Cap Growth Fund		30,173		30,914
Harbor Large Cap Value Fund		68,893		70,172
Harbor Mid Cap Value Fund		4,126		4,220
Harbor Small Cap Value Fund		589,058		597,139

Written Options

Transactions in written options for the six-month period ended April 30, 2006 are summarized as follows:


		Options Written				Options Written

		Eurodollar Futures				U.S. Treasury Futures

		Number of		Aggregate		Number of			Aggregate
		Contracts		Face Value		Contracts			Face Value

Harbor Bond Fund
	Options outstanding at beginning of period		814	E$	2,035		2,513		$	2,513
	Options opened		1,646		4,115		3,484			3,484
	Options closed		—		—		(4,568	)		(4,568	)

	Open at 04/30/2006		2,460	E$	6,150		1,429		$	1,429


	Options Written						Options Written

	Japanese Yen Futures						Pound Sterling Futures

	Number of			Aggregate			Number of		Aggregate
	Contracts			Face Value			Contracts		Face Value

Options outstanding at beginning of period		3		¥	3,000			38,200,000		£38,200
Options opened		—			—			—		—
Options closed/expired		(3	)		(3,000	)		—		—

Open at 04/30/2006		—		¥	—			38,200,000		£38,200


	Options Written						Options Written

	Swap Options - U.S.						Swap Options - Japanese Yen

	Number of			Aggregate			Number of			Aggregate
	Contracts			Face Value			Contracts			Face Value

Options outstanding at beginning of period		96,100,000		$	44,386			1,500,000,000			¥15,000
Options opened		102,600,000			91,710			10,300,000			10,300
Options closed/expired		(27,600,000	)		(27,600	)		(1,500,000,000	)		(15,000	)

Open at 04/30/2006		1,711,100,000		$	108,496			10,300,000			¥10,300


E$	Eurodollar.

¥	Japanese Yen.

£	Pound Sterling.

NOTE 4—FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser

Harbor Capital Advisors, Inc. (“Harbor Capital”) is an indirect wholly-owned subsidiary of Robeco Groep, N.V. (“Robeco”). Cooperatieve Centrale Raiffeisen-Boevenleenbank B.A. (“Rabobank Nederland”) owns 100% of the shares of Robeco. Harbor Capital is

142

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 4—FEES AND OTHER TRANSACTIONS WITH AFFILIATES—Continued

the Trust’s investment adviser and is also responsible for administrative and other services. Separate advisory agreements for each Fund were in effect during the six-month period ended April 30, 2006. The agreements provide for fees based on an annual percentage rate of average daily net assets as follows:


			Voluntary
		Contractual Rate	Waiver			Actual Rate

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund	0.60%		—	%		0.60	%
	Harbor Mid Cap Growth Fund	0.75		0.04			0.71
	Harbor Small Cap Growth Fund	0.75		—			0.75
	Harbor Small Company Growth Fund	0.75		—			0.75
	Harbor Large Cap Value Fund	0.60		—			0.60
	Harbor Mid Cap Value Fund	0.75		0.31			0.44
	Harbor Small Cap Value Fund	0.75		—			0.75
HARBOR INTERNATIONAL EQUITY FUNDS
	Harbor International Fund	0.75%/0.65%*		—	%		0.74	%
	Harbor International Growth Fund	0.75		—			0.75
HARBOR FIXED INCOME FUNDS
	Harbor High-Yield Bond Fund	0.60%		0.13	%		0.47	%
	Harbor Bond Fund	0.50		0.02			0.48
	Harbor Real Return Fund	0.50		0.02			0.48
	Harbor Short Duration Fund	0.30		0.10			0.20
	Harbor Money Market Fund	0.30		0.12			0.18


*	Effective March 1, 2006 the contractual rate is 0.75% on assets up to $12 billion and 0.65% on assets in excess of $12 billion. For the period January 1, 2006 through February 28, 2006 the Adviser voluntarily agreed to a breakpoint of 0.65% on assets in excess of $12 billion.

Harbor Capital has from time to time voluntarily agreed not to impose a portion of its management fees and to bear a portion of the expenses incurred in the operation of certain Funds in order to limit Fund expenses. Such waivers are reflected on the accompanying Statements of Operations for the respective Funds. Harbor Capital has entered into a contractual expense limitation agreement with Harbor Small Company Growth Fund limiting the total expenses to 0.95%, 1.20%, and 1.38% for the Institutional Class, Retirement Class, and Investor Class, respectively. This contractual expense limitation is effective through February 28, 2007.

Distributor

HCA Securities, Inc. (“HCA Securities”), a wholly-owned subsidiary of Harbor Capital, is the distributor for Harbor Fund shares. Effective November 1, 2002, the Trust adopted distribution plans pursuant to Rule 12b-1 under the 1940 Act with respect to each Fund’s Retirement Class shares and Investor Class shares (collectively the “12b-1 Plans”). Each Fund, pursuant to the 12b-1 Plans, pays HCA Securities compensation at the annual rate of 0.25% of the average daily net assets of Retirement Class shares and of the Investor Class shares. The 12b-1 Plans compensate HCA Securities for the purpose of financing any activity which is primarily intended to result in the sale of Retirement and Investor Class shares of the Funds or for servicing of shareholder accounts in the Retirement and Investor Class shares of the Fund. Such activities include, but are not limited to: printing of prospectuses and statements of additional information and reports for prospective shareholders (i.e., other than existing shareholders); preparation and distribution of advertising material and sales literature; expenses of organizing and conducting sales seminars; supplemental payments to dealers or other institutions such as asset-based sales charges or as payments of service fees under shareholder service arrangements; and costs of administering each 12b-1 Plan.

Amounts payable by a Fund under the 12b-1 Plans need not be directly related to the expenses actually incurred by HCA Securities on behalf of each Fund. The 12b-1 Plans do not obligate the Funds to reimburse HCA Securities for the actual expenses HCA Securities may incur in fulfilling its obligations under the 12b-1 Plans. Thus, even if HCA Securities’ actual expenses exceed the fee payable to HCA Securities at any given time, the Funds will not be obligated to pay more than that fee. If HCA Securities’ expenses are less than the fee it receives, HCA Securities will retain the full amount of the fee.

The fees allocated to each Fund’s respective class are shown on the accompanying Statement of Operations.

143

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 4—FEES AND OTHER TRANSACTIONS WITH AFFILIATES—Continued

Shareholders

On April 30, 2006, Harbor Capital, HCA Securities and Harbor Services Group, Inc. held the following shares of beneficial interest in the Funds:


		Harbor Capital,
		HCA Securities and
		Harbor Services
		Group, Inc.

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund		16
	Harbor Mid Cap Growth Fund		100,817
	Harbor Small Cap Growth Fund		19
	Harbor Small Company Growth Fund		300,020
	Harbor Large Cap Value Fund		13
	Harbor Mid Cap Value Fund		226,010
	Harbor Small Cap Value Fund		11
HARBOR INTERNATIONAL EQUITY FUNDS
	Harbor International Fund		10
	Harbor International Growth Fund		23
HARBOR FIXED INCOME FUNDS
	Harbor High-Yield Bond Fund		11,717
	Harbor Bond Fund		98,924
	Harbor Real Return Fund		302,105
	Harbor Short Duration Fund		51,620
	Harbor Money Market Fund		30,084,805

Transfer Agent

Harbor Services Group, Inc. (f.k.a. Harbor Transfer, Inc.), a wholly-owned subsidiary of Harbor Capital, is the shareholder servicing agent for the Funds. Fees incurred for these transfer agent services are shown on each Fund’s Statement of Operations.

Independent Trustees

The fees and expenses of the Independent Trustees allocated to each Fund are shown on each Fund’s Statement of Operations. The Independent Trustees’ remuneration for all Funds aggregated $158 for the six-month period ended April 30, 2006.

Custodian

Payments to the custodian have been reduced by credit balance arrangements applied to each portfolio. Such reductions are reflected on each Fund’s Statement of Operations for the six-month period ended April 30, 2006. If the Funds had not entered into such arrangements, the Funds could have invested a portion of the assets utilized in connection with credit balance arrangements, if any, in an income-producing asset.

Redemption Fee

A 2.00% redemption fee is charged on shares of the Harbor International Fund and Harbor International Growth Fund that are redeemed within 60 days from their date of purchase. A 1.00% redemption fee is charged on shares of the Harbor High-Yield Bond Fund that are redeemed within nine months from their date of purchase. All redemption fees are recorded by the Funds as paid-in capital. For the six-month period ended April 30, 2006 the redemption fee proceeds are as follows:


Fund	Amount

Harbor International Fund	$	130
Harbor International Growth Fund		12
Harbor High-Yield Bond Fund		1

144

Harbor Fund

NOTES TO FINANCIAL STATEMENTS—Continued

(Currency in Thousands)

NOTE 5—TAX INFORMATION

The identified cost, for tax purposes, of investments owned by each Fund (including earned discount on corporate short-term notes and commercial paper) and their respective gross unrealized appreciation and depreciation at April 30, 2006 are as follows:


				Gross Unrealized					Net Unrealized
									Appreciation/
		Identified Cost		Appreciation		(Depreciation)			(Depreciation)

HARBOR DOMESTIC EQUITY FUNDS
	Harbor Capital Appreciation Fund	$	7,452,593	$	1,767,144	$	(102,444	)	$	1,664,700
	Harbor Mid Cap Growth Fund		137,884		13,270		(2,028	)		11,242
	Harbor Small Cap Growth Fund		620,358		218,602		(12,227	)		206,375
	Harbor Small Company Growth Fund		5,396		444		(120	)		324
	Harbor Large Cap Value Fund		843,406		127,839		(7,916	)		119,923
	Harbor Mid Cap Value Fund		23,696		3,646		(560	)		3,086
	Harbor Small Cap Value Fund		2,513,050		494,069		(57,130	)		436,939
HARBOR INTERNATIONAL EQUITY FUND
	Harbor International Fund		8,123,555		7,137,599		(6,780	)		7,130,819
	Harbor International Growth Fund		196,561		51,613		(815	)		50,798
HARBOR FIXED INCOME FUND
	Harbor High-Yield Bond Fund		30,057		854		(192	)		662
	Harbor Bond Fund		2,397,263		21,306		(35,416	)		(14,110	)
	Harbor Real Return Fund		12,020		52		(93	)		(41	)
	Harbor Short Duration Fund		59,436		112		(338	)		(226	)

145

Harbor Fund

ADDITIONAL INFORMATION (Unaudited)

PROXY VOTING

The Funds have adopted Proxy Voting Policies and Procedures under which the Funds vote proxies relating to securities held by the Funds. A description of the Funds’ Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Fund toll-free at 1-800-422-1050, (ii) on the Funds’ web site at www.harborfund.com, and (iii) on the SEC’s web site at www.sec.gov. In addition, the Funds file Form N-PX, with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. The Funds’ Form N-PX filing is available (i) without charge, upon request, by calling the Funds toll-free at 1-800-422-1050, and (ii) on the SEC’s web site at www.sec.gov.

QUARTERLY PORTFOLIO DISCLOSURES

The Funds each file a complete portfolio of investments with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available (i) without charge, upon request, by calling the Fund toll-free at 1-800-422-1050, (ii) on the Funds’ web site at www.harborfund.com, and (iii) on the SEC’s web site at www.sec.gov. The form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may also be obtained by calling 1-800-SEC-0330.

FACTORS CONSIDERED BY THE TRUSTEES IN APPROVING THE INVESTMENT ADVISORY AGREEMENTS AND SUBADVISORY AGREEMENTS OF CERTAIN FUNDS

The Investment Company Act of 1940 requires that the Investment Advisory and Subadvisory Agreement of each Fund be approved initially, and following an initial two-year term, at least annually, by Harbor Fund’s Board of Trustees, including a majority of the Independent Trustees voting separately.

At an in-person meeting held on November 20 and 21, 2005, the Board of Trustees considered and approved for the first time an Investment Advisory Agreement with Harbor Capital Advisors, Inc. (the “Adviser”) and a Subadvisory Agreement with NorthPointe Capital, LLC (“NorthPointe Capital”) on behalf of Harbor Small Company Growth Fund, a new series of Harbor Fund. At an in-person meeting held on February 12, 13 and 14, 2006, the Board of Trustees considered and approved the continuation of each Investment Advisory and Subadvisory Agreement with respect to the Harbor Capital Appreciation Fund, Harbor Small Cap Growth Fund, Harbor Small Cap Value Fund, Harbor International Fund, Harbor High-Yield Bond Fund and Harbor Bond Fund.¹

In evaluating the Investment Advisory and Subadvisory Agreements, the Trustees reviewed materials furnished by the Adviser and the subadviser to each Fund (each existing subadviser, or in the case of Harbor Small Company Growth Fund, the proposed subadviser, a “Subadviser”), including information about their respective affiliates, personnel, and operations and relied upon their knowledge of the Adviser resulting from their quarterly meetings, periodic telephonic meetings and other communications throughout the year. At the November 20-21, 2005 and February 12-14, 2006 meetings, which had been called for the purpose of considering approval of the Investment Advisory and Subadvisory Agreements and at other meetings during the course of the year, the Trustees, including the Independent Trustees, requested and received materials and presentations relating to Fund performance and the services rendered by the Adviser and each Subadviser. The Trustees also discussed with representatives of the Adviser, at that meeting and at others during the course of the year, Harbor Fund’s operations and the Adviser’s ability, consistent with the “manager of managers” structure of Harbor Fund, to (i) identify and recommend to the Trustees a subadviser for each Harbor fund, (ii) monitor and oversee the performance and investment capabilities of each subadviser, and (iii) recommend the replacement of a subadviser where appropriate.

At their November 20-21, 2005 meeting, the Trustees, including all of the Independent Trustees voting separately, determined that with respect to Harbor Small Company Growth Fund the terms of the proposed new Investment Advisory Agreement and Subadvisory Agreement were fair and reasonable and approved the agreements for an initial two-year period as being in the best interest of Harbor Small Company Growth Fund and its shareholders. At their February 12-14, 2006 meeting, the Trustees, including all of the Independent Trustees voting separately, determined that the terms of each Investment Advisory and Subadvisory Agreement with respect to the Harbor Capital Appreciation Fund, Harbor Small Cap Growth Fund, Harbor Small Cap Value Fund, Harbor International Fund, Harbor High-Yield Bond Fund and Harbor Bond Fund were fair and reasonable and approved the continuation for a one-year period of each such Investment Advisory and Subadvisory Agreement as being in the best interests of the respective Fund and its shareholders.

In their deliberations, the Independent Trustees had the opportunity to meet privately without representatives of the Adviser or any Subadviser present and were represented throughout the process by legal counsel to the Independent Trustees and the Funds.


1	A discussion of the Board of Trustees’ most recent deliberations concerning the Investment Advisory and Subadvisory Agreements of the other Harbor Funds covered by this report (which occurred at meetings held in August of 2005) is contained in Harbor Fund’s annual report to shareholders dated October 31, 2005.

146

Harbor Fund

ADDITIONAL INFORMATION—Continued

In considering the approval of each Fund’s Investment Advisory and Subadvisory Agreement, the Board of Trustees, including the Independent Trustees, evaluated a number of factors relevant to their determination. They did not identify any single factor as all-important or controlling, and individual Trustees did not necessarily attribute the same weight or importance to each factor.

Among the factors considered by the Trustees in approving the Advisory Agreements were the following:


	•	the nature, extent, and quality of the services provided by the Adviser (or with respect to Harbor Small Company Growth Fund, the services proposed to be provided), including the background, education, expertise and experience of the investment professionals of the Adviser;

	•	the investment performance of each Fund as compared to certain relevant securities indices, and in the case of Harbor Small Company Growth Fund, certain historical composite performance results of NorthPointe Capital in the same strategy, adjusted to reflect the proposed fund’s Institutional Class expense ratio as compared to the Russell 2000^® Growth Index;

	•	the fees charged by the Adviser for investment advisory services (or with respect to Harbor Small Company Growth Fund, the fees proposed to be charged under the new Investment Advisory Agreement), including in each case specifically the portion of the fee to be retained by the Adviser, after payment of the Subadviser’s fee, for the subadviser oversight, administration and “manager of managers” services the Adviser would provide;

	•	information contained in materials provided by the Adviser and compiled by Lipper, Inc. (“Lipper”) as to the investment returns, advisory fees and total expense ratios of the Institutional Class of each Fund relative to those of other investment companies with similar objectives and strategies managed by other investment advisers, consisting of both a peer group of funds as well as a broader universe of funds compiled by Lipper (in the case of Harbor Small Company Growth Fund, the investment return data consisted of net hypothetical returns of NorthPointe Capital’s historical composite record in the same strategy, adjusted to reflect the proposed fund’s Institutional Class expense ratio, compiled by the Adviser as opposed to Lipper);

	•	information contained in materials regarding the total expense ratios of the Retirement and Investor Classes of each Fund offering such classes, including information obtained from Morningstar Inc. (“Morningstar”) regarding the total expense ratios of the Retirement Class relative to the Morningstar peer group of similar investment companies and other information regarding the total expense ratios of the Investor Class relative to a peer group of investment companies offered through similar intermediary channels;

	•	the compensation received (or to be received) by Harbor Services Group, Inc. (“Harbor Services Group”), the Funds’ transfer agent, and HCA Securities, Inc. (“HCA Securities”), the Funds’ principal underwriter, in consideration of the services each provides (or will provide) to the Funds, and any other benefits that inure to the Adviser and its affiliates as a result of their relationship with the Funds;

	•	the profitability of the Adviser with respect to each Fund (or in the case of the Harbor Small Company Growth Fund, the anticipated profitability of the Adviser with respect to that Fund), including the effects of revenues of Harbor Services Group and HCA Securities on such profitability; and

	•	the extent to which economies of scale might be realized as each Fund grows, and the extent to which each Fund’s advisory fee reflects any such economies of scale for the benefit of Fund investors.

Among the factors considered by the Trustees in approving the Subadvisory Agreements were the following:


	•	the nature, extent, and quality of the services provided by the Subadvisers (or in the case of NorthPointe Capital with respect to Harbor Small Company Growth Fund, the services proposed to be provided), including the background, education, expertise and experience of the investment professionals of each Subadviser who provides investment management services to the Funds;

	•	the fees charged by each Subadviser for subadvisory services (or in the case of NorthPointe Capital with respect to Harbor Small Company Growth Fund, the fees proposed to be charged under the new subadvisory agreement), which fees are paid by the Adviser, not by the Funds; and

	•	information contained in materials provided by the Adviser and compiled by Lipper comparing the investment performance returns of each Subadviser with those of investment companies with similar objectives and strategies managed by other investment advisers, consisting of peer fund groupings compiled by Lipper (in the case of Harbor Small Company Growth Fund, the investment return data consisted of net hypothetical returns of NorthPointe Capital’s historical composite record in the same strategy, adjusted to reflect the proposed fund’s Institutional Class expense ratio, compiled by the Adviser as opposed to Lipper).

147

Harbor Fund

ADDITIONAL INFORMATION—Continued

Nature, Scope and Extent of Services

The Trustees separately considered the nature, scope and extent of the services provided (or in the case of Harbor Small Company Growth Fund, to be provided) by the Adviser and each Subadviser. In their deliberations as to the approval of each Fund’s Investment Advisory and Subadvisory Agreement, the Trustees were mindful of the fact that, by choosing to invest in a Fund, the shareholders had entrusted the Adviser with the responsibility, subject to the approval of the Trustees, for selecting each Fund’s Subadviser, overseeing and monitoring that Subadviser’s performance and replacing the Subadviser if necessary. The Trustees also considered as relevant to their determination the favorable history, reputation, qualifications and background of the Adviser and each Subadviser, as well as the qualifications of their respective personnel.

The Adviser’s Services. The Board evaluated the nature, scope and extent of the Adviser’s services in light of the Board’s 19 years of experience with the Adviser, as well as materials provided by the Adviser concerning the financial and other resources devoted by the Adviser to Harbor Fund, including the breadth and depth of experience and expertise of the investment, administrative, legal and compliance professionals dedicated to Harbor Fund operations. The Trustees noted that the Adviser had a favorable record of identifying mutual fund products that proved to be attractive to investors, and selecting subadvisers to manage such funds. The Trustees determined that the Adviser had the expertise and resources to identify, select, oversee and monitor each Subadviser and to operate effectively as the “manager of managers” for the Funds.

The Trustees specifically considered the Adviser’s history of replacing subadvisers for particular Harbor funds in circumstances in which the Board and the Adviser had determined that a change in subadvisers was in the best interests of a Fund and its shareholders. Specifically, the Trustees noted that since March 2004, the Adviser had recommended and the Trustees had approved a change in subadvisers for three different series of Harbor Fund.

The Subadvisers’ Services. The Trustees’ consideration of the services provided by the Subadvisers included a review of each Subadviser’s portfolio managers, investment philosophy, style and processes and record of consistency therewith, the volatility of its results, its approach to controlling risk, and the quality and extent of its investment capabilities and resources, including, the nature and extent of research it receives from broker-dealers and other sources. In their deliberations, with respect to the Harbor Capital Appreciation Fund, Harbor Small Cap Growth Fund, Harbor Small Cap Value Fund, Harbor International Fund, Harbor High-Yield Bond Fund and Harbor Bond Fund, the Trustees considered the history of Harbor Fund’s relationship with each Subadviser and Harbor Fund’s experience with each Subadviser in this capacity.

In the case of Harbor Small Company Growth Fund, the Trustees considered that the Adviser had recommended NorthPointe Capital and that the Adviser had conducted an extensive search for a small cap growth investment adviser which indicated that NorthPointe had the expertise and resources to add value for that Fund’s shareholders. Specifically, the Trustees received a presentation by the Adviser concerning its search and the finalists resulting from that search and the rationale for the Adviser’s recommendation of NorthPointe Capital. The Trustees considered NorthPointe Capital’s breadth and depth of experience with small cap growth portfolios as well as the experience of the proposed portfolio manager prior to his employment at NorthPointe Capital. They also specifically considered that the existing Harbor Small Cap Growth Fund has been closed to new investors for several years and that it would be beneficial to offer shareholders in other Harbor funds the opportunity to access an investment in this asset class.

The Trustees also considered each Subadviser’s breadth and depth of experience and investment results in managing other accounts similar to the respective Fund. The Trustees received a presentation by investment professionals of each Subadviser who are involved in the management of the respective Fund and a presentation by investment professionals of NorthPointe Capital with respect to the proposed Harbor Small Company Growth Fund. They reviewed information concerning each Subadviser’s historical investment results in managing accounts using similar strategy, including other mutual funds using a substantially identical strategy.

Investment Performance, Advisory Fees and Expense Ratios

In considering each Fund’s performance, advisory fees and expense ratio, the Trustees requested and received from the Adviser data compiled by Lipper. The Trustees had previously received at a meeting earlier in the year a presentation by a representative of Lipper explaining how information was compiled by Lipper and what each comparison was intended to demonstrate.

Harbor Small Company Growth Fund. In consideration of Harbor Small Company Growth Fund (inception date February 1, 2006), the Trustees reviewed information concerning NorthPointe Capital’s historical investment results in managing accounts using a similar strategy relative to the returns of the Russell 2000^® Growth Index. The Trustees noted that, at the proposed Fund expense ratios, and using NorthPointe’s historical composite performance record in the same strategy, the net hypothetical return of this Fund would have been above the median in relation to its peer group and universe medians for the year-to-date, one-year and three-year periods ended September 30, 2005. The Trustees also considered this hypothetical performance compared to the benchmark, which showed over

148

Harbor Fund

ADDITIONAL INFORMATION—Continued

performance for the year-to-date, one-year, and three-year periods then ended. The Trustees also observed that the contractual management fees would be below the peer group median and the Institutional Class actual total expense ratio would be below the peer group median expense ratio. The Trustees considered this information and the information provided in a separate presentation by management and NorthPointe concerning the proposed Harbor Small Company Growth Fund, including a review of NorthPointe’s investment philosophy, style and processes and record of consistency therewith, the volatility of its results, its approach to controlling risk, and the quality and extent of its investment capabilities and resources, including, the nature and extent of research it receives from broker-dealers and other sources. They observed that NorthPointe has an adequate staff of investment professionals committed to its business, including portfolio managers, analysts, traders and legal and compliance personnel.

Harbor Capital Appreciation Fund. In consideration of Harbor Capital Appreciation Fund (inception date December 29, 1987) the Trustees discussed the Fund’s performance in relation to its relevant peer group and broader universe for the one-, two-, three-, four-, and five-year periods ended December 31, 2005, noting that the Harbor Capital Appreciation Fund had placed in the first and second quintile (first being the best) for its performance group and its performance universe for all such periods. The Trustees also considered the fact that Harbor Capital Appreciation Fund outperformed both the Russell 1000^® Growth Index and the Lipper Large-Cap Growth Index for the one-, two-, three-, four-, and five-year periods ended December 31, 2005.

They observed that the Fund’s contractual management fee and expense ratio comparison at the common asset level of $8.2 billion as of November 30, 2005 showed that the Fund’s fee was approximately equal to the median and the Institutional Class actual total expense ratio was below the universe median, and the lowest of its peers. The Trustees also reviewed comparative expense ratio information for the Retirement and Investor Classes, noting that the expense ratio for the Retirement Class was below the Morningstar average for the Fund’s peer group and that the Investor Class expense ratio was below the average for a peer group of funds offered through similar intermediary channels. Brokerage commissions were below the Lipper median. Portfolio turnover was just below the Lipper median in the third quartile.

Harbor Small Cap Growth Fund. In consideration of Harbor Small Cap Growth Fund (inception date November 1, 2000), the Trustees discussed the Harbor Small Cap Growth Fund, noting its outperformance in relation to its peers and universe medians for the four- and five-year periods, ranking in the second quintile in the peer group, and in the first or second quintile in its universe for these periods. They also noted its weaker performance in relation to its peers and universe for the one-, two-, and three-year periods ended December 31, 2005. They noted that the Fund was in the second quintile in relation to its peer group for the one-year period, but in the third quintile in its universe for the one- and two-year periods then ended. It was in the fourth quintile in its universe for the three-year period. The Trustees also considered the fact that Harbor Small Cap Growth Fund outperformed the Lipper Small-Cap Growth Index for the one-, two-, three-, four-, and five-year periods ended December 31, 2005, and outperformed the Russell 2000^® Growth Index for the one-, four-, and five-year periods ended December 31, 2005. The Trustees stated they would monitor the Fund’s short-term performance to determine whether the underperformance in more recent periods indicated a possible longer-term concern.

They observed that the Fund’s contractual management fees at a common asset level showed the fees were below median and its Institutional Class actual total expense ratio was below the median expense ratio. The Trustees also reviewed comparative expense ratio information for the Retirement and Investor Classes, noting that the expense ratio for the Retirement Class was below the Morningstar average for the Fund’s peer group and that the Investor Class expense ratio was below the average for a peer group of funds offered through similar intermediary channels. Brokerage commissions and portfolio turnover were both below the Lipper median. In comparison to its peer group of other small cap growth funds as identified by Lipper, the Trustees considered the fact that the Harbor Small Cap Growth Fund outperformed a majority of such funds for the four-and five-year periods ended December 31, 2005. The expense ratio was in the first quintile. The Trustees noted that the Fund had in place a “soft close” and was thus unlikely to grow significantly in size in the near future.

Harbor Small Cap Value Fund. In consideration of Harbor Small Cap Value Fund (inception date December 1, 2001), the Trustees noted its outperformance in relation to its peers and universe medians for the one-, two-, three-, and four-year periods ended December 31, 2005, ranking in the first or second quintile during these periods. The Trustees also considered the fact that Harbor Small Cap Value Fund outperformed both the Russell 2000^® Value Index and the Lipper Small-Cap Value Index for the one-, two-, three-, and four-year periods ended December 31, 2005.

They observed that the Fund’s contractual management fees at a common asset level showed the fees were slightly above the median and its Institutional Class actual total expense ratio was below the median expense ratio. The Trustees also reviewed comparative expense ratio information for the Retirement and Investor Classes, noting that the expense ratio for the Retirement Class was below the Morningstar average for the Fund’s peer group and that the Investor Class expense ratio was below the average for a peer group of funds offered through similar intermediary channels. Brokerage commissions and portfolio turnover were both below the Lipper median.

149

Harbor Fund

ADDITIONAL INFORMATION—Continued

Harbor International Fund. In consideration of Harbor International Fund (inception date December 29, 1987), the Trustees noted its outperformance in relation to its peer group and universe medians for the one-, two-, three-, four- and five-year periods ended December 31, 2005, ranking in the first quintile (first being the best) during these periods. The Trustees also considered the fact that Harbor International Fund outperformed both the MSCI EAFE^® Index and the Lipper International Large-Cap Core Index for the one-, two-, three-, four-, and five- periods ended December 31, 2005. The Trustees also considered the Fund’s longer-term record, noting that the Fund significantly outperformed its current benchmark, the MSCI EAFE^® Index, for both the ten-year and since inception periods then ended.

They observed that the Fund’s contractual management fees at a common asset level showed the fees were approximately equal to the median and its Institutional Class actual total expense ratio was below the median expense ratio. The Trustees also reviewed comparative expense ratio information for the Retirement and Investor Classes, noting that the expense ratio for the Retirement Class was below the Morningstar average for the Fund’s peer group and that the Investor Class expense ratio was below the average for a peer group of funds offered through similar intermediary channels. Brokerage commissions and portfolio turnover were both below the Lipper median.

Harbor High-Yield Bond Fund. In consideration of Harbor High-Yield Bond Fund (inception date December 1, 2002), the Trustees noted its outperformance in relation to its peers and universe medians for the one-year and two-year periods ended December 31, 2005, and its underperformance to its peers and universe medians for the three-year period ended December 31, 2005. The Fund’s performance was in the second quintile among its peers for the one-year and two-year periods ended December 31, 2005, yet was in the fourth quintile for the three-year period ended December 31, 2005. In addition, the Fund was in the third quintile among its universe for the one-, two-, and three-year periods ended December 31, 2005. The Trustees also considered the fact that Harbor High-Yield Bond Fund underperformed the Lipper High Current Yield Bond Funds Index for the one-, two-, and three-year periods ended December 31, 2005, and also underperformed the Merrill Lynch High-Yield Master II Index for the two-year and three-year periods ended December 31, 2005.

In evaluating the Fund’s underperformance relative to its indices, the Trustees considered statements by Harbor Capital and subadviser that the subadviser focuses on higher quality high-yield securities in implementing its investment strategy and that the index performance over the period since the inception of the Fund was driven very significantly by the outperformance of lower quality high-yield securities in the index.

They observed that the Fund’s contractual management fees at a common asset level showed the fees were below the median and its Institutional Class actual total expense ratio was also slightly below the median. The Trustees also reviewed comparative expense ratio information for the Retirement and Investor Classes, noting that the expense ratio for the Retirement Class was above the Morningstar average for the Fund’s peer group and that the Investor Class expense ratio was above the average for a peer group of funds offered through similar intermediary channels. The Trustees noted that Harbor Capital agreed to reduce its management fee by 10 basis points from 70 basis points to 60 basis points for the year ending October 31, 2006. The Fund’s portfolio turnover was below the Lipper median.

Harbor Bond Fund. In consideration of Harbor Bond Fund (inception date December 29, 1987), the Trustees noted its outperformance in relation to its peers and universe medians for the one-, two-, three-, four- and five-year periods ended December 31, 2005, ranking in the first or second quintiles during these periods. The Trustees also considered the fact that Harbor Bond Fund outperformed both the Lehman Aggregate Bond Index and the Lipper Intermediate Investment Grade Index for the one-, two-, three-, four-, and five-year periods ended December 31, 2005. The Trustees also considered the Fund’s favorable longer-term record, noting that the Fund had outperformed its current benchmark, the Lehman Brothers Aggregate Index, for the ten-year period then ended. The Trustees also reviewed the extent to which Harbor Capital was waiving a portion of its management fee to improve net performance for the Fund’s shareholders, although it was noted that this waiver was voluntary and could be discontinued at any time.

They observed that the Fund’s contractual management fees at a common asset level showed the fees were equal to the peer group median and its Institutional Class actual total expense ratio was below the median expense ratio. The Trustees also reviewed comparative expense ratio information for the Retirement Class, noting that the expense ratio for the Retirement Class was below the Morningstar average for the Fund’s peer group. The Fund’s portfolio turnover was above the Lipper median.

* * *

The Trustees also separately considered the allocation between the Adviser and each Subadviser of the relevant Fund’s investment advisory fee (i.e. the amount of the advisory fee retained by the Adviser relative to that paid to the relevant Subadviser as a subadvisory fee). They determined in each case that the allocation was reasonable and the product of arm’s length negotiation between the Adviser and Subadviser.

150

Harbor Fund

ADDITIONAL INFORMATION—Continued

Profitability

The Trustees also considered the Adviser’s profitability in managing each of the Funds as presented by the Adviser, and the allocation methodology used by the Adviser to compute such profitability. The Trustees acknowledged that a reasonable level of profitability was important to provide suitable incentives to the Adviser to continue to attract and maintain high quality personnel and to invest in infrastructure and other resources to support and enhance the Funds’ operations. In considering the Adviser’s profitability generally, the Trustees also reviewed the compensation received by Harbor Services Group and HCA Securities in consideration of the transfer agency and distribution services, respectively, that they provided to Harbor Fund, and any other benefits enjoyed by the Adviser and its affiliates as a result of their relationship with Harbor Fund. The Trustees also noted that the Adviser operated certain Funds at a loss (and, in several cases, reduced or waived a portion of its advisory fee while paying the relevant Subadviser its fee and/or paid or reimbursed fund expenses).

In the case of the Harbor Small Company Growth Fund, the Trustees were advised by the Adviser that the Adviser would likewise reduce or waive its fee payable by the Harbor Small Company Growth Fund, and would reimburse Fund expenses pursuant to a contractual expense limitation agreement in effect until at least February 28, 2007. The Adviser informed the Trustees that the Adviser therefore expected to incur losses in managing the Harbor Small Company Growth Fund during its initial stage and that the Fund would not likely generate any profit at all for the Adviser until its assets had grown significantly. The Trustees determined that the Adviser’s profitability in managing each other Fund, while positive, was not excessive.

Economies of Scale

The Trustees also considered the extent to which economies of scale might be realized as each Fund grows, and the extent to which each Fund’s advisory fee level reflects these economies of scale for the benefit of Fund investors. The Trustees specifically considered whether any advisory fee reduction “breakpoints” should be added to the advisory fee payable by any Fund. It was agreed that the issue of economies of scale was most significant in the case of the largest Funds, such as Harbor Capital Appreciation Fund and Harbor International Fund. The Trustees noted that the management fee for the Harbor Capital Appreciation Fund was approximately equal to the median and Harbor International Fund was at the median. The expense ratios of both such Funds were below the median. As noted above, the Trustees concluded that the Adviser’s profitability in each case was not excessive. They concluded that the existing fee structures reflected economies of scale to date and that breakpoints were not required at the present time. The Trustees noted that the Adviser took the initiative to negotiate a reduction in subadvisory fees with Northern Cross Investments Limited (“Northern Cross”), subadviser to Harbor International Fund, and that the Adviser has voluntarily reduced its advisory fee by 10 basis points both to pass through the 5 basis point reduction in fees payable to Northern Cross and reflect an additional 5 basis point reduction out of the Adviser’s revenues, in each case, on assets above the $12 billion breakpoint level. The Trustees intend to monitor each Fund’s asset growth in connection with future determinations as to advisory agreement approvals in each of the Funds to determine whether breakpoints may be appropriate at that time.

151

Harbor Fund

ADDITIONAL INFORMATION—Continued

TRUSTEES AND OFFICERS

(As of June 2006)

Information pertaining to the Trustees and officers of Harbor is set forth below. The statement of additional information (SAI) includes additional information about the Fund’s Trustees and is available without charge, upon request, by calling 1-800-422-1050 or can be downloaded from our web site at www.harborfund.com. Except as noted, the address of each Trustee and Officer is One SeaGate, Toledo, Ohio 43604-1572.


			Number of
	Term of		Portfolios in
	Office and		Fund
Name (Age)	Length of		Complex	Other Directorships
Position(s) with Fund	Time	Principal Occupation(s)	Overseen by	of Public Companies
Address	Served¹	During Past Five Years²	Trustee	Held by Trustee

INDEPENDENT TRUSTEES

Howard P. Colhoun (70) Trustee 14114 Mantua Mill Road Glyndon, MD 21071	Since 1986	Retired. General Partner, Emerging Growth Partners, L.P. (investing in small companies) (1982-1997); Director, Storage U.S.A. (1994-2002); and Vice President and Director of Mutual Funds, T. Rowe Price Associates, Inc. (prior to 1982).	14	None

John P. Gould (67) Trustee University of Chicago Graduate School of Business 5807 South Woodlawn Avenue Chicago, IL 60637	Since 1994	Steven G. Rothmeier Professor (1996-Present) and Distinguished Service Professor of Economics, Graduate School of Business, University of Chicago (1984-Present, on faculty since 1965); Trustee of Milwaukee Insurance (1997- Present); Director of Unext.com (Internet based education company) (1999-Present); President, Cardean University (1999-2001); Principal and Executive Vice President of Lexecon Inc. (economics consulting firm) (1994-2004); and Trustee and Chairman Pegasus Funds (1996-1999).	14	Independent Trustee of Dimensional Fund Advisors family of mutual funds (1986- Present).

Rodger F. Smith (65) Trustee 8 Greenwich Office Park Greenwich, CT 06831-5195	Since 1987	Managing Director, Greenwich Associates (a research based consulting firm) (1976-Present); Director of Arlington Capital Management (CI) Limited (investment advisory firm) (1992- Present); and Chair of Trust Advisory Committee of Tau Beta Pi Association (engineering honor society) (1985-Present).	14	None

Raymond J. Ball (61) Trustee University of Chicago Graduate School of Business 5807 South Woodlawn Avenue Chicago, IL 60637	Since 2006	Sidney Davidson Professor of Accounting, Graduate School of Business, University of Chicago (2000-Present); Advisor, Sensory Networks (computer security firm) (2001-Present); Academic Affiliate, Analysis Group (litigation consulting firm) (2000-Present); and Professor, European Institute of Advanced Studies in Management (1998-Present).	14	None

INTERESTED TRUSTEE

David G. Van Hooser (59)* Chairman, Trustee and President	Since 2000	President (2002-Present), Director and Chairman of the Board (2000-Present), Harbor Capital Advisors, Inc.; President (2003-Present) and Director (2000-Present), HCA Securities, Inc.; Director, Harbor Services Group, Inc. (2000-Present); and Senior Vice President and Chief Financial Officer, Owens-Illinois, Inc. (glass and plastics manufacturing company) (1998-2001).	14	None

INTERESTED PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES

Charles F. McCain (36) Chief Compliance Officer	Since 2004	Executive Vice President, General Counsel and Chief Compliance Officer (2004-Present), Harbor Capital Advisors, Inc.; Chief Compliance Officer (2004-Present) Harbor Services Group, Inc.; and Junior Partner, Wilmer Cutler Pickering Hale and Dorr LLP (law firm) (1996-2004).

Constance L. Souders (55) Vice President	Since 1992	Executive Vice President, (2003-Present), Director of Administration (1997-Present), Director and Secretary (1988-Present), Senior Vice President (1991-2002), Harbor Capital Advisors, Inc.; President (2000-Present), Director (1991-Present), Harbor Services Group, Inc.; and Executive Vice President (2003-Present), Treasurer (2004-Present), Chief Compliance Officer (2004-Present), President (2002-2003), Vice President (2000-2002), and Secretary (2000-2004) and Director (1989-Present), HCA Securities, Inc.

Brian L. Collins (37) Vice President 980 N. Michigan Suite 1080 Chicago, IL 60606	Since 2005	Executive Vice President and Chief Investment Officer (2004-Present), Harbor Capital Advisors, Inc.; and Director, U.S. Investment Management Research (1998-2004), Mercer Investment Consulting, Inc.

Mark W. Karchner (44) Treasurer	Since 2005	Executive Vice President and Chief Financial Officer (2005-Present) and Senior Vice President, Business Analysis & Control (2004-2005), Harbor Capital Advisors, Inc.; Chief Financial Officer (2005-Present), Harbor Services Group, Inc.; and Chief Financial Officer and Senior Vice President (2001-2003), S.E. Johnson Companies, Inc.

Karen B. Wasil (53) Secretary	Since 1994	Assistant Secretary (1997-Present) and Regulatory and Legal Compliance Manager (1995-Present), Harbor Capital Advisors, Inc.; Secretary (2000-Present), Harbor Services Group, Inc.; and Secretary (2004-Present), HCA Securities, Inc.

Jodie L. Crotteau (34) Assistant Secretary	Since 2005	Assistant Secretary and Compliance Manager (2005-Present), Regulatory Compliance Specialist (2004-2005), Senior Legal Assistant (2002-2003) and Legal Assistant I (2000-2001), Harbor Capital Advisors, Inc.; and Assistant Secretary (2005-Present), Harbor Services Group, Inc.


1	Each Trustee serves for an indefinite term, until his successor is elected. Each officer is elected annually.
2	On June 7, 2001, a wholly-owned subsidiary of Robeco Groep N.V. acquired substantially all of the assets and assumed substantially all of the liabilities of the predecessor adviser to Harbor Fund, also named “Harbor Capital Advisors, Inc.” That wholly-owned subsidiary of Robeco Groep N.V. assumed the name “Harbor Capital Advisors, Inc.” as part of the acquisition. Another subsidiary of Robeco Groep N.V. acquired substantially all of the assets and assumed substantially all of liabilities of Harbor Transfer, Inc. and assumed the name “Harbor Transfer, Inc.” On September 20, 2001, a wholly-owned subsidiary of Robeco Groep, N.V. acquired substantially all of the assets and assumed substantially all of the liabilities of HCA Securities, Inc. and assumed the name “HCA Securities, Inc.” Accordingly, for periods prior to June 7, 2001 with respect to Harbor Capital Advisors, Inc. and Harbor Transfer, Inc. and for periods prior to September 20, 2001 with respect to HCA Securities, Inc., employment with Harbor Capital Advisors, Inc., Harbor Transfer, Inc. and HCA Securities, Inc. refers to employment with the predecessor entities. Effective March 1, 2006, Harbor Transfer, Inc. changed its name to Harbor Services Group, Inc.
*	Mr. Van Hooser is deemed an “Interested Trustee” due to his affiliation with the Adviser and Distributor of Harbor Fund.

(This document must be preceded or accompanied by a Prospectus.)

152


TRUSTEES AND OFFICERS		SHAREHOLDER SERVICING AGENT

David G. Van Hooser Raymond J. Ball Howard P. Colhoun John P. Gould Rodger F. Smith Charles F. McCain Constance L. Souders Brian L. Collins Mark W. Karchner Karen B. Wasil Jodie L. Crotteau INVESTMENT ADVISER Harbor Capital Advisors, Inc. One SeaGate Toledo, OH 43604-1572 DISTRIBUTOR AND PRINCIPAL UNDERWRITER HCA Securities, Inc. One SeaGate Toledo, OH 43604-1572 (419) 249-2900	Chairman, President and Trustee Trustee Trustee Trustee Trustee Chief Compliance Officer Vice President Vice President Treasurer Secretary Assistant Secretary	Harbor Services Group, Inc. P.O. Box 10048 Toledo, OH 43699-0048 1-800-422-1050 CUSTODIAN State Street Bank & Trust Company 225 Franklin Street Boston, MA 02110 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP 200 Clarendon Street Boston, MA 02116 LEGAL COUNSEL Wilmer Cutler Pickering Hale and Dorr LLP 60 State Street Boston, MA 02109

One SeaGate

Toledo, Ohio 43604-1572

1-800-422-1050

www.harborfund.com



	Recyclable
	Contains 20%
	post consumer waste.
	Printed with soy-based inks.

6/2006/485,000

ITEM 2 — CODE OF ETHICS

Not applicable.

ITEM 3 — AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

ITEM 4 — PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

ITEM 5 — AUDIT COMMITTEE OF LISTED REGISTRANTS

Not applicable.

ITEM 6 — SCHEDULE OF INVESTMENTS

Included as part of the report to shareholders filed under Item 1 of this form.

ITEM 7 — DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 8 — PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES

Not applicable.

ITEM 9 — PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS

Not applicable.

ITEM 10 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees since the date of the prior Form N-CSR.

ITEM 11 — CONTROLS AND PROCEDURES

(a)		The Principal Executive and Financial Officers concluded that the registrant’s disclosure controls and procedures are effective based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing of this report.

(b)		There were no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

ITEM 12 — EXHIBITS


(a)(1)		Not applicable.

(a)(2)		A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) is attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed this 23^rd day of June, 2006 on its behalf by the undersigned, thereunto duly authorized.


		HARBOR FUND

		By:		/s/ David G. Van Hooser
				David G. Van Hooser
				Chairman, President, Trustee
				And Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Exhibit Index


Number		Description
99.CERT1		Certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)).

99.CERT2		Certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)).

99.906CERT		Certification as required by Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350).



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