Advisory Research Value Income Fund
Advisory Research Value Income Fund will seek high current income and long term capital appreciation. Interesting plan: they intend to invest primarily in preferred securities, but retain the option of buying “other income producing securities including convertible securities, debt securities, common stocks, and securities of other investment companies.” No more than 20% of the portfolio will be non-U.S. This fund represents a conversion of two hedge funds (Advisory Research Value Income Fund, L.P. and Advisory Research Value Income Fund II, L.P.) into one mutual fund. The hedge fund returned an average of 4.7% per year from 2003 to 2011, vastly better than the 1.2% registered by its benchmark (Merrill Lynch US Preferred Fixed Rate Index). Brien M. O’Brien, James M. Langer and Bruce M. Zessar will manage the portfolio. The minimum initial investment is $2,500. The expense ratio is not yet set.
BBH Global Core Select
BBH Global Core Select will seek to provide investors with long-term growth of capital by investing in mid- and large-cap stocks around the world. They describe themselves as “buy and own” investors. They intend to invest mostly in developed markets, but can invest without limit in emerging markets as well. At least 40% of the portfolio will be non-US and they can hedge their currency exposure. Regina Lombardi and Timothy E. Hartch will manage the portfolio. BBH recently described Lombardi as part of their team of media and consumer analysts. Hartch comanages the excellent, recently closed BBH Core Select (BBTRX) fund. The minimum initial investment is $10,000. The expense ratio is not yet set.
BRC Large Cap Focus Equity Fund
BRC Large Cap Focus Equity Fund (Advisor Class Shares) wants to achieve long-term capital appreciation that will exceed the S&P 500 Index over a three- to five-year time horizon. They’ll invest in 30-35 large cap stocks. BRC stands for “Bounded Rationality Concepts.” These guys believe in behavioral economics and think that they can anticipate events like positive earnings surprises and upgrades. John R. Riddle will head the portfolio team. The three managers previously worked for Duff & Phelps which, like Leuthold, is known for its investment research and analysis. The minimum initial investment is $2,500. The expense ratio, after waivers, will be 1.24%.
Drexel Hamilton Multi-Asset Real Return Fund
Drexel Hamilton Multi-Asset Real Return Fund will seek (duh) real return which they define as “total return that exceeds U.S. inflation over a full [five-year] inflation cycle.” They plan to invest, mostly, in other Drexel Hamilton funds, in TIPs and in commodity-linked ETFs and ETNs. The other two Drexel funds in which it will invest have been around less than a year. Andrew Bang, a West Point grad and the firm’s founder, is the portfolio manager. Before founding Drexel, he was a Senior Vice President at Shinhan Investment America, a Vice President at AIG Global Investments, and a Portfolio Manager for GE Asset Management (GEAM). In that latter role he managed $2.5 billion or so. The minimum initial investment is $10,000. The expense ratio is 1.81% after waivers.
First Trust High Yield Long/Short ETF
First Trust High Yield Long/Short ETF will be an actively-managed ETF which will invest most of its portfolio (long and short) in high yield U.S. and non-U.S. corporate debt obligations, bank loans and convertible bonds. It may invest in “special situations” including defaulted securities and common stocks; companies whose financial condition is troubled or uncertain and that may be involved in bankruptcy proceedings, reorganizations or financial restructurings. Finally, the manager expects routinely to short U.S. Treasuries and some investment grade U.S. corporate debt; the fund “intends to use the proceeds from the Fund’s short positions to purchase high yield debt securities, thereby creating a form of financial leverage.” William Housey, Scott D. Fries, Peter Fasone, Todd Larson and Eric Maisel will manage the fund. All of them seem to have extensive high yield experience at other firms (Morgan Stanley/Van Kampen, BNP Paribas, ABN AMBR)). Expenses are not yet set.
First Trust Global Tactical Asset Allocation and Income Fund
First Trust Global Tactical Asset Allocation and Income Fund will be an actively-managed ETF that “seek[s] total return and provide income [and] a relatively stable risk profile.” It will invest in other ETFs, plus some ETNs and sovereign debt. They’ll also try to sell calls on a portion of the portfolio to supplement their yield. The description of the fund’s underlying asset allocation strategy isn’t terribly informative; they’ll have a neutral allocation (which isn’t spelled out) and will move from it as conditions call for. John Gambla and Rob A. Guttschow will manage the fund. Up until 2011, they managed five closed-end funds for Nuveen: Dow 30 Premium and Dividend Income (DPD), Dow 30 Enhanced Premium & Income (NYSE: DPO), NASDAQ Premium Income & Growth (QQQX), Nuveen Core Equity Alpha Fund (JCE) and Nuveen Tax-Advantaged Dividend Growth Fund (JTD). Expenses not yet set.
Hotchkis & Wiley Global Value Fund
Hotchkis & Wiley Global Value Fund seeks capital appreciation by investing, primarily, in stocks of companies located in developed markets. At least 40% will be non-US and up to 20% might be in emerging markets. They plan a bottom-up, fundamentals-driven strategy. Scott McBride and Judd Peters will manage the fund. They have managed private accounts using this strategy since 2011 but the firm hasn’t released performance information yet. Their public record is mixed: they’re on the management teams for two sad sack domestic funds, Diversified Value (HWCAX) and Large Cap Value (HWLAX). Since joining the teams, the funds have gone from dreadful to mediocre, so that’s sort of an endorsement. The minimum investment is $2500. Expenses are not yet set. There is a 5.75% front-load but H&W funds are generally available no-load at Schwab.
Huber Capital Diversified Large Cap Value Fund
Huber Capital Diversified Large Cap Value Fund seeks to achieve current income and capital appreciation by investing in 40-80 large caps that trade “at a significant discount to the present value of future cash flows.” The fund is benchmarked against the Russell 1000 Value, whose smallest firm has a $230 million market cap, but the managers expect to invest mostly in U.S. stocks above $5 billion. It may invest up to 20% in ADRs. Joseph Huber, who also manages the five-star Huber Small Cap Value (HUSIX) and Huber Equity Income (HULIX) funds, will manage the portfolio. The minimum initial investment is $5000, reduced to $2500 for IRAs. The opening expense ratio will be 1.25%.
Janus Diversified Alternatives Fund
Janus Diversified Alternatives Fund will seek absolute return with low correlation to stocks and bonds. Their description of investment strategies is mostly self-important babble about “risk premia opportunities.” It looks like they use a risk-parity model to set their neutral asset allocation across equity, fixed income, commodity, and currency asset classes. That is, they adjust allocations so that the risk generated by stocks is the same as that generated by bonds or commodities. They then look for the sources of the aforementioned “risk premia opportunities,” which is to say, mis-priced securities. They can invest both long and short. They can invest directly or through mutual funds, ETFs or ETNs. Andrew B. Weisman and John S. Fujiwara will manage the fund. Both are hedge fund guys who joined Janus in 2012. “S” shares are available no-load and NTF. The minimum initial investment is $2500. The expense ratio is not yet set.
Kellner Event Fund
Kellner Event Fund seeks to achieve positive risk-adjusted returns independent of the returns generated by the overall equity markets. The plan is to invest, long and short, “using various strategies” in order to “seek to profit from securities experiencing catalyst driven change.” Such events might include mergers, bankruptcies, financial or operational stress, restructurings, asset sales, recapitalizations, spin-offs, litigation, regulatory and legislative changes “as well as other types of events.” It can invest in pretty much any asset class. George A. Kellner, the adviser’s founder & Chief Executive Officer, will lead the management team. The public record for the team is awfully thin. They launched a merger-arbitrage fund in July 2012 and it’s been pretty average. Several of the managers have experience with event-driven hedge funds, but of course there’s no record available. The minimum initial investment is $2500, reduced to $2000 for various tax-advantaged plans and $100 for accounts set up with an AIP. The opening expense ratio will be 2.75% (yikes) in addition to a 2% redemption fee.
Managers AMG Chicago Equity Partners Balanced Fund
Managers AMG Chicago Equity Partners Balanced Fund, yet another convert from the world of loaded funds, will pursue “a high total investment return, consistent with the preservation of capital and prudent economic risk.” The fund will ordinarily invest 50-65% in stocks and the rest in bonds and cash. It will invest mostly in mid- to large-cap stocks, selected on the basis of “momentum, value, and quality factors.” The predecessor fund, the same except for a sales load, has been quite consistently above-average. David C. Coughenour of CEP leads the management team. The minimum initial investment is $2,000. The expense ratio, after waiver, is 1.10%. The “service class,” sold through financial intermediaries, is 0.25% cheaper.
Oakseed Opportunity Fund
Oakseed Opportunity Fund will seek long term capital appreciation by investing, mostly, in the stocks of high quality US companies. They do have the right to invest overseas and they may also invest up to 10% short. Greg L. Jackson and John H. Park will manage the fund. These guys managed or co-managed some “A” tier funds (Oakmark Global, Acorn, Acorn Select and Yacktman) around the turn of the century. Both worked at Blum Capital, a private equity firm, from about 2004-2012. The minimum initial investment is $2500, reduced to $1000 for various tax-advantaged plans and $100 for accounts set up with an AIP. The opening expense ratio will be 1.4% in addition to a 2% redemption fee for shares held fewer than 90 days.
Pacific Financial Alternative Strategies, Flexible Growth & Income, Balanced, Foundational Asset Allocation, Faith & Values Based Moderate, Conservative and Aggressive Funds
Pacific Financial Alternative Strategies, Flexible Growth & Income, Balanced, Foundational Asset Allocation, Faith & Values Based Moderate, Conservative and Aggressive Funds. You’re welcome to read about them if you’d like, but I’m not going to spend time on them. Here’s the story: Pacific Financial’s three-person management team already runs five funds with diverse focuses. The “investor” class for every one of those funds is one-star (as of 10/26/2012). They’re now proposing to add seven more funds, requiring yet more expertise that they have not demonstrated that they possess. The expense ratios aren’t yet set. The minimum purchase is $5000.
Riverbridge Growth Fund
Riverbridge Growth Fund will pursue to seek long term capital appreciation by investing in small- to mid-cap US stocks (and some ADRs). The managers intend to focus on “companies that it views as building their earnings power and building their intrinsic … values over long periods of time. The advisor uses a bottom-up approach that seeks to identify high quality growth companies that demonstrate the ability to sustain strong secular earnings growth, regardless of overall economic conditions.” Mark A. Thompson, Rick D. Moulton and Dana L. Feick will manage the fund. Over the last decade, the composite performance of the private accounts using this strategy has been pretty good: up 8.2% per year versus 6.1% for the Russell 3000 over the same period. The minimum initial investment is $2,500. The expense ratio, which will include a waiver, is not yet set. There’s a 1% redemption fee on shares held fewer than 90 days.
Riverbridge Eco Leaders Fund
Riverbridge Eco Leaders Fund will pursue to seek long term capital appreciation by investing in “companies that use strategic technologies, materials and services to: (1) increase productivity by improving quality, efficiency and performance or (2) lower costs by reducing raw materials usage, scrap, and the amount and toxicity of waste as companies having a net positive impact on the environment.” The managers intend to focus on “companies that it views as building their earnings power and building their intrinsic … values over long periods of time. The advisor uses a bottom-up approach that seeks to identify high quality growth companies that demonstrate the ability to sustain strong secular earnings growth, regardless of overall economic conditions.” Mark A. Thompson, Rick D. Moulton and Dana L. Feick will manage the fund. Over the last decade, the composite performance of the private accounts using this strategy has been pretty good: up 7.5% per year versus 5.3% for the S&P500 over the same period. The minimum initial investment is $2,500. The expense ratio, which will include a waiver, is not yet set. There’s a 1% redemption fee on shares held fewer than 90 days.
Schwab Target 2045, 2050 and 2055 Funds
Schwab Target 2045, 2050 and 2055 Funds are all funds-of-Schwab-funds. It appears that they’re only available to “eligible investors,” which appears to translate as “institutions.” Not sure of why. Zifan Tang (cool name) manages them all. Expenses not yet set.
Stonebridge Small-Cap Growth Fund
Stonebridge Small-Cap Growth Fund appears in the SEC filings of October 5, 2012 as a new fund with an N-1A filing. It is, in reality, an old, expensive and underperforming institutional fund that is becoming a retail one. This is odd, since there already was a retail version. It claims to seek long-term growth of capital. “Short-term income is a secondary objective.” I’m not entirely sure what “short term income” is. In any case, they invest in domestic small cap stocks, those between $100 million and $3 billion. And they look for “companies with strong balance sheets, high/growing return on invested capital, positive free cash flow, and earnings growth in excess of 20%.” Up to 10% may be invested overseas. Richard C. Barrett and Matthew W. Markatos have managed it for about 30 years. The minimum initial investment is $2500. The opening expense ratio will be 1.97% and there’s a 2% redemption fee on shares held under 30 days.
Scharf Balanced Opportunity Fund
Scharf Balanced Opportunity Fund seeks long-term capital appreciation and income. They’ll invest 50-75% in global equities and the rest in global fixed income. Brian A. Krawez, president of Scharf, is the portfolio manager. Scharf manages a bunch of private accounts using this same strategy and they’ve done quite well over time. In the five years since Mr. Krawez has been around, the separate accounts outperformed a 60/40 benchmark by between 150 – 300 basis points per year. The minimum initial investment is $10,000. The expense ratio, after waiver, is 1.20%.
Sit Quality Income Fund
Sit Quality Income Fund will seek high current income and safety of principal. The fund invests at least 50% of its assets in U.S. government debt securities and the remainder in investment grade debt securities issued by corporations and municipalities, and mortgage and other asset backed securities. They’re targeting an average effective duration for the portfolio of approximately 0 to 2 years. Michael C. Brilley, Bryce A. Doty, Mark H. Book, and Chris M. Rasmussen constitute the management team and also manage the five-star Sit US Government Securities fund (SNGVX). The minimum initial investment is $5,000, reduced to $2000 for IRAs. The expense ratio, after waiver, is 0.90%.
Systematic Mid Cap Value Fund
Systematic Mid Cap Value Fund (SYAMX), which is being converted from a front-loaded fund to a no-load one, will pursue long-term capital appreciation by investing in 60-80 mid-cap stocks. The manager “[s]eeks out value companies with a confirmed catalyst for sustained fundamental improvement that should eventually lead to either revised earnings estimates or earnings surprises in the future.” Despite an uninspired track record, the earlier version of the fund did accumulate $300 million in assets. Ron Mushock and D. Kevin McCreesh have managed the fund since launch. The minimum initial investment is $2,000. The expense ratio, after a generous one basis-point waiver, is 1.13%. The “service class,” sold through financial intermediaries, is 0.25% cheaper.
WisdomTree Global Corporate Bond Fund
WisdomTree Global Corporate Bond Fund will be an actively-managed ETF that will pursue a high level of total return consisting of both income and capital appreciation. They plan to invest in debt issues by public, private, and state-owned or sponsored corporations. They’ll limit emerging market debt to 25% of the portfolio, they can invest 25% in derivatives and expect to hedge their currency exposure. It looks as if there will be four managers, but their names have not been published and the expenses not yet set.
