Twenty new no-load retail funds are slated to go live by year’s end; most will first trade on December 30 so they’ll first able to report full-year results for 2017. The most immediately intriguing are Rajiv Jain’s new GQG Partners Emerging Markets Equity Fund and Osterweis Total Return., though Polen International Growth Fund has some pretty solid lineage, too. Read on!
ACR International Quality Return Fund
ACR International Quality Return Fund will seek is “to protect capital from permanent impairment while providing an absolute return above the Fund’s cost of capital and a relative return above the Fund’s benchmark over a full market cycle.” After such a build-up, it’s a letdown to report that it appears just to be a global stock fund. It will hold about 20 names, expects to keep less than a third in emerging markets and might hold some cash. Not much stands out there. The fund will be managed by Willem Schilpzand, Nicholas Tompras, and Tim Piechowski of Alpine Capital Research. The opening expense ratio is 1.25%. The minimum initial investment is $10,000.
Alambic Mid Cap Growth Plus Fund
Alambic Mid Cap Growth Plus Fund will seek long-term capital appreciation. The plan is to use a model that weighs quality, valuation, investor behavior and momentum characteristics to select a growth-y portfolio. It’s not immediately clear what qualifies as the “plus” signaled in the fund’s name. Maybe the behavioral screens? They launched a small-growth fund at the end of 2015 and it’s been undistinguished so far.The fund will be managed by Albert Richards, PhD, and Brian Thompson. The opening expense ratio is not yet available. The minimum initial investment is $50,000.
Alambic Mid Cap Value Plus Fund
Alambic Mid Cap Value Plus Fund will seeklong-term capital appreciation. The plan is to use a model that weighs quality, valuation, investor behavior and momentum characteristics to select a growth-y portfolio. It’s not immediately clear what qualifies as the “plus” signaled in the fund’s name. Maybe the behavioral screens? They launched a small-value fund at the end of 2015 and it’s been exceptional solid so far. The fund will be managed by Albert Richards, PhD, and Brian Thompson. The opening expense ratio is not yet available. The minimum initial investment is $50,000.
Altegris Trend Strategy Fund
Altegris Trend Strategy Fund will seek . The plan is to “deliver absolute returns for the Fund through a range of quantitative algorithms designed to exploit directional trends in global financial markets.” At base, just another managed futures fund. The fund will be managed by Matthew Osborne and Lara Magnusen. The team’s other managed futures fund is underwater since inception (2010) and noticeably trails its woeful peer group.The opening expense ratio is not yet public. The minimum initial investment is $2,500.
AMG Yacktman Fully Invested Fund
AMG Yacktman Fully Invested Fund will seek to generate equity-like rates of return over a full market cycle while managing the level of risk. The plan is to invest in 15-45 stocks and to stay 95% invested while maintaining the right to shift to a temporary defensive position. The managers are looking for a combination of good businesses, good management and low valuations.The fund will be managed by Stephen Yacktman and Jason Subotky. The opening expense ratio is 1.25%. The minimum initial investment is $2,000.
AmericaFirst Large Cap Share Buyback Fund
AmericaFirst Large Cap Share Buyback Fund will seek growth of capital. The plan is to buy large-cap stocks from firms that have had share repurchases in the past 12 months. The portfolio is rebalanced every four months, though it’s not clear what it’s rebalanced to achieve. The fund will be managed by Rick Gonsalves. The opening expense ratio is undisclosed but likely to be unpalatable since the management fee alone is 1.25% and the low-load U-shares have a 1% 12(b)1 fee. The minimum initial investment is $1,000 for “U” shares.
Driehaus Multi-Asset Growth Economies Fund
Driehaus Multi-Asset Growth Economies Fund will seek to maximize total return. The plan is to opportunistically invest across a variety of asset classes in “growth economies.” The implication is that those are emerging markets but that there will likely be some exposure to mature and frontier economies as well. The fund will be managed by four person team. The opening expense ratio is undisclosed. The minimum initial investment is $10,000.
GQG Partners Emerging Markets Equity Fund
GQG Partners Emerging Markets Equity Fund will seek long-term capital appreciation. The plan is “to capture market upside while limiting downside risk through full market cycles by combining a rigorous screening process with fundamental analyses to seek to identify and invest in companies that … are reasonably priced, and have strong fundamental business characteristics, sustainable earnings growth and the ability to outperform peers over a full market cycle and sustain the value of their securities in a market downturn.” The fund will be managed by Rajiv Jain who built his reputation by running the $8.4 billion Virtus Emerging Markets Opportunities Fund (HEMZX), which he quit in spring. The opening expense ratio is 1.33% for Investor shares. The minimum initial investment is $2,500.
Ivy International Small Cap Fund
Ivy International Small Cap Fund will seek capital growth and appreciation. I hesitate to mention that those are the same thing. The plan is to maintain a diversified portfolio of growth and value small-cap stocks located outside the US and Canada. The fund will be managed by Martin Fahey and Bryan Mattei. The opening expense ratio is 1.45% for “A” shares, which will also carry 5.75%. The minimum initial investment is $750 for “A” shares.
Lazard Real Assets Portfolio
Lazard Real Assets Portfolio will seek total return. The plan is to invest in things that can endure inflation, including natural resources, real estate, equipment and industrials, infrastructure and commodities, “other assets that the Investment Manager expects may perform well during periods of high inflation” and inflation-indexed securities. That “other” category may explain why tech stocks are included on the list.The fund will be managed by Jai Jacob and Stephen Marra. The opening expense ratio has not yet been disclosed. The minimum initial investment is $2,500.
Osterweis Total Return Fund
Osterweis Total Return Fund will seek “to preserve capital and attain long-term total returns through a combination of current income and moderate capital appreciation.” The plan is to build a global portfolio of investment-grade bonds; up to 20% might be high-yield and up to 20% might be non-U.S. The fund will be managed by Eddy Vataru and Scott Ulaszek. The opening expense ratio is 0.76%. The minimum initial investment is $5,000.
Pax Core Bond Fund
Pax Core Bond Fund will seek income and conservation of principal . The plan is to build an investment-grade bond portfolio with a strong ESG screen. The fund will be managed by Anthony Trzcinka. The opening expense ratio is 0.72%. The minimum initial investment is $1,000.
Pax ESG Beta Dividend Fund
Pax ESG Beta Dividend Fund will seek total return, with a secondary concern for preserving capital. The plan is to buy large cap stocks with “stronger ESG scores , higher dividends and higher quality investment fundamentals .” The fund will be managed by a Pax team. The opening expense ratio is 0.90%. The minimum initial investment is $1,000.
Pax Large Cap Fund
Pax Large Cap Fund will seek long-term capital appreciation. The plan is to use a bottom-up approach to construct an ESG-screened portfolio whose companies fall within the range of those in the S&P 500. The fund may invest up to 25% of its portfolio directly in international stocks or up to 45% indirectly through ADRs. The fund will be managed by Chris Brown. The opening expense ratio is 0.95%. The minimum initial investment is $1,000.
Polen International Growth Fund
Polen International Growth Fund will seek long-term growth of capital. The plan is to invest in approximately 25 to 35 large cap stocks in both developed and emerging markets. They target firms with a sustainable competitive advantage. The fund will be managed by Todd Morris. Mr. Morris has been a research analyst at Polen since 2011 and was a U.S. Navy officer. The opening expense ratio is 1.35%. The minimum initial investment is $3,000.
Reinhart Focus PMV Fund
Reinhart Focus PMV Fund will seek long-term capital appreciation. The plan is to buy small- and mid-cap stocks selling at a discount of at least 30% to the private market value (the PMV of the name). It’s a bottom-up, one good stock at a time, sort of operation.The fund will be managed by Matthew Martinek. The opening expense ratio is 1.35%. The minimum initial investment is $5,000.
Thornburg Long/Short Equity Fund
Thornburg Long/Short Equity Fund will seek long-term capital appreciation. The plan is to invest in companies from the three categories with cute names (“Growth Industry Leaders”) and short stocks from firms in the three categories with sad names (“Cycle Victims”). This is a converted hedge fund that returned an average of 7% per year since February, 2008.The fund will be managed by Connor Browne, who ran the hedge fund. The opening expense ratio is 3.42%. The minimum initial investment is confusing, involving amount from $2,500 to $2,500,000. The lower-expense share classes are targeted to “financial intermediaries” in wrap or fee-based advisory programs.
Taylor Frigon Core Growth Fund
Taylor Frigon Core Growth Fund will seek long-term capital growth. The plan is to do conventional and unremarkable stuff involving good management, strong industries, solid financials with a soupçon of paradigm shifts and disruptive change. The fund will be managed by Gerard J. Frigon. The opening expense ratio is 1.45%. The minimum initial investment is $5,000.
Tortoise Select Income Bond Fund
Tortoise Select Income Bond Fund will seek high level of total return with an emphasis on current income. The plan is invest broadly in the fixed income space within a series of constraints: up to 35% high-yield, 20% preferred securities, 30% in non-dollar-denominated securities and 15% illiquid. The fund will be managed by N. Graham Allen, Bradley Beman, Edward Bradford, Jeffrey Brothers, Gregory Haendel and Zelda Marzec, all from Tortoise Credit Strategies. The opening expense ratio has not been released. The minimum initial investment is $2,500.
USA Mutuals/Carbon Beach Deep Value Fund
USA Mutuals/Carbon Beach Deep Value Fund will seek long-term capital appreciation. The plan is to invest, long and short, in a portfolio of companies “undergoing transformative corporate events, including announced mergers and acquisitions, spin-offs and split-offs, financial or strategic restructurings, management changes and other catalysts.” The fund will be managed by Tobias Carlisle and Mr. Colin Macintosh of Carbon Beach Asset Management. Carbon Beach appears to be a couple bright guys in Santa Monica, CA, managing about $3.75 million. It’s possible that the money is their own, since they check the “zero clients” box on their latest Form Adv. The opening expense ratio has not been revealed. The minimum initial investment is $2,000.
Westcore Municipal Opportunities Fund
Westcore Municipal Opportunities Fund will seek tax-free income. The plan is to buy-and-hold a portfolio of muni bonds, up to 30% of which might be high-yield. They can also use derivatives and ETFs, if need be. The fund will be managed by Kenneth Harris and Nick Foley of Denver Investments. The opening expense ratio has not been disclosed. The minimum initial investment is $2,500 .
As you might know, I have a deep and abiding skepticism about ETFs. Some analysts focus on a structure that allows for disastrous variance from their benchmarks during crises; in the “flash crash,” some ETFs briefly dropped 40% while their underlying indices merely wiggled. Our concern is simpler and rarely addressed: the central justification for exchange-traded funds is that you can trade them, simply and often. For many of us, it’s an irresistible temptation. And, as it turns out, trading is disastrous for our portfolios. It’s bad for professionals and disastrous for the rest of us.
For those of you who would rather lose money, the ETF industry offers up additional options in the weeks ahead:
- Affinity Global Franchise ETF
- Alps/Dorsey Wright Sector Momentum ETF
- Anfield Capital Diversified Liquid Alternatives ETF
- EquityCompass Equity Risk Manager ETF (active)
- EquityCompass Tactical Equity Risk Manager ETF (active)
- Formula Folios Income ETF
- Formula Folios Hedged Growth ETF (active)
- IQ U.S. High Yield Low Volatility ETF (HYLV)
- Legg Mason Global Infrastructure ETF
- Virtus Enhanced Gold ETF (VEG)
- Virtus Enhanced Short U.S. Equity ETF (VESH)
- WisdomTree ICBCCS S&P China 500 ETF
