Proposed new funds and ETFs have to be submitted for review by the Securities and Exchange Commission, which has 75 days to raise any concerns. During those 75 days, the so-called “quiet period,” advisors are forbidden from discussing the fund in registration. Advisors hoping for a fund launch by New Years have their funds in registration by October; those seeking a mid-year launch get the papers filed in April. A lot of the filings were rushed and incomplete. That said, the BBH and Metropolitan West income funds are apt to be entirely reasonable additions; for income-seeking investors, they bear investigation.
AINN Fund
AINN Fund will seek capital gains. In favorable markets, they’ll invest long in equity ETFs. In unfavorable markets, they’ll switch to cash and inverse ETFs. The fund will be managed by Kevin M. Carrasco and Mustan Sakarwala. The initial expense ratio will be 2.05%, and the minimum initial investment is $5,000 for retirement accounts and $25,000 for regular accounts.
ALPS/Smith Total Return Bond Fund
ALPS/Smith Total Return Bond Fund will seek maximum total return, consistent with preservation of capital. The plan is to invest in bonds, and potentially quite a wide array (corporate, convertible, asset-backed, government, zero-coupon) of them. Up to 35% of the portfolio might be in high-yield bonds. The fund will be managed by Gibson Smith. The initial expense ratio has not been disclosed, and the minimum initial investment is $2,500, reduced to $500 for tax-advantaged accounts.
Barings Global Emerging Markets Equity Fund
Barings Global Emerging Markets Equity Fund will seek long-term capital growth. The plan is to invest in emerging markets-like stocks; that is, stocks (or stock-linked derivatives) of companies domiciled in, carrying out business from or having “significant assets or interests in” one or more emerging markets. About the oddest proviso is the promise that the fund “invests at least 40% of its net assets in securities of non-U.S. issuers.” Ummm … emerging Cleveland, anyone? The fund will be managed by William Palmer and Michael Levy of Barings LLC. The team has managed a comparable product in Europe, the BIIL UCITS Fund, that has significantly trailed its benchmark over the past 10 years and since inception in 1992, has modestly trailed its benchmark over the past five years and has outperformed its benchmark for the past one year. The initial expense ratio for “A” shares will be 1.45%, and the minimum initial investment is $1,000.
BBH Income Fund
BBH Income Fund will seek maximum total return, with an emphasis on current income, consistent with preservation of capital and prudent investment management. The plan is to invest in a well-diversified portfolio of fixed income instruments, including floating or variable rate debt instruments. The Fund intends to invest only in debt instruments which are performing, durable, and available at an attractive valuation. The fund will be managed by Andrew P. Hofer and Neil Hohmann. The separate account composite for the strategy has a 10-year return of 4.8% annually, against 4.0% for its benchmark index. The initial expense ratio has not been disclosed, and the minimum initial investment for “N” shares is $5,000.
Cargile Fund
Cargile Fund will seek long-term capital appreciation. The plan is to invest in equity and bond ETFs, including leveraged ETFs, using a mathematical trend-analyzing model that adjusts the portfolio daily. The fund will be managed by Mickey Cargile. The initial expense ratio will be 1.78%, and the minimum initial investment is $5,000.
ClearShares Ultra-Short Maturity ETF
ClearShares Ultra-Short Maturity ETF, an actively-managed ETF, will seek current income. The plan is to buy “epurchase agreements collateralized by U.S. government securities and, to a lesser extent, directly in individual fixed income instruments.” The fund will be managed by ark N. Hong, CFA (Managing Director), Jonathan M. Chesshire (Managing Director), Eric J. Blasberg and Kevin M. O’Connor of ClearShares LLC. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio will be 0.30%.
Eagle Rock Floating Rate Fund
Eagle Rock Floating Rate Fund will seek high a level of current income as is consistent with capital preservation. The plan is to invest in U.S. dollar denominated floating rate secured loans and other floating rate debt instruments. The prospectus helpfully notes that these are considered “speculative investments.” The fund will be managed by Tom Wojczak. The initial expense ratio will be 1.44%, and the minimum initial investment is $1,000.
Frontier MFG Low Carbon Global Fund
Frontier MFG Low Carbon Global Fund will seek attractive risk-adjusted returns over the medium- to long-term within a low carbon framework, while reducing the risk of permanent capital loss. They’ll target 20-50 stocks with the prospect of a currency hedge. My greatest annoyance here is that this same fund existed as part of a different series trust, and was liquidated on April 28, 2018, only to be reborn on two months later. It looks like the predecessor fund (ticker MGYGX) never even launched. The fund will be managed by Domenico Giuliano. The initial expense ratio will be 0.95% for service class shares, and the minimum initial investment is $10,000.
Gabelli Pet Parent Fund
Gabelli Pet Parent Fund, an actively-managed ETF, will seek capital appreciation. And yes, literally, pets and their “parents.” The plan is to invest in “the pet industry.” Sorry, I refuse to say anything more about the strategy. The fund will be managed by Daniel M. Miller, Executive Vice President of Marketing for Gabelli and manager of the one-star Gabelli Focus Five Fund. The initial expense ratio will be 0.90%.
James Alpha Structured Credit Value Portfolio
James Alpha Structured Credit Value Portfolio will seek a high level of risk-adjusted current income and capital appreciation. The plan is to invest in structured credit securities such as CMBS, ABS, CMOs, CLOs, CBOs, CDOs, stripped RMBS and inverse floaters. Which is to say, I have no clue.The fund will be managed by Jay Menozzi and Boris Peresechensky. The initial expense has not been announced, and the minimum initial investment is $2,500.
Metropolitan West Corporate Bond Fund
Metropolitan West Corporate Bond Fund will seek to maximize long-term total return. The plan is to invest in a diversified portfolio of corporate debt instruments of varying maturities issued by U.S. and foreign corporations domiciled in developed market and emerging market countries, with the potential for some government debt, CDOs, asset-backed debt and other spices tossed in. The fund will be managed by Tad Rivelle, Bryan T. Whalen, and Jerry Cudzil . The initial expense ratio has not been disclosed, and the minimum initial investment for “M” shares is $5,000, reduced to $1,000 for tax-advantaged accounts.
Metropolitan West Investment Grade Credit Fund
Metropolitan West Investment Grade Credit Fund will seek to maximize long-term total return. The plan is to allocate investments across a range of fixed income sectors with a focus on investment-grade securities. “Satisfying the Fund’s objective,” they note, “would require it to achieve positive total returns over a full market cycle.” A note in passing: that’s a ridiculously low bar to be set for a really strong team. There are 139 investment grade debt funds that have been around for the current market cycle which began in October 2007. Every one of them has achieved “positive total returns” for that period. The fund will be managed by Tad Rivelle (famous guy), Laird Landmann, Stephen M. Kane and Bryan T. Whalen. The initial expense ratio has not been disclosed, and the minimum initial investment for “M” shares is $5,000, reduced to $1,000 for tax-advantaged accounts.
Metropolitan West Flexible Income Fund
Metropolitan West Flexible Income Fund will seek a high level of current income with a secondary objective of long-term capital appreciation. The plan is to a range of global investment opportunities related to credit, currencies and interest rates. The fund will be managed by Tad Rivelle (famous guy), Laird Landmann, Stephen M. Kane and Bryan T. Whalen. The initial expense ratio has not been disclosed, and the minimum initial investment for “M” shares is $5,000, reduced to $1,000 for tax-advantaged accounts.
Opus Small Cap Value Plus ETF
Opus Small Cap Value Plus, an actively-managed ETF, will seek capital appreciation. The plan is to construct a portfolio of 80-120 small- to mid-cap stocks with three characteristics: higher quality, higher growth firms whose stocks sell at lower valuations (measured by p/e and dividend yield). The expected turnover rate is 50%/year. The fund will be managed by Len Haussler and Adam Eagleston of Opus Capital Management. The duo run the same strategy in separate accounts, those have an annual return of 13.7% (compared to the Russell 2000 Value’s 9.8%) from 7/31/2013 – 12/31/2017. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio has not been disclosed.
Opus International Small/Mid Cap ETF
Opus International Small/Mid Cap, an actively-managed ETF, will seek capital appreciation. The plan is to construct a portfolio of 30-50 small- to mid-cap stocks with three characteristics: higher quality, higher growth firms whose stocks sell at lower valuations (measured by p/e and dividend yield). The expected turnover rate is 50%/year. The fund will be managed by Len Haussler and Adam Eagleston of Opus Capital Management. The duo run the same strategy in separate accounts, those have an annual return of 32.7% (compared to the MSCI ACWI ex-USA Small Cap Index’s 31.7%) from 12/31/2016 – 12/31/2017. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio has not been disclosed.
Pax Global Opportunities Fund
Pax Global Opportunities Fund will seek long term growth of capital by investing in companies benefiting from the transition to a more sustainable global economy. Nominally, it will be an all-cap portfolio. The fund will be managed by Kirsteen Morrison and David Winborne of Impax Asset Management. The initial expense ratio will be 1.23%, and the minimum initial investment is $1,000.
Pzena International Small Cap Value Fund
Pzena International Small Cap Value Fund will seek long-term capital appreciation. The plan is to pursue “a classic value strategy” in pursuit of 40-90 international small cap (up to $8.3 billion) stocks. The fund will be managed by Matthew J. Ring and Allison Fisch. There’s a separate accounts composite with a record too short to be meaningful. The initial expense ratio will be 1.53%, and the minimum initial investment is $5,000, reduced to $1,000 for tax-advantaged accounts.
WisdomTree Global Multifactor Fund
WisdomTree Global Multifactor Fund, an actively-managed ETF, will seek capital appreciation. The plan is to use a computer model to find global “securities that exhibit certain characteristics … indicative of positive future returns.” The fund will be managed by someone, but they’re not saying who. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio has not been disclosed.
WisdomTree International Multifactor Fund
WisdomTree Global Multifactor Fund, an actively-managed ETF, will seek capital appreciation. The plan is to use a computer model to find international “securities that exhibit certain characteristics … indicative of positive future returns.” The fund will be managed by someone, but they’re not saying who. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio has not been disclosed.
WisdomTree Emerging Markets Multifactor Fund
WisdomTree Emerging Markets Multifactor Fund, an actively-managed ETF, will seek capital appreciation. The plan is to use a computer model to find EM “securities that exhibit certain characteristics … indicative of positive future returns.” The fund will be managed by someone, but they’re not saying who. Being an ETF, there is no minimum initial purchase requirement. The initial expense ratio has not been disclosed.
