Before funds can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. That means that funds hopeful of launching by December 30th needed to be filed by October 15th. We’re looking for funds that might be accessible to the average investor or advisor; we include active ETFs but not passive ones. That last restriction allows me to pretend that neither ProShares Pet Care ETF nor the US Vegan Climate ETF is about to be inflicted on us.
There are 22 retail funds and active ETFs in registration below. It’s reassuring to me that I immediately reacted to a couple by scanning my portfolio for space: 361 Global Equity Absolute Return (great manager and proven discipline but that be tripped up by expenses), Aperture New World Opportunities (intriguing manager), Fuller & Thaler Behavioral Unconstrained Equity Fund (good record for exploiting others’ behavioral biases), Polen ISG (the other Polen funds are very solid), Westwood Multi-Asset High Income Fund (a really good manager who’d been treated really poorly returns) … and one fund that invests in catastrophe bonds. Fascinating.
361 Global Equity Absolute Return Fund
361 Global Equity Absolute Return Fund will seek absolute (positive) returns. The plan is to create a global long/short equity portfolio that remains just 0-30% net long. The fund will be managed by Harindra de Silva, Dennis Bein and David Krider, all of Analytic Investors. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,500.
ACM Tactical Income Fund
ACM Tactical Income Fund will seek to generate income, with capital preservation as a secondary objective. The plan is to toggle back and forth between high-yield securities (including those in the emerging markets), US treasuries and cash. They’ve got a bunch of trigger levels which will cause them to move incrementally toward or away from risk. The fund will be managed by Jordan Kahn. Its opening expense ratio has not been announced, and the minimum initial investment for the no-load institutional shares will be $10,000.
Alphacentric/16th Amendment Municipal Opportunities Fund
Alphacentric/16th Amendment Municipal Opportunities Fund will seek to provide income exempt from federal income tax with capital appreciation as a secondary objective. The plan is to complicate a simple proposition by investing in muni bonds, up to 75% of which can be high-yield, closed-end funds and a bunch of derivatives. The fund will be managed by a team from 16th Amendment Advisors LLC. Its opening expense ratio is 1.80%, and the minimum initial investment will be $2,500.
Alta Quality Growth Fund
Alta Quality Growth Fund will seek long-term growth of capital with lower than market volatility. The plan is to buy 35-50 mid- to large-cap US growth stocks. The fund will be managed by Melanie Peche and Michael O. Tempest. (You have to ask, if it wants to be a low-vol fund, can Tempest tame the storm?) Its opening expense ratio is 0.79%, and the minimum initial investment will be $10,000.
American Beacon AHL TargetRisk Fund
American Beacon AHL TargetRisk Fund will seek capital growth. The plan is to invest in stocks, bonds and commodities through derivatives, then vary derivative exposure to generate a stable level of volatility. The volatility target is 10%, so the asset class exposure would be varied in order to generate the highest available returns that you can get with 10% volatility. The fund will be managed by Russell Korgaonkar and Matthew Sargaison of AHL Partners, LLP. Its opening expense ratio is 1.43%, and the minimum initial investment will be $2,500.
Amplify Growth Opportunities ETF
Amplify Growth Opportunities ETF, an actively-managed ETF, seeks capital appreciation. The plan is to find securities (ready for this?) that “will experience outsized future growth.” The prospectus is largely uninformative on how they will achieve that objective. It likewise does not name the individuals who will be responsible for pulling it off. And, too, its opening expense ratio has not been released.
Anchor Tactical World Strategies Fund
Anchor Tactical World Strategies Fund will seek above average total returns over a full market cycle with lower correlation and reduced risk when compared to traditional world indices. The plan is to “allocate assets among various strategies based on the adviser’s research and analysis regarding market trends.” The fund will be managed by Garrett Waters. Its opening expense ratio has not been disclosed though a really high management fee has been, and the minimum initial investment will be $2,500.
Aperture New World Opportunities Fund
Aperture New World Opportunities Fund will seek total return, consisting of current income and capital appreciation. The plan is to invest in emerging markets fixed income and equity securities, and currencies. The fund will be managed by Peter N. Marber, PhD. Over his 30 year career, he’s worked in EM investing in a bunch of top tier firms and has taught at fancy Eastern universities. Its opening expense ratio is 1.33%, and the minimum initial investment will be $1,000.
City National Rochdale Short Term Emerging Markets Debt Fund
City National Rochdale Short Term Emerging Markets Debt Fund seeks to generate interest income and preserve capital in order to achieve positive total returns. The plan is to buy short term (under two year), investment grade EM debt. The fund will be managed by Garrett R. D’Alessandro, Matthew Peron and Thomas H. Ehrlein. Its opening expense ratio has not been announced. Retail shares are only available through third parties, and CNR lets those agents set their own minimums. The most interesting twist: “The Adviser and sub-adviser intend to accept investments for a subscription period of approximately six months after the Fund’s inception, after which the Fund intends to close to additional investment.”
First Trust Long Duration Opportunities ETF
First Trust Long Duration Opportunities ETF, an actively-managed ETF, seeks to generate current income with a focus on preservation of capital. The plan is to invest in mortgage-related securities, including mortgage dollar rolls. (Nope, not a clue.) The fund will be managed by Jim Snyder and Jeremiah Charles of First Trust Advisers. Its opening expense ratio has not been disclosed.
Frontier MFG Global Sustainable Fund
Frontier MFG Global Sustainable Fund will seek attractive risk-adjusted returns over the medium- to long-term while reducing the risk of permanent capital loss. The plan is to create a non-diversified portfolio of 20-50 high-quality companies which both pass ESG screens and are market leaders. The fund will be managed by Domenico Giuliano. Its opening expense ratio is 0.95%, and the minimum initial investment will be $10,000.
Fuller & Thaler Behavioral Unconstrained Equity Fund
Fuller & Thaler Behavioral Unconstrained Equity Fund will seek long-term capital appreciation. The plan is to use F&T unparalleled depth of knowledge on behavioral finance – basically, the patterns of predictable irrationality on the part of other investors – to build a non-diversified portfolio of U.S. stocks. The fund will be managed by Raymond Lin and Raife Giovinazzo. Its opening expense ratio is 1.25%, and the minimum initial investment will be $1,000. F&T are simultaneously launching two other funds which use the same discipline, and the same managers, to target “small-mid core” and micro-cap stocks.
Goldman Sachs Access Ultra Short Bond ETF
Goldman Sachs Access Ultra Short Bond ETF, an actively-managed ETF, seeks to provide current income with preservation of capital. The plan is to invest globally in investment grade government and non-government bonds, with the caveat that it “will concentrate its investments in the financial services group of industries.” Ultra short is “under three years.” The fund will be managed by David Fishman, Matthew Kaiser, Jason Singer, and David Westbrook of GSAM. Its opening expense ratio, which is a really important matter in a low-return asset class, has not been released.
Lazard International Compounders Portfolio
Lazard International Compounders Portfolio will seek long-term capital appreciation. The plan is to invest in “Compounders,” high quality businesses that can generate, and sustain, high levels of financial productivity (i.e., return on equity, return on capital and cash flow return on investment). One idea is that these firms produce cash that they can re-invest in the business without resorting to capital markets. The fund will be managed by a Lazard team. Its opening expense ratio is 1.10%, and the minimum initial investment will be $2,500.
Mirova International Sustainable Equity Fund
Mirova International Sustainable Equity Fund will seek long-term capital appreciation. The plan is to invest in equity securities of companies that it expects will benefit from major global transitions and which also meet “the Adviser’s minimum ESG standards.” The fund will be managed by Jens Peers and Hua Cheng of Ostrum Asset Management, formerly Natixis Asset Management. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,500.
Polen International Small Company Growth Fund
Polen International Small Company Growth Fund will seek long-term growth of capital. The plan is to invest in non-US small cap stocks which have four characteristics: (i) consistent and sustainable high return on capital, (ii) strong earnings growth and free cash flow generation, (iii) strong balance sheets typically with low or no net debt to total capital and (iv) competent and shareholder-oriented management teams. Polen’s large cap International Growth and Global Growth funds have been exceptional. The fund will be managed by Rob Forker. Its opening expense ratio has not been released, and the minimum initial investment will be $3,000, reduced to $2,000 for IRAs and accounts established with an automatic investing plan.
Rational Insurance Linked Income Fund
Rational Insurance Linked Income Fund will seek total return. The plan is to invest in a combination of event-linked bonds and securities issued by insurance companies. At base, businesses buy insurance against natural disasters and that insurance gets securitized as event-linked bonds. If a disaster doesn’t occur, the bondholder makes money. “[Name of Sub-Advisor] is the Fund’s investment sub-advisor (the “Sub-Advisor”).’ Great. Its opening expense ratio is 1.8%, and the minimum initial investment will be $1,000.
Sierra Tactical Municipal Fund
Sierra Tactical Municipal Fund will seek total return, including tax-free income from the dividends of underlying municipal bond funds, while seeking to limit downside risk. It will be a fund of muni bond funds and ETFs; its fundamental impulse is to limit downside risk. The fund will be managed by “Dr. Sleeper and Mr. Wright.” Its opening expense ratio for class N shares is 1.65% , and the minimum initial investment will be $10,000.
Virtus WMC Risk-Managed Alternative Equity ETF
Virtus WMC Risk-Managed Alternative Equity ETF, an actively-managed ETF, will seek superior risk-adjusted total returns over the long term. The plan is for Wellington Management to set a target beta, then to use equities and an equity option overlay to achieve that market beta. The hope is to mostly keep up in rising markets and count on substantial protection in falling ones. The fund will be managed by Gregg R. Thomas, and Thomas S. Simon, of Wellington Management. Its opening expense ratio has not been disclosed.
Westwood Multi-Asset High Income Fund
Westwood Multi-Asset High Income Fund will seek to provide a high level of current income. The plan is to invest in income-producing fixed income and equity securities with the prospect of a defensive covered-call overlay. In general, about a third of the portfolio will be invested in equities. The fund will be managed by Michael J. Carne. That’s a promising development, since Mr. Carne managed a really first-rate fund, Nuveen NWQ Flexible Income Fund (NWQAX). He built a very good, conservative allocation fund that held stocks, bonds and convertibles. We wrote about the fund a while ago: three years after launch it received a five-star rating from Morningstar (celebration!!), followed a couple weeks later by Morningstar’s decision to reclassify it as a “convertibles” fund (it wasn’t) whence it plunged to one-star. The adviser appealed the ruling, it was reclassified, regained its stars and did splendidly. Then corporate restructuring occurred and Mike was off “in search of other opportunities.” Now he’s back, and I’m glad. Its opening expense ratio is 1.25%, and the minimum initial investment will be $5,000.
