Before funds and ETFs can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before year’s end because that allows them to have clean “year to date” and calendar year results to share. These launches will likely occur in late May or June so that they’ll at least have full-quarter results for 2019 Q3.
The team behind Harbor Focused International has been recognized as one of the best asset managers in Europe, while the advisers behind DoubleLine Emerging Markets Local Currency Bond Fund and Vanguard Global ESG Select Stock Fund are among the best in US fixed income and equity investing, respectively. And yet, the Kensington Managed Income Fund might have the best underlying performance of them all. That makes it a good month.
Aegon Short Duration High Yield Fund
Aegon Short Duration High Yield Fund will seek a high level of current income. The plan is to invest in high yield securities, including those in default, with an average weighted portfolio duration of 36 months or less. The portfolio will be invested primarily in corporate bonds but might also hold foreign sovereign debt, bank loans and convertible securities. They also apply an ESG screen. The fund will be managed by a team from Aegon USA Investment Management, LLC. Aegon is a global investment manager with $330 billion in assets and offices in … Cedar Rapids, Iowa? Potential investors will want to review a substantial discussion, contained in the prospectus of SEC actions against the advisor. Its opening expense ratio is 0.95% after waivers, and the minimum initial investment will be $2,000.
Aegon Emerging Markets Debt Fund
Aegon Emerging Markets Debt Fund will seek to maximize total return, consisting of income and capital appreciation. The plan is to invest in “all varieties” of EM fixed income securities, including derivatives and exchange-traded funds. “All varieties” is both “all types” and “all maturity, duration and credit qualities.” They may hedge various portfolio risks and also apply an ESG screen. The fund will be managed by a team from Aegon USA Investment Management, LLC. Aegon is a global investment manager with $330 billion in assets and offices in Cedar Rapids, Iowa. Potential investors will want to review a substantial discussion, contained in the prospectus of SEC actions against the advisor. Its opening expense ratio is 1.00% after waivers, and the minimum initial investment will be $2,000.
AGFiQ Dynamic Hedged U.S. Equity ETF
AGFiQ Dynamic Hedged U.S. Equity ETF, an actively-managed ETF, seeks long-term capital appreciation with lower than market volatility. The plan is to use a multi-factor quantitative model to make sector bets within the S&P 500. They’ll hedge market risk by investing, to a greater or less extent, in the AGFiQ U.S. Market Neutral Anti-Beta Fund (BTAL) and cash equivalents. BTAL is a surprisingly volatile fund (it has lost money in four of the seven years of its existence, but made 15% in 2018) so one rather hopes its use will be exceedingly judicious.The fund will be managed by a team from FFCM LLC, Boston-based smart-beta / factor-based investors that AGF bought last year. Its opening expense ratio has not been disclosed.
AGFiQ Global Infrastructure ETF
AGFiQ Global Infrastructure ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to use a multi-factor quantitative model to screen for growth, value, quality and risk characteristics. As a risk management measure, the portfolio will have constraints on country, industry, group, sector and individual security concentrations. The fund will be managed by a team from FFCM LLC, Boston-based smart-beta / factor-based investors that AGF bought last year. Its opening expense ratio has not been disclosed.
CIBC Atlas International Growth Fund
CIBC Atlas International Growth Fund will seek long-term capital appreciation. The plan is to invest in 40-70 stocks that have superior quality and growth characteristics. As part of the risk management strategy, stocks are placed into one of three baskets (Quality Compounders, Emerging Growth, Risk Mitigators), with the implication that the portfolio might systematically favor one basket over another at various points. The fund will be managed by Daniel Delany and Matthew Scherer of CIBC Private Wealth Advisors. The current prospectus includes the record of the underlying strategy since 2008. The cumulative data and 2018 performance are missing but the general pattern suggests this is a fairly high volatility approach. Its opening expense ratio is 1.56%, and the minimum initial investment will be $3,000.
DoubleLine Emerging Markets Local Currency Bond Fund
DoubleLine Emerging Markets Local Currency Bond Fund will seek high total return from income and capital appreciation. The plan is to invest in pretty much in any attractively valued IOUs (here’s their text: “The Adviser interprets the term ‘bond’ broadly as an instrument or security evidencing what is commonly referred to as an IOU”) in any EM country, with due cautiousness. The fund will be managed by a large team from DoubleLine. Its opening expense ratio has not been disclosed, and the minimum initial investment for “N” shares will be $2,000.
Harbor Focused International Fund
Harbor Focused International Fund will seek long-term growth of capital. The plan is to use pretty rigorous, pretty traditional fundamental analysis to select 25-40 blue chips which they anticipate holding for 3-5 years on average. The fund will be managed by a team from the French firm Comgest Asset Management International. Comgest has over $30 billion in assets and a bunch of “best asset manager in Europe” awards. It appears that this will be its first product for US investors. Its opening expense ratio is 1.22%, and the minimum initial investment will be $2,500.
Homestead Intermediate Bond Fund
Homestead Intermediate Bond Fund will seek high level of current income consistent with preservation. The plan is to create a sort of go-anywhere, do-anything portfolio that looks for opportunities globally, in a wide array of fixed-income securities, while maintaining due caution about risk. The fund will be managed by Mauricio Agudelo and Ivan Naranjo, both of RE Advisers which is Homestead’s parent. They’re an awfully trustworthy bunch. Its opening expense ratio has not yet been disclosed, and the minimum initial investment will be $500.
HSBC Ultra Short Bond Fund
HSBC Ultra Short Bond Fund will seek current income consistent with the preservation of capital. The plan is to build a global (including EM) portfolio of investment grade fixed income securities. It will normally maintain a dollar-weighted average maturity of up to 1.5 years and a dollar-weighted average effective duration of up to 0.50 years. The fund will be managed by Jason Moshos of HSBC Global. Its opening expense ratio is 0.20%, and the minimum initial investment for “A” shares will be $1,000. Despite the “A” designation, the shares are no-load and carry the same expense ratio as the “I” shares. Curious.
Kensington Managed Income Fund
Kensington Managed Income Fund will seek “income.” The plan is to construct a fund of income funds with a portfolio that might be tweaked daily. The fund will be managed by Bruce P. DeLaurentis of Advisors Preferred, LLC. Mr. DeLaurentis entered the asset management business in 1984 after serving for 20 years in the US armed forces. Over the past decade, Mr. DeLaurentis’s strategy, manifested in separately managed accounts, has returned an average of 10.1% annually while the Barclays bond aggregate returned 3.5%. Its opening expense ratio is 2.97% and “A” shares nominally carry at 4.75% fee, which seems like a near-fatal combination. The minimum initial investment will be $1,000.
MainStay MacKay Intermediate Tax Free Bond Fund
MainStay MacKay Intermediate Tax Free Bond Fund will seek current income exempt from regular federal income tax. The plan is to invest in muni bonds (duh); the portfolio’s weighted average duration will range from 3-10 years. Some of the portfolio might be non-investment-grade debt. The fund will be managed by a quite large team from MacKay Shields. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1,000.
Vanguard Global ESG Select Stock Fund
Vanguard Global ESG Select Stock Fund will seek to maximize returns while having greater exposure to companies with attractive environmental, social, and governance characteristics. The plan is to start by looking for firms with a proven track record of effective capital allocation, leading ESG practices and a wide and sustainable gap between return on capital and cost of capital. They’ll then look at a series of secondary screens (employee engagement, corporate culture, adaptability) before constructing the portfolio. The fund will be managed by Mark Mandel and Yolanda Courtines of Wellington Management. Its opening expense ratio is 0.55% and the minimum initial investment will be $3000.
Wells Fargo Special International Small Cap Fund
Wells Fargo Special International Small Cap Fund will seek long-term capital appreciation. The plan is to build a diversified portfolio of firms which are “well managed, have flexible balance sheets and sustainable cash flows, and that are undervalued companies relative to an assessment of their intrinsic value.” They don’t generally hedge currency exposure. The fund will be managed by a team from Wells Capital Management. The team has been running this strategy in separately managed accounts for about five years. Since inception, the SMA composite has outperformed its benchmark by about 160 bps/year, with a really substantial advantage in 2018 when the composite fell 12% and its benchmark declined by 18%. Its opening expense ratio is 0.95%, and the minimum initial investment will be $1 million but there is broad waiver language for brokerages, 529 plans, retirement plans and so on.
