The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration will become available by late October.
Our list contains 22 new funds and active ETFs. We don’t track passive ETFs but, if we did, we’d mention the wicShares Merger Arbitrage ETF , offered up by Water Island Capital, advisors to the venerable Arbitrage Fund (ARBFX) and three others. Funds worth putting on your radar include Brown Advisory Tax-Exempt Sustainable Bond Fund, a fund combining low volatility, sustainability and tax avoidance; the family of Harbor Robeco Conservative Equity funds, a distinct break from Harbor’s normal model, providing lower-risk, ESG-screened exposure to the US, developed international, emerging and global markets; and the Oelschlager Equity and Technology Funds, which marks the return of a talented and thoughtful manager following his abrupt and startling departure from the family of Oak Associates funds that his father started and for which he was manager and co-CIO.
Absolute Core Strategy ETF
Absolute Core Strategy ETF, an actively-managed ETF, seeks positive absolute returns over a period of approximately five years. We’ll note, in passing, that there are 1400 funds that have managed that exact task over the past 10 years and a total of six that have managed it over the past 20. The plan is to buy 20-25 undervalued stocks. The fund will be managed by Robert Mark of St. James Investment Company. Mr. Mark has been using this same strategy in a set of separate accounts that he’s managed for, well, about three months. June 1, 2019, according to the prospectus. Not a lot of guidance there. Its opening expense ratio is 0.85%.
AlphaCentric LifeSci Healthcare Fund
AlphaCentric LifeSci Healthcare Fund will seek long-term capital appreciation. The plan is to invest in healthcare stocks and, if they get nervous, maybe inverse ETFs and defensive options, too. The fund will be managed by Mark G. Charest, Ph.D. of LifeSci Fund Management. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,500.
Anfield Tactical Fixed Income ETF
Anfield Tactical Fixed Income ETF, an actively-managed ETF, seeks total return with capital preservation as a secondary objective. The plan is to invest tactically in three to 10 income-oriented ETFs; the deviously simple idea is to buy sectors that are going to rise and avoid the others. The fund will be managed by Peter van de Zilver and David Young of Anfield Capital. Its opening expense ratio is 1.30%.
Anfield U.S. Equity Sector Rotation ETF
Anfield U.S. Equity Sector Rotation ETF, an actively-managed ETF, seeks to outperform traditional large-cap equity indices and styles over full market cycles by investing in, and rotating through, the 11 sectors of the equity market. The fund will be managed by Peter van de Zilver and David Young of Anfield Capital. Its opening expense ratio is 1.60%.
BrightStone Li-Fi Technology Opportunities ETF
BrightStone Li-Fi Technology Opportunities ETF, an actively-managed ETF, seeks capital appreciation. The plan is to purchase the stocks of companies whose products or services are tied to Light Fidelity (“Li-Fi”) technology. Li-Fi is a wireless network that transmits signals via light rather than via radio signals. This led me down a minor rabbit hole as I tried to figure out how exactly that would work; the short answer is that there would be an LED mounted in the ceiling, flickering at 1 Mhz and connected devices all over the room, even those not in direct line-of-sight, could pick it up. The fund will be managed by David Bolton of BrightStone Global LLC. Its opening expense ratio has not been disclosed.
Brown Advisory Tax-Exempt Sustainable Bond Fund
Brown Advisory Tax-Exempt Sustainable Bond Fund will seek high level of current income exempt from Federal income tax by investing primarily in intermediate-term investment grade municipal bonds while giving special consideration to certain environmental, social, and governance criteria. The fund will be managed by Stephen M. Shutz and Amy Hauter of Brown Advisory. Its opening expense ratio is 0.61%, and the minimum initial investment will be $100.
Franklin Blockchain Enabled U.S. Government Money Fund
Franklin Blockchain Enabled U.S. Government Money Fund will seek as high a level of current income as is consistent with the preservation of shareholders’ capital and liquidity. It’s just a money market fund. Not to say that the “blockchain enabled” part is tawdry marketing but, really. Here’s the role of blockchain: “Blockchain-based shares; no investment in cryptocurrencies… the Fund’s transfer agent will maintain the official record of share ownership in book-entry form, the ownership of the Fund’s shares will also be recorded on the Stellar network, an electronic distributed ledger that is secured using cryptography (referred to as a “blockchain”) …The Fund’s investment manager believes that blockchain-based shares will provide increased transparency to Fund shareholders and may, in the future, permit reduced settlement times and provide other benefits to Fund shareholders.” The fund will be managed by Franklin Advisers. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $20.
Goldman Sachs Income Fund
Goldman Sachs Income Fund will seek a high level of current income, and secondarily, capital appreciation. The plan is to create a multi-sector portfolio of U.S. and foreign investment grade and non-investment grade fixed income investments of varying maturities. The average maturity will range from 0 – 8 years. The fund will be managed by Ashish Shah, Co-Chief Investment Officer of Global Fixed Income, and Ron Arons, both of GSAM. Its opening expense ratio on any of the six share classes has not been disclosed, but the minimum initial investment for Investor class shares will be zero.
Harbor Mid Cap Fund
Harbor Mid Cap Fund will seek long-term total return. The plan is to buy undervalued mid-cap stocks, I think; the prospectus is really not a marvel of clarity and concision. The fund will be managed by Paul E. Viera of EARNEST Partners. Its opening expense ratio is 1.25%, and the minimum initial investment will be $2,500.
Harbor Robeco US Conservative Equities
Harbor Robeco US Conservative Equities will seek long-term growth of capital. The plan is to invest in stocks with “a lower downside risk profile relative to the U.S. equity markets.” Such stocks might be characterized by the following:
- low volatilities,
- low market sensitivities,
- high dividend yields,
- attractive valuation,
- strong momentum, and
- positive analyst revisions.
The team will also impose an ESG screen but, on face, a wimpy one. The goal is an ESG score “at least as high as those of the Fund’s [as yet unnamed] benchmark index.” Really, if your benchmark index does not have an ESG screen, how high a bar are you setting for yourself just to match it? The fund will be managed by a team from Robeco Institutional Asset Management US. Its opening expense ratio is 0.80%, and the minimum initial investment will be $2,500.
The same prospectus lists three other funds managed by the same team, with the same discipline and same objective. They are:
| Harbor Robeco International Conservative Equities Fund |
| Harbor Robeco Global Conservative Equities Fund |
| Harbor Robeco Emerging Markets Conservative Equities Fund |
This is all sort of a big deal because this is a break for Harbor Funds. Their usual modus operandi is to find a fund they like and then clone it. It’s very rare for them to start with a blank slate.
Harbor Robeco Emerging Markets Active Equities Fund
Harbor Robeco Emerging Markets Active Equities Fund will seek long-term growth of capital. The plan is to invest in EM stocks using “a bottom-up driven investment strategy to gain exposure to the value, quality, momentum, and analyst revision factors within a tracking error limit.” The team will also impose an ESG screen. The fund will be managed by a team slightly different team from Robeco Institutional Asset Management US. Its opening expense ratio is 1.24%, and the minimum initial investment will be $2,500.
Nationwide Risk-Managed Income ETF
Nationwide Risk-Managed Income ETF, an actively-managed ETF, seeks current income with downside protection. The plan is to buy the Nasdaq-100 Index and an options collar. The hope is that the options will yield 6-10% a year, providing the risk-management in the name. The fund will be managed by a team from Harvest Volatility Management. Its opening expense ratio has not been disclosed.
Oelschlager Equity Fund
Oelschlager Equity Fund will seek long-term capital appreciation. The plan is to invest in 25-40 domestic growth stocks, and try to be patient with them. The fund will be managed by Mark Oelschlager, formerly manager of Pin Oak Equity Fund, the Live Oak Health Sciences Fund and the Red Oak Technology Select Fund. Its opening expense ratio is 1.10%, and the minimum initial investment will be $2,000.
Oelschlager Technology Fund
Oelschlager Technology Fund will seek long-term capital appreciation. The plan is to invest in 25-40 tech stocks and try to be patient with them. The fund will be managed by Mark Oelschlager, formerly manager of Pin Oak Equity Fund, the Live Oak Health Sciences Fund and the Red Oak Technology Select Fund. Its opening expense ratio is 1.10%, and the minimum initial investment will be $2,000.
QRAFT AI-Enhanced U.S. High Dividend ETF
QRAFT AI-Enhanced U.S. High Dividend ETF, an actively-managed ETF, seeks long-term total returns through regular dividend income and capital appreciation. Qraft is a South Korea-based provider of artificial intelligence investment systems and currently offers services to various financial institutions in Korea. The Adviser has licensed Qraft’s proprietary artificial intelligence security selection process for the management of the Fund. Invoking terms like “deep learning technologies” and “Bayesian neural networks,” the plan appears to be buying 100 dividend-paying stocks based on estimations of short-term price momentum. The fund will be managed by Andrew Serowik and Travis Trampe who will “purchase and sell securities based on recommendations by the AQUA database” but who also have “full discretion” to ignore it. Its opening expense ratio has not been disclosed.
Rational/Pier 88 Convertible Securities Fund
Rational/Pier 88 Convertible Securities Fund will seek total return. The plan is to invest in convertible securities. The fund is a converted hedge, and will be managed by Pier 88 Investment Partners. Its opening expense ratio is 0.99%, and the minimum initial investment will be $1,000. As an aside, for $1,000 you can either invest in the “Institutional” share class and pay 0.99% or the “C” share class and pay 1.99% for the same thing. Ummm … is this a test?
Sierra Warrington Absolute Return Fund
Sierra Warrington Absolute Return Fund will seek total return. The plan is to invest primarily in long and short call and put options on futures contracts on the S&P 500 Index, and in cash and cash equivalents. The fund will be managed by Scott C. Kimple and Mark Adams of Warrington Asset Management. Its opening expense ratio is 2.44%, and the minimum initial investment will be $10,000. Note to the fund adviser: you forgot to put the name of the fund in the prospectus. The first time it’s mentioned is in the mailing address, near the end of the prospectus. Marketing tip: think about putting it on the cover!
Source Dividend Opportunity ETF
Source Dividend Opportunity ETF (DVOP), an actively-managed ETF, seeks total return. The plan is to buy 25-40 dividend paying stocks, including the ten highest yielding stocks in S&P 500 Value Index. The fund will be managed by Brendan Voege of Source Asset Management. Its opening expense ratio is 0.5%.
Sprott Gold Fund
Sprott Gold Fund will seek long-term capital appreciation. The plan is to invest in gold miners and processors, with the proviso that up to 20% of the fund’s assets might be invested directly in gold bullion. This is a rechristened version of Tocqueville Gold Fund and the fund will be managed by the same three guys. Bearish investors are generally blissful about owning gold; that said, the predecessor fund returned an average of 0.6% annually over the past decade. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1 million.
