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. We found 20-some active funds and ETFs in registration. (I hedge on the number because one of the entries covers an entire line of funds which is likely to grow over time.) Expect them to launch by the end of October 2020.
Every month the ETF industry breathlessly trots out a few ideas designed to seize the moment. Think: “Virtual Work and Life ETF.” This month’s leading candidate is the Bleu 75 Political Contributions ETF which will invest in corporations that direct at least 75% of their corporate political contributions (including the companies’ senior management) to the Democratic Party. A note in passing: the trail is littered with the dried-out husks of “red” and “blue” mutual funds. The Humankind US Stock ETF invests in companies based on how much value the company creates for humankind. (Facebook, anyone?) The nominee for the most cumbersome name is TrimTabs Donoghue Forlines Risk Managed Innovation ETF.
Adasina Social Justice All Cap Global ETF
Adasina Social Justice All Cap Global ETF, an actively-managed ETF, seeks capital appreciation and income. The plan is to create “a portfolio of global companies whose business practices are aligned with the social justice investment criteria of Robasciotti & Associates, Inc.,” the adviser. At least 40% of the portfolio will be invested in non-US stocks. The fund will be managed by Rachel J. Robasciotti, Founder and Chief Executive Officer of Adesina; Maya Philipson, co-founder; and Michael Venuto, founder Head of Investments for Global X. Ms. Robasciotti has been pursuing social justice investing for a long time, at least since the launch of Adesina in 2004. Its opening expense ratio has not been disclosed.
Alger 25 ETF
Alger 25 ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in about (you guessed it!) 25 companies, regardless of market cap, which meet Alger’s growth criteria. The fund will be managed by Ankur Crawford, Ph.D. Its opening expense ratio has not been disclosed.
Alger Mid Cap 40 ETF
Alger Mid Cap 40 ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in about (wait for it!) 40 mid-cap companies that meet Alger’s growth criteria. The fund will be managed by Amy Y. Zhang. Its opening expense ratio has not been disclosed.
Causeway Concentrated Equity Fund
Causeway Concentrated Equity Fund will seek long-term growth of capital. The plan is to create a global portfolio of 25-35 value stocks. Their analysis is both quantitative and fundamental with an emphasis on price-to-earnings ratios and yield. The fund will be managed by a team comprised of pretty much everybody at Causeway. Morningstar has rather a lot of faith in Causeway, despite the bumps that some of their funds have hit. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $5,000.
Dodge & Cox Emerging Markets Stock Fund
Dodge & Cox Emerging Markets Stock Fund will seek long-term growth of principal and income. The plan is to find companies that are “temporarily undervalued by the stock market but have a favorable outlook for long-term growth.” On whole, D&C has been only “okay” at international and global investing, though Morningstar considers them the Gold standard as a firm. The fund will be managed by a team headed up by CIO Charles F. Pohl. Its opening expense ratio is 0.70%, and the minimum initial investment will be $2,500.
Domini International Opportunities Fund
Domini International Opportunities Fund will seek long-term total return. The plan is to create an all-cap international portfolio of “companies that demonstrate a commitment to sustainability solutions.” The fund will be managed by Kathleen Morgan, CFA, of SSGA. Its opening expense ratio is 1.40% and the minimum initial investment will be $2,500.
Gotham Enhanced 500 ETF
Gotham Enhanced 500 ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to duplicate the methodology of the five-star mutual fund version of the strategy, which centers on excluding sketchy S&P 500 stocks from the portfolio. The fund will be managed by Joel Greenblatt, Robert Goldstein, and Michael Venuto. Its opening expense ratio has not been disclosed.
Hercules Fund
Hercules Fund will seek aggressive growth of capital. The plan is to use equity and index options, futures, options on futures, and exchange-traded funds to capture alpha from market volatility. The fund will be managed by James A. McDonald. Its opening expense ratio and the minimum initial investment have not been disclosed but the fund will be available only to qualified investors.
PartnerSelect Oldfield International Value Fund
PartnerSelect Oldfield International Value Fund will seek long-term growth of capital. The prospectus helpfully explains that that means to “increase in the value of your investment over the long term” which surely sets it apart from all of the rapscallions plotting to decrease the value of your investment over time. (Sadly, there appears to be a lot of them.) The plan here is to invest in 25-30 mid- to large-cap value stocks of companies located outside the US. EM exposure will be capped at 10%. The fund will be managed by Nigel Waller and Andrew Goodwin. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000, reduced to $2,500 for accounts established with an automatic investing plan.
QRAFT AI-Enhanced U.S. Next Value ETF
QRAFT AI-Enhanced U.S. Next Value ETF (NVQ), an actively-managed ETF, seeks capital appreciation. The plan is to use artificial intelligence, a system pioneered in South Korea, to select a portfolio of US value stocks. The fund will be managed by Andrew Serowik, Travis Trampe, and a robot with softly-glowing blue eyes and impeccable manners. (I’m guessing about that last team member.) Its opening expense ratio has not been disclosed.
Rareview Dynamic Fixed Income ETF
Rareview Dynamic Fixed Income ETF (RFDI), a non-transparent, actively-managed ETF, seeks total return with an emphasis on providing current income. The plan is to invest in fixed-income closed-end funds, seeking arbitrage gains from mispricings between the CEF’s market price and NAV. The fund will be managed by Neil Azous. Its opening expense ratio has not been disclosed.
Rareview Tax Advantaged Income ETF
Rareview Tax Advantaged Income ETF (RTAI), a non-transparent, actively-managed ETF, seeks current income, a substantial portion of which will be exempt from federal income taxes. The plan is to invest in closed-end muni funds, seeking arbitrage gains from mispricings between the CEF’s market price and NAV. The fund will be managed by Neil Azous. Its opening expense ratio has not been disclosed.
Real Asset Strategies Fund
Real Asset Strategies Fund (RAS), an actively-managed ETF, seeks to protect against inflation and provide diversification by investing primarily in liquid assets such as inflation-indexed securities, gold, commodities, and cash. The plan is to use quantitative models that include proprietary value and momentum factors to trade between various asset classes. The fund will be managed by William B. Peterson and Michael Ashton. Its opening expense ratio has not been disclosed.
SmartETFs Sustainable Energy ETF
SmartETFs Sustainable Energy ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in energy companies that provide or support alternative or renewable sources of energy. The fund will be managed by Edward Guinness, Jonathan Waghorn, and Will Riley. Its opening expense ratio is 0.XX%. At least the “0” is encouraging. This ETF is a conversion of the Guinness Atkinson Alternative Energy Fund (GAAEX).
SmartETFs Sustainable Energy II ETF
SmartETFs Sustainable Energy II ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to use the same selection criteria as the original Sustainable Energy ETF but use it to build a focused, equal-weight portfolio. The fund will be managed by Edward Guinness, Jonathan Waghorn, and Will Riley. Its opening expense ratio is X.XX% as contrasted with its sibling’s 0.XX%.
Sterling Capital Focus Equity ETF
Sterling Capital Focus Equity ETF, an actively-managed ETF, seeks long-term capital appreciation. More specifically, the fund seeks to outperform the Russell 1000 Growth Index with a portfolio of 15 to 30 stocks. They will target mid- to large-cap stocks that demonstrate the potential for sustainable competitive advantages, visible reinvestment opportunities, and have experienced management teams. The fund will be managed by Colin R. Ducharme and Jeremy Lopez. Its opening expense ratio is 0.59%.
T. Rowe Price Retirement Blend Funds
T. Rowe Price Retirement Blend Funds are the third target-date series of funds from T. Rowe Price. The first two series were distinguished by one series being a bit more aggressive and the other a bit more cautious. I can’t, for the life of me, see what exactly the niche is for the Blend funds. We’ll follow-up upon launch because T. Rowe Price simply doesn’t do dumb things. We just need to talk with them to figure out why this is a smart one.
T. Rowe Price U.S. Limited Duration TIPS Index Fund
U.S. Limited Duration TIPS Index Fund, an actively-managed ETF, income by investing in inflation-linked securities. They’ll track the Bloomberg Barclays U.S. 1-5 Year Treasury TIPS Index. The fund will be managed by Michael Sewell. Its opening expense ratio is 0.21%.
