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 we survey actively managed funds and ETFs in the pipeline. We thought the “actively-managed” proviso would allow us to avoid the pain of reporting on the endless array of ETFs that have commissioned indices of … oh, SPACs plus cannabis or cryptocurrencies plus hotel stocks or stocks also loved by Gamestop investors. Sadly, we were wrong because there are now actively managed ETFs (below) proposing to target marijuana (2), bitcoin (2), and every dumb idea that has briefly captured the frenzy of the investing community (1).
This month brings 32 new products in the pipeline, most of which will launch by the end of June. The recent record, though, is that many authorized products are being withheld from the market; that is, there are funds that advisers could launch but haven’t chosen to. It might be a sign of market anxiety.
A half dozen of the funds aim at the ESG or climate market, with the largest set of those being released as Fidelity funds or active ETFs.
AdvisorShares Gerber Kawasaki ETF
AdvisorShares Gerber Kawasaki ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to buy “the top companies within the fastest growing current or future global macroeconomic trends.” That said, they might also buy ETFs. On whole, they anticipate 21-30 securities. The fund will be managed by Ross Gerber. Its opening expense ratio is X.XX%.
AdvisorShares Plant Medicine ETF
AdvisorShares Plant Medicine ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to invest in firms making their money off psychedelics, magic mushrooms, and pot. The fund will be managed by Dan S. Ahrens. Formerly manager of the Vice Fund. Its opening expense ratio is is X.XX%.
Angel Oak Core Impact Fund
Angel Oak Core Impact Fund will seek total return while giving special consideration to positive aggregate environmental, social, and governance outcomes. The plan is to create a pretty much unconstrained global fixed income portfolio: everything from Treasuries and asset-backed securities to private placements and junk bonds. The fund can also employ a variety of hedges, including short selling. The fund will be managed by Clayton Triick, Colin McBurnette, and Sam Dunlap. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1,000.
Asian Growth Cubs ETF
Asian Growth Cubs ETF, an actively managed ETF, seeks to provide long-term growth. The plan is to create an ESG-screened portfolio of stocks from firms headquartered in Bangladesh, Indonesia, Pakistan, the Philippines, and Vietnam (the above-referenced “Cubs”). The fund will be managed by a team led by Maurits Pot of Kingsway Capital. Kingsway is a London-based advisor, though the managers all appear to be Americans with experience at firms like Goldman Sachs and Invesco. Its opening expense ratio has not been disclosed.
BBH Select Series – Mid Cap Fund
BBH Select Series – Mid Cap Fund will seek long-term growth of capital. The plan is to “buy and own” ESG-screened mid-cap stocks whose underlying firms show “qualitative merits, competitive profile and prospective value creation potential.” The fund will be managed by Timothy Harris. Mr. Harris has 21 years of investment experience but appears to manage no other funds or accounts. Its opening expense ratio, as written in the preliminary prospectus, is [0%], but I wouldn’t be getting your hopes up. The minimum initial investment will be $5,000.
BNY Mellon Sustainable US Equity ETF
BNY Mellon Sustainable US Equity ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to invest in the stocks of U.S. companies that demonstrate attractive investment attributes and sustainable business practices. The fund will be managed by Jeff Munroe and Yuko Takano of Newton Investment Management Limited. Its opening expense ratio has not been released. The same prospectus also covers international and global EM versions of the strategy.
Cabana Target Sector Rotation Conservative ETF
Cabana Target Sector Rotation Conservative ETF, an actively managed ETF, seeks long-term growth. The plan is to use their Cyclical Asset Reallocation Algorithm to figure out where to go, then to buy other ETFs to get there. No word on how conservative “Conservative” will be. The fund will be managed by a Cabana Asset Management team led by Andrew Serowik. Its opening expense ratio has not been disclosed. The same prospectus also covers “Moderate” and “Aggressive” versions of the fund.
Cannabis Growth ETF
Cannabis Growth ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to invest in companies engaged in legal cannabis-related businesses, including industrial hemp. They promise to target only firms compliant with federal and local law. There’s also a proviso to hedge with call and put options. This ETF represents another conversion of a mutual fund, the Cannabis Growth Fund, into an active ETF format. The fund suffered a 62.5% maximum drawdown between launch and March 2020, rallied ferociously since, and is now down just 13% since launch. The fund will be managed by Korey Bauer. Its opening expense ratio is 0.67% after a huge fee waiver.
Conestoga Mid Cap Fund
Conestoga Mid Cap Fund will seek long-term growth of capital. The plan is to go old school, with a growth-at-a-reasonable-price discipline, seeking companies with sustainable advantages, implemented through bottom-up analysis. The fund will be managed by Derek Johnston and Ted Chang. Mr. Johnston helps manage the firm’s four-star SMid Cap Fund. Its opening expense ratio is 1.05%, and the minimum initial investment has not been announced.
Fidelity Climate Action Fund
Fidelity Climate Action Fund will seek long-term growth of capital. The plan is to invest globally in “climate-aware companies.” Frankly, the “Action” part of the fund’s name strikes us as a misnomer. The fundamental inclusion criterion is not “taking action of manage climate change,” it’s a far wimpier “address climate change or its impact directly or indirectly” and it appears that simply generating very little CO2 for whatever reason would make you eligible. The fund will be managed by Asher Anolic. Its opening expense ratio has not been disclosed, and there is no minimum initial investment.
Fidelity Environmental Bond Fund
Fidelity Environmental Bond Fund will seek a high level of current income. The plan is to invest, primarily, in investment-grade bonds of issuers “that develop or provide products or services that seek to provide environmental solutions and/or support efforts to reduce their own environmental footprint, and debt securities that support environmental projects.” The fund will be managed by an as-yet-unnamed party. Its opening expense ratio has not been disclosed, and there is no minimum initial investment.
Fidelity Preferred Securities & Income ETF
Fidelity Preferred Securities & Income ETF, an actively managed ETF, seeks high total return through a combination of current income and capital appreciation. The plan is to invest in preferred “and other income-producing” securities issued by both US and non-US corporations. The fund will be managed by Adam Kramer and Brian Chang. Its opening expense ratio has not been disclosed.
Fidelity Sustainability U.S. Equity ETF
Fidelity Sustainability U.S. Equity ETF, an actively managed non-transparent ETF, seeks long-term growth of capital. The plan is to invest in US companies that have “proven or improving sustainability practices.” (“or improving” … ehh.) The fund will be managed by Nicole Connolly and Michael Robertson. Its opening expense ratio has not been disclosed.
Fidelity Women’s Leadership ETF
Fidelity Women’s Leadership ETF, an actively managed non-transparent ETF, seeks long-term growth of capital. The plan is to invest in companies that prioritize and advance women’s leadership and development. The fund will be managed by Nicole Connolly and Michael Robertson. Its opening expense ratio has not been disclosed.
First Trust Expanded Technology ETF
First Trust Expanded Technology ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to use a computer to identify stocks in the information technology, consumer discretionary, and communication services sectors. The fund will be managed by as many as six unnamed people. Its opening expense ratio has not been disclosed.
FOMO ETF
FOMO ETF, an actively managed ETF, seeks to provide capital appreciation. The plan is to invest in whatever is trendy – SPACs, emerging markets, junk bonds, IPOs… The fund will be managed by Matthew Tuttle who runs a bunch of other trendy funds and ETFs, such as the SPAC and New Issue ETFs. Its opening expense ratio has not been disclosed. (And no, I’m not giving you a link to it.)
Jacob Forward ETF
Jacob Forward ETF, an actively managed ETF, seeks long-term growth of capital. The plan is to invest in a broad group of (mostly) domestic companies, including many that are in their early stages of development, that “can leverage innovative technology to obtain sustainable competitive advantages in order to generate superior rates of growth.” (A sort of marketing buzz-term bingo winner.) The fund will be managed by Ryan Jacob and Darren Chervitz. Its opening expense ratio has not been disclosed.
John Hancock Mid Cap Growth Fund
John Hancock Mid Cap Growth Fund will seek long-term growth and capital appreciation. The plan is to use proprietary fundamental analysis to identify medium-sized companies with significant capital appreciation potential. (Two lexical notes. First, “long-term growth” is a synonym for “capital appreciation.” Second, they are not targeting “medium-sized companies,” they’re targeting companies of any size whose stock valuation is between $1 – 45 billion. The fund will be managed by Mario E. Abularach and Stephen Mortimer. Its opening expense ratio is 1.23%, and the minimum initial investment will be $1,000.
Nuveen Santa Barbara Dividend Growth ETF
Nuveen Small Cap Select ETF
Nuveen Winslow Large-Cap Growth ESG ETF
Nuveen has announced the launch of actively managed, non-transparent ETF versions of three of its funds. The key variable, the expense ratio, has not yet been disclosed for any of them.
Rockcrest Income Stability Fund
Rockcrest Income Stability Fund will seek to provide current income and some capital appreciation (an admirably modest aspiration.) The plan is to invest, directly or through ETFs, in a diversified portfolio of debt and equity securities. Also, derivatives linked to equities, bonds, and currencies with the occasional short selling. The fund will be managed by Robby T. Bryant. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1,000.
Rockefeller Climate Solutions Fund
Rockefeller Climate Solutions Fund will seek long-term growth of capital principally through equity investments in global companies across the market capitalization spectrum offering climate change mitigation or adaptation products and services. It was previously a hedge fund, Rockefeller Climate Solutions Fund, and earlier, Rockefeller Ocean Fund. The fund will be managed by Casey C. Clark and Rolando F. Morillo of Rockefeller & Co. Rockefeller & Co. started life in 1882 as the office handling John D. Rockefeller’s personal investments. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,500.
Semper Brentview Dividend Growth Equity Fund
Semper Brentview Dividend Growth Equity Fund will seek a high level of risk-adjusted current income and capital appreciation. The plan is to buy equity securities of mid to large-capitalization companies that exhibit a commitment to sustainable and growing dividends. The fund will be managed by James R. Boothe and Hai H. Vu. Its opening expense ratio for both low-load “A” and no-load “Investor” shares is 1.25%, and the minimum initial investment will be $1,000 for “A” and $2,500 for “Investor” shares.
Sierra Tactical Risk Spectrum 30 Fund
Sierra Tactical Risk Spectrum 30 Fund will seek to provide total return and to limit volatility and downside risk. The plan is to invest 15-30% of the portfolio into “uptrending” equity funds and ETFs, with the rest in fixed income. The fund will be managed by Kenneth L. Sleeper (PhD) and David C. Wright (JD). Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000. The same prospectus covers the 50 and 70 versions of the strategy.
Simplify Credit Hedge ETF
Simplify Credit Hedge ETF, an actively managed ETF, seeks to hedge credit spread movements arising from an increase in credit spreads, and to benefit from market stress when fixed-income volatility increases, while providing the potential for income. The fund will be managed by Harley Bassman, “Managing Partner & Convexity Maven”, Paul Kim, and David Berns of Simplify Asset Management. Its opening expense ratio has not been disclosed.
Simplify U.S. Equity PLUS Bitcoin ETF
Simplify U.S. Equity PLUS Bitcoin ETF, an actively managed ETF, seeks long-term capital appreciation. The plan is to invest in US equities (what sorts of equities? No word.) with up to 15% of the portfolio in Bitcoin (when would they be doing that? Why? No word.) The fund will be managed by Paul Kim and David Berns of Simplify Asset Management. Its opening expense ratio has not been disclosed.
Sunbridge Capital Emerging Markets Fund
Sunbridge Capital Emerging Markets Fund will seek long-term capital appreciation. The plan is to identify investment themes in emerging markets, then try to find well-managed companies with consumer-driven demand and above-average prospects. Formerly this was Fiera Capital EM. Prior to that, CNR EM. Earlier still, Rochdale Emerging Markets. The fund will be managed by Anindya Chatterjee who has been managing it since 2011. Since inception, the fund has averaged 11.2% annually which pretty much swamps its peers 6.7%, especially given the fund’s below-average volatility. Its opening expense ratio has not been set and the minimum initial investment will be set by whichever platform you buy it on.
USCF Gold Strategy Plus Income ETF
USCF Gold Strategy Plus Income ETF, an actively managed ETF, seeks to track the price of gold and generate a bit of dividend income by selling call options. The fund will be managed by Andrew F Ngim and Jake DeSantis. Its opening expense ratio has not been disclosed.
Valkyrie Innovative Balance Sheet ETF
Valkyrie Innovative Balance Sheet ETF, an actively managed ETF, seeks to provide investors with a total return. (As an aside, if I were to walk up to Kirk, my college’s CFO, and say, “Hey, big guy, how ‘bout we get innovative with our balance sheet?”, he’d turn ghostly pale and press that big red button on his desk.) In any case, the plan here is to “invest principally in the securities of operating companies that have innovative balance sheets,” which is to say “companies into Bitcoin.” The adviser also filed in January 2021 for an ETF called Valkyrie Bitcoin Fund. The fund will be managed by Jeff Kilburg (identified on the firm’s website as “a respected CNBC contributor”) and Dan Deming of KKM Financial. Its opening expense ratio has not been disclosed.
VectorShares Min Vol ETF
VectorShares Min Vol ETF, an actively managed ETF, seeks to provide total return while limiting volatility. The plan is to combine a high-quality fixed-income portfolio with a bunch of S&P 500 options and cash. The fund will be managed by Jeffrey R. Donaldson and Don Flagg. Both are tenured professors at the University of Tampa (beware a professor with a portfolio.) Its opening expense ratio is 1.10%.
Virtus KAR Developing Markets Fund
Virtus KAR Developing Markets Fund will seek capital appreciation. The plan is to find 30-60 companies with sustainable competitive advantages, strong management, and low financial risk who are able to grow over market cycles. The fund will be managed by Hyung Kim and Craig Thrasher. The managers are both international small-cap and EM small-cap analysts, which might tend the eventual portfolio to an outsized weighting in smaller issues. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,500.
YieldX Diversified Income ETF
YieldX Diversified Income ETF, an actively managed ETF, seeks current income. The plan is to target a portfolio with a yield-to-worst between 3-5%. They’re free to buy corporate and sovereign debt, preferred securities, asset-backed securities, and the occasional private placement. The fund will be managed by a team from Red Gate Advisers. Its opening expense ratio has not been disclosed. The same prospectus covers high-income and short-term income ETFs with the same team.
