Updates
Matthews Asia has named Sean Taylor as its incoming chief investment officer, taking over from Robert Horrocks at the start of next year. Taylor was CIO for Asia Pacific and head of emerging markets at DWS and will assume his new role at Matthews on January 1, 2024. Mr. Horrocks, who has been with Matthews Asia since 2008, will retain his portfolio management responsibilities, which include Matthews Asia Dividend and Matthews Asian Growth & Income.
Matthews hired a new CIO, Cooper Abbott, in the summer of 2022. Since then, the firm has undergone considerable … turmoil? Renewal? Matthews liquidated its two fixed-income funds, launched five active ETFs, and reorganized the management teams at four other funds.
As we reported last month, MFO’s publisher sold his entire position in Matthews Asia Growth & Income. His rationale: “The fund is one of the most conservative ways to access Asian equities, but … it was a holdover from Ancient Times when Andrew Foster (now of Seafarer) managed the fund. The fund has earned 0.20% annually for the past five years and 1.20% for the past decade, and my exposure to stocks (60%) and international stocks (40%) were both far above their targets.”
Briefly Noted . . .
CLOSINGS (and related inconveniences)
Four Aperture Funds were closed immediately to new and existing investors: Aperture New World Opportunities Fund, Aperture Endeavour Equity Fund, Aperture Discover Equity Fund, and Aperture International Equity Fund. No explanation was provided for the closures. Given that current shareholders with automatic investment plans are also being locked out, expect an obituary announcement soon.
SMALL WINS FOR INVESTORS
Blueprint Adaptive Growth Allocation Fund, investor share class, will be converted to institutional shares on December 8. The fund’s minimum initial investment will also be changed from $15,000 to $5,000. The fund is rated two stars by Morningstar.
Diamond Hill Small-Mid Cap Fund reopened to new investors on October 5. The fund has been closed since the close of business on April 30, 2016. The fund is rated two stars by Morningstar.
Cromwell Marketfield L/S Fund will convert its Class C shares into Investor Class shares on November 17, 2023. It’s a “win” in the same that the “A” shares charge only 2.31% for modestly sub-standard performance, rather than the “C” shares’ 3.06% for substantially sub-standard performance.
Performance since inception (note different inception for the original share class)
MFLDX was, in its prime, the 800-pound gorilla of the long/short fund universe.
RiverPark Short Term High Yield Fund reopened to new investors on October 11. The fund has been closed since June 18, 2021. The fund is rated four stars by Morningstar.
The Vulcan Small Cap Fund reopened to new investors on October 1 after being closed on November 29, 2013. The fund is rated one star by Morningstar.
OLD WINE, NEW BOTTLES
Effective on or about November 10, 2023, the AlphaCentric Strategic Income Fund becomes AlphaCentric Strategic Real Estate Income Fund.
HSBC RadiantESG U.S. Smaller Companies Fund is embracing the “green flight” movement. “In anticipation of a change in the name of the Fund’s current subadviser, the Fund’s name will change to HSBC Radiant U.S. Smaller Companies Fund” without any material change in the fund’s ESG profile or process.
iShares North American Tech-Multimedia Networking ETF has been renamed iShares U.S. Digital Infrastructure and Real Estate ETF. No indication that the addition of “Real Estate” to the name makes any difference in the portfolio.
Knowledge Leaders Developed World ETF is being reorganized into AXS Knowledge Leaders ETF. A shareholder meeting will occur on or about December 20, 2023. If the reorganization is approved by shareholders, the reorganization is expected to take effect in the fourth quarter of 2023.
Loncar China BioPharma ETF is being “reorganized” into the Range Cancer Therapeutics ETF (formerly known as the Loncar Cancer Immunotherapy ETF). The acquiring fund has zero exposure to China. That engenders one small problem: the IRS doesn’t recognize the “reorganization” as, well, a reorganization:
The Reorganization is not expected to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, it is anticipated that the Reorganization should be a taxable transaction, and that the Acquired Fund should recognize gain or loss, if any, in connection with the transfer of its assets to the Acquiring Fund, which may require the Acquired Fund to make taxable distributions to its shareholders. Further, a shareholder’s exchange of Acquired Fund shares for Acquiring Fund shares is expected to be a taxable event with the exception of shareholders who hold shares in a tax deferred account. As a result, the Board considered alternatives to the Reorganization and believes that the only viable alternative to the Reorganization is liquidating the Acquired Fund, and that the tax implications of liquidation would be substantially similar to those following the Reorganization.
Basically, the China Bio ETF is a failure (Morningstar calculates that it has turned a $10,000 investment at inception into $6116 at the end of 10/20223) and the adviser needs to either liquidate the fund (and lose the $4 million in assets) or finagle a “reorganization” that pumps $4 million into their surviving ETF which itself has only $9 million in assets.
Oberweis International Opportunities Institutional Fund is being reorganized into the Oberweis International Opportunities Fund as the institutional class of the fund is being eliminated. A shareholders’ meeting will be held on December 21 to vote on the proposal. If shareholders approve the reorganization, the merger will become effective on or about December 22.
Vert Global Sustainable Real Estate Fund will become an ETF, Vert Global Sustainable Real Estate ETF, on or about December 4, 2023.
OFF TO THE DUSTBIN OF HISTORY
Advocate Rising Rate Hedge ETF will be liquidated on or about October 31.
ASYMmetric ETFs Trust liquidated ASYMmetric Smart S&P 500 ETF, ASYMmetric Smart Alpha S&P 500 ETF, and ASYMmetric Smart Income ETF on October 18, 2023.
BlackRock Large Cap Focus Growth Fund is slated to merge into BlackRock Capital Appreciation Fund, though we don’t yet know the date.
Brown Advisory Equity Income Fund will be liquidated on or about January 15, 2024.
Cavanal Hill Opportunistic Fund “will distribute cash or in-kind pro rata to all shareholders who have not previously redeemed or exchanged all of their shares on or about December 14, 2023.” That’s a new way of phrasing the death notice.
Ecofin Global Energy Transition Fund will be liquidated on or around November 15, 2023, based on the fund’s “limited prospects for meaningful growth.”
Global X doin’ what Global X does: Global X Founder-Run Companies ETF (BOSS), Global X Emerging Markets Internet & E-Commerce ETF, Global X Education ETF, and Global X China Innovation ETF will all reach the end of the road on November 10, 2023
KL Allocation Fund is being reorganized into the AXS Astoria Inflation Sensitive ETF. A shareholder meeting will occur on or about January 12, 2024. If the reorganization is approved by shareholders, the reorganization is expected to take effect in the first quarter of 2024.
Osterweis Total Return Fund is being liquidated after the close of business on December 15. The October 16 supplement states the decision was made due to the fund’s inability to obtain a level of assets necessary for it to be viable.
The Simplify Emerging Markets Equity PLUS Downside Convexity ETF and Simplify Developed Ex-US PLUS Downside Convexity ETF face final simplification on November 3, 2023.
Touchstone Dynamic Allocation is merging into Touchstone Dynamic International ETF on or about December 4, 2023. Given that only one-quarter of the ETF’s current portfolio has been … umm, dynamically allocated to international stocks, this is likely to entail a wholesale housecleaning and something of a surprise to the fund’s current investors.
Touchstone Anti-Benchmark US Core Equity Fund is expected to be closed and liquidated on or about December 8, 2023, due to its small size and limited growth potential.
