July 2013, Funds in Registration

By David Snowball

AdvisorShares Treesdale Rising Rates ETF

AdvisorShares Treesdale Rising Rates ETF will invest in “mortgage-related products with interest-only cash flows while managing duration risk with liquid interest rate products. To employ the Fund’s strategy, Treesdale Partners, LLC seeks to generate enhanced returns in an environment of rising interest rates by investing principally in agency interest-only mortgage-backed securities, interest-only swaps and certain other mortgage-related derivative instruments, while maintaining a negative portfolio duration with a generally positive current yield by investing in U.S. Treasury obligations and other liquid rate instruments.” Yung Lim, Managing Partner for Treesdale, will manage the fund.  Expenses not yet set.

Ashmore Emerging Markets Frontier Equity Fund

Ashmore Emerging Markets Frontier Equity Fund will invest in “equity securities and equity-related investments of Frontier Market Issuers.”   I mention it, primarily, as an example of the rising interest in frontier-targeted funds.   The portfolio managers will be Felicia Morrow, CIO of Ashmore EMM, Peter Trofimenko, John DiTieri, Bryan D’Aguiar, and Johan de Bruijn.  $1000 minimum.  Expenses not yet set.  Based on other Ashmore listings at Scottrade, this will be sold only to RIAs.

American Beacon Earnest Partners Emerging Markets Equity Fund

American Beacon Earnest Partners Emerging Markets Equity Fund will seek long-term growth by investing in the stock (common, preferred or convertible) of companies “economically tied to” the emerging markets.   The subadviser appears to use a fundamental approach with special sensitivity to limiting the downside.  Paul E. Viera of EARNEST Partners will manage the fund.  EARNEST describes itself as a fundamental, bottom-up bunch with $20 billion in AUM.  They sub-advise three other funds, though none of them is an e.m. fund and the prospectus does not cite a separate accounts record.  The minimum initial investment in its no-load Investor shares is $2500 and the expense ratio is 1.74%.

AT Disciplined Equity Fund

AT Disciplined Equity Fund seek long-term capital appreciation and, secondarily, current income. This is actually a repackaged  Invesco Disciplined Equity Fund  (AWEIX) and itself was a repackaged Atlantic Whitehall Equity Income Fund.  The adviser will be Stein Roe, a storied name in the no-load world. Patricia Bannan of Atlantic Trust (the “AT” in the name) has been managing the Invesco fund since 2010.  Brant Houston became a co-manager in 2013.  After conversion, the expenses rise from 0.78% to 1.19% and the minimum investment rises from $1000 to $3000.

Barrow SQV Hedged All Cap Fund

Barrow SQV Hedged All Cap Fund seeks to generate above-average returns through capital appreciation, while also attempting to reduce volatility and preserve capital during market downturns.  The long portfolio mirrors the construction of their Long All Cap Funds (see below).  The Hedged All Cap Fund’s short portfolio will generally be composed of: a) 150-250 companies identified as low quality and overpriced with the Adviser’s SQV ranking process; and b) 1,000-1,100 companies (assuming a “look through” to the underlying constituent companies of exchange traded funds) that represent the Adviser’s custom market index benchmark.  The short portfolio is balanced across the same market capitalization segments and sectors as the long portfolio.  The Adviser intends no individual short position to be greater than 1.5% of the portfolio, as measured at the time of purchase. Nicholas Chermayeff and Robert F. Greenhill, Jr.  of Barrow Street Advisors LLC, will manage the mutual fund.  Before founding Barrow Street, both guys with “acquisition professionals” (no, I have no clue and it sounds vaguely like a mob euphemism) for Morgan Stanley and Goldman Sachs, respectively.   They have been investing money in long/short separate accounts since 2009.  Their accounts outperform the average long/short hedge fund by about 100 bps year.  The three-year record, for example, is 5.0% for them and 3.8% for hedged equity.  Expenses and minimums not yet set, though they do plan to award themselves a rich 1.50% as their management fee.

Barrow SQV Long All Cap Fund

Barrow SQV Long All Cap Fund seeks to generate long-term capital appreciation.  This is another former hedge fund (formerly Barrow Street Fund LP, which opened in 2009).  They use their proprietary Systematic Quality Value (“SQV”) strategy to create “diversified sub-portfolios” of high quality stocks.  It looks like each sub-portfolio will be a basket of stocks that will be traded as a group; they’re hopeful of holding each basket at least a year.  Nicholas Chermayeff and Robert F. Greenhill, Jr.  of Barrow Street Advisors LLC, the managers of the hedge fund, will manage the mutual fund.  No word yet on the hedge fund’s performance. Expenses and minimums not yet set, though the management fee is .99% and there’s a 12(b)1 fee of .25%.

Coho Relative Value Equity Fund

Coho Relative Value Equity Fund will seek total return by investing in 20 to 35 mid- to large cap stocks that meet their stability, dividend and cash flow growth criteria.  They anticipate dividends about 600 bps about the 5-10 year Treasury average. They describe their approach as “conservative, bottom-up and fundamental.”  The fund will be managed by Brian Kramp and Peter Thompson, both of Coho Partners, Ltd.  The minimum initial investment is $2000, reduced to $500 for an IRA.   The expense ratio, after waivers, is an entirely-reasonable 1.30% with a 2% redemption fee for shares held under 60 days.

Gotham Neutral Fund

Gotham Neutral Fund will be about what you expect: a long/short equity fund that’s pretty much market neutral.  They anticipate a net market exposure of 0-25%.  One of the other Gotham funds has had a promising start and one of the managers wrote the wildly popular The Little Book that Beats the Market (2006).   Joel Greenblatt and Robert Goldstein will co-manage the fund.  They also co-manage two other Gotham funds and the Formula Investing funds, whose record of performance excellence is … uhh, mixed.  Expenses, after waivers, will be 3.77% and the minimum investment will be $250,000.

Hilton Yield Plus Fund

Hilton Yield Plus Fund seeks total return consistent with the preservation of capital by investing in bonds and high-dividend equities.  The portfolio might contain REITs, MLPs and ETNs.  The managers start by making a macro-level assessment and then allocates to whatever’s going to work.  They also might engage in opportunistic trading in the fixed-income market.   Up to 30% of the portfolio might be in high yield debt.  William J. Garvey,  Craig O’Neill and Alexander D. Oxenham , all senior folks at Hilton Capital Management, will  be the managers.  The expense ratio is 1.6% for retail shares, 1.25% for institutional. The minimum initial investments will be $2500 for retail and $250,000 for institutional.

Probabilities Fund

Probabilities Fund seeks capital appreciation. The adviser uses an active trading strategy based on a proprietary rules-based trend-following methodology to determine the Fund’s allocation among Index ETFs, leveraged ETFs, and cash.  It’s a market-timing operation: usually invest in ETFs, use leveraged ETFs if you expect a market run-up and go to cash if you anticipate a sharp decline. Joseph B. Childrey, founder and chief investment officer of the adviser, is the portfolio manager and ran this thing as a hedge fund from 2008 to the present.  They haven’t yet disclosed how the hedge fund did.  $1000 minimum.  Expenses not yet set.

RiverPark Strategic Income Fund

RiverPark Strategic Income Fund seeks high current income and capital appreciation consistent with the preservation of capital.  The manager has substantial freedom to invest across the income-producing universe: foreign and domestic, short- to long-term, investment and non-investment grade debt, preferred stock, convertible bonds, bank loans, high yield bonds and income producing equities.  The manager intends to pursue an intentionally conservative strategy by investing only in those bonds that he deems “Money Good” and stocks whose dividends are secure.  Up to 35% of the portfolio might be in foreign fixed-income and 35% in income-producing equities.  He also can hedge the portfolio.    The manager’s intention is to hold securities until maturity.  David Sherman of Cohanzick Management, who also manages the splendid but closed RiverPark Short Term High Yield fund, will be the manager.  The expense ratio is 1.25% for retail shares, 1.00% for institutional. The minimum initial investments will be $1000 for retail and $1M for institutional.

The Texas Fund

The Texas Fund.   Buys the stock of Texas companies.   Ahl bidness, mostly.  Ever’thing is BIG in Texas, including the minimums and expenses.  It joins the likes of the Virginia Equity Fund (see below), the Arkansas Equity Growth Fund, the Atlanta Growth Fund, the Blue State Fund and the Home State Pennsylvania Growth Fund (ooops – deadsters).  They could aspire to Mairs & Power (MPGFX) but I’m not sure that folks in Texas are allowed to emulate Minnesotans.

Virginia Equity Fund

Virginia Equity Fund buys stocks of firms that have “a significant impact” on, or are located in, Virginia.  “Significant impact on.”  Uhhh … wouldn’t that be, say, Google, Microsoft and Exxon?  It’s managed by J.C. Schweingrouber of Virginia Financial Innovations. 4.25% load, 1.95% expense ratio, $2500 investment minimum.

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About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles. David lives in Davenport, Iowa, and spends an amazing amount of time ferrying his son, Will, to baseball tryouts, baseball lessons, baseball practices, baseball games … and social gatherings with young ladies who seem unnervingly interested in him.