Before fund companies are allowed to offer mutual funds to the public, they need to submit them to SEC review. The SEC has 75 days to ponder the fate of the newly-registered funds before allowing them to proceed. The registration period is also called “the quiet period” because fund companies are not allowed to talk about their funds in registration. This month’s good news is that most of the mutual funds in registration are sensible strategies from respected shops: Artisan, AQR, Brown Advisory, T. Rowe Price and others. The other part of the news is that the ETF industry continues to crank out a freakish mishmash. That includes the Quincy Jones Streaming Music, Media & Entertainment ETF, the Republican Policies Fund (GOP), the Democratic Policies Fund (DEMS) and the European Union Breakup Fund (EUXT).
Artisan Global Discovery Fund
Artisan Global Discovery Fund will seek maximum long-term capital growth. The plan is to build an all-cap global portfolio of “companies that it believes possess franchise characteristics, are benefiting from an accelerating profit cycle and are trading at a discount to its estimate of private market value.” The fund will be managed by Jason L. White, James D. Hamel, Matthew H. Kamm and Craigh A. Cepukenas. Various members of the team manage the five-star Global Opportunities, four-star Mid Cap and three-star Small Cap funds. The initial expense ratio has not yet been released. The minimum initial investment will be $1,000.
AQR Alternative Risk Premia Fund
AQR Alternative Risk Premia Fund will seek positive absolute returns. Here’s the official text describing the strategy: “The Fund pursues its investment objective by aiming to provide exposure to six separate investment styles: value, momentum, carry, defensive, trend and volatility using both long and short positions within the following asset groups: stocks, equity indices, bonds, interest rates and currencies.” The random italics are theirs.The fund will be managed by the usual AQR team. The initial expense ratio hasn’t been disclosed. The minimum initial investment will be $1,000,000 or $5,000,000, depending on share class.
Brown AdvisoryMid-Cap Growth Fund
Brown Advisory Mid-Cap Growth Fund will seek to achieve capital appreciation. The plan is to invest in US midcaps which exhibit “durable growth, sound governance, and scalable go-to-market strategies.” The fund will be managed by Christopher A. Berrier and George Sakellaris. Mr. Berrier leads Brown Advisory’s small cap growth team and co-manages their four-star Small Cap Growth Fund (BIASX). For now, only the Institutional share class is moving ahead though the prospectus clearly indicates that there will be Investor and Advisor shares as well. The initial expense ratio will be 0.71%. The minimum initial investment will be $1,000,000.
Epsilon Sector-Balanced Fund
Epsilon Sector-Balanced Fund will seek capital appreciation. The plan is to invest in large cap stocks which are favored by hedge fund managers; they’ll determine that by reading the funds’ 13F filings. They remind us that “The Fund is not a hedge fund and does not invest in hedge funds,” just in case you suspected that reading about a hedge fund made you a hedge fund. The fund will be managed by team from Epsilon Asset Management. The initial expense ratio will be 1.25%. The minimum initial investment will be $1,000.
Essex Environmental Opportunities Fund
Essex Environmental Opportunities Fund will seek long term capital appreciation. The plan is to construct a more-or-less all cap portfolio of 35-45 stocks. They’re targeting firms whose activities are positive for the global environment and which derive at least 25% of earnings from one of nine focuses: 1) Agricultural Productivity & Clean Fuels; 2) Clean Technology & Efficiency; 3) Efficient Transport; 4) Environmental Finance; 5) Power Technology; 6) Power Merchants & Generation; 7) Renewable Energy; 8) Low Carbon Commerce; and 9) Water. The fund will be managed by William H. Page and Robert J. Uek Senior Vice President and Portfolio Manager, has been a portfolio manager of the Fund since its inception in September 2017. The initial expense ratio has not yet been disclosed. The minimum initial investment will be $2,000 for Investor shares.
NWM Momentum Bond Fund
NWM Momentum Bond Fund will seek long-term capital appreciation, an exceedingly rare goal for a bond fund. The plan is to invest in fixed-income ETFs. When their model dictates a “risk-on” environment, they’ll invest in junk bonds, convertibles, EM bonds and so on. During “risk-off” environments, they’ll toggle to higher-quality fare. The fund will be managed by Timothy L. Ayles and George P. McCuen of NWM. The prospectus demurely notes, “The Adviser is a newly registered investment adviser and does not have assets under management.” The initial expense ratio will be 1.68% after waivers. The minimum initial investment will be $5,000, reduced to $1000 for tax sheltered accounts and those with automatic investing plans.
TCW Global Artificial Intelligence Equity Fund
TCW Global Artificial Intelligence Equity Fund will seek long-term capital appreciation. The plan is to invest in 25-60 funds that might “benefit from advances in the use of artificial intelligence … [typically in] information technology, consumer discretionary, industrial and health care sectors.” Frankly, I’m a bit fuzzy on what industries mightn’t claim a benefit from the evolution of our robot overlords. The minimum market cap will be $300 million. The fund will be managed by Jeffrey Linn and Thomas Lee. The initial expense ratio has not yet been disclosed. The minimum initial investment will be $2,000.
T. Rowe Price Multi-Strategy Total Return Fund
T. Rowe Price Multi-Strategy Total Return Fund will seek strong long-term risk adjusted returns. The plan is to act like a multi-alternative hedge fund, seeking positive returns in all sorts of markets by rotating through nine different alternative strategies. The fund will be managed by Richard de los Reyes and Stefan Hubrich. Both guys work with their global allocation strategy team but not, so far as I can tell, with their very fine Global Allocation Fund (RPGAX). The initial expense ratio will be 1.48%. The minimum initial investment will be $2,500.