October 2017 IssueLong scroll reading

Funds in registration

By David Snowball

It’s been a quiet month in the land of new fund registrations. There are ten new (mostly) no-load retail funds in the pipeline, as well as a half dozen loaded funds (which I’m mostly ignoring) and a slew of ETFs. The most intriguing development is the question, who’s offering the most pointless ETF? Candidates are the ProShares Decline of Bricks and Mortar Retail ETF which will surely compete with the ProShares Long Clicks/Short Bricks Retail ETF while the USCF Contango-Killer Natural Gas Fund (No K-1) takes on USCF Contango-Killer Oil Fund (No K-1).

AAM/HIMCO Global Enhanced Dividend Fund

AAM/HIMCO Global Enhanced Dividend Fund will seek a high level of current income and, just maybe, some capital appreciation. The plan is to invest long and short positions in domestic and foreign equity securities. They’ll be long dividend-payers and short stocks “with below average dividends and less attractive returns.” They’ll also leverage up the portfolio so that they’re 140% long and 40% short. The fund will be managed by a small team from Hartford Investment Management Company. The initial expense ratio has not been released, and the minimum initial investment is $2,500. “A” shares have a 5.5% sales load. The no-load “I” shares have a $25,000 minimum initial investment.

AT Equity Income Fund

AT Equity Income Fund will seek current income, and, secondarily, modest capital appreciation. The plan is to invest mostly in US income-producing equities, common and preferred stocks, REITs, MLPs and convertible securities, with up to 30% international and up to 25% emerging markets. They advertise a bottom-up, fundamental approach to finding quality growth companies. This represents the conversion of an earlier fund, apparently institutional, into a retail platform. The fund will be managed by Robert C. Bridges and John Huber, who’ve co-managed the predecessor fund since its launch in 2010, and Gordon C. Scott who joined more recently. The initial expense ratio will be 1.45%, and the minimum initial investment is $3000.

AT All Cap Growth

AT All Cap Growth will seek long-term capital appreciation. The plan is to invest mostly in US stocks, with up to 30% international and up to 25% emerging markets. They advertise a bottom-up, fundamental approach to finding quality growth companies. This represents the conversion of an earlier fund, apparently institutional, into a retail platform. The fund will be managed by Robert C. Bridges and John Huber, who’ve co-managed the predecessor fund since its launch in 2007. The initial expense ratio will be 1.45%, and the minimum initial investment is $3000.

Brandes Small Cap Value Fund

Brandes Small Cap Value Fund will seek long term capital appreciation. The plan is to invest, mostly, in US small cap stocks. Up to 10% of the portfolio might be invested in fixed income securities and 10% in foreign stocks. This fund represents the conversion of a “private investment fund” which has a (mixed) 15 year record. The fund will be managed by the same team that ran its predecessor, Ralph Birchmeier, Luiz Sauerbronn, Yingbin Chen, and Mark Costa. The initial expense ratio is 1.15% and the minimum investment is $2,500. There’s a 5.75% sales charge on “A” shares.

Elevation U.S. Small Cap Value Fund

Elevation U.S. Small Cap Value Fund will seek long-term capital appreciation. The plan is to “employ a multi-factor investment strategy to invest in a broad and well diversified basket” of US small cap value stocks. The fund will be managed by Dr. Vito Sciaraffia. The manager has a PhD from Cal-Berkeley and has had three short faculty stints, which sort of explains his claim to employ “a set of academically-driven factors.” We’ll set aside, for the nonce, the fact that “academically-driven” is a nonsense phrase. The initial expense ratio will be 0.92%, and the minimum initial investment is $10,000.

Elevation U.S. Large Cap Value Fund

Elevation U.S. Large Cap Value Fund will seek long-term capital appreciation. The plan is to “employ a multi-factor investment strategy to invest in a broad and well diversified basket” of US large cap value stocks. The fund will be managed by Dr. Vito Sciaraffia. The manager has a PhD from Cal-Berkeley and has had three short faculty stints, which sort of explains his claim to employ “a set of academically-driven factors.” We’ll set aside, for the nonce, the fact that “academically-driven” is a nonsense phrase. The initial expense ratio will be 0.75%, and the minimum initial investment is $10,000.

Elevation U.S. Large Cap Growth Fund

Elevation U.S. Large Cap Growth Fund will seek long-term capital appreciation. The plan is to “employ a multi-factor investment strategy to invest in a broad and well diversified basket” of US large cap growth stocks. The fund will be managed by Dr. Vito Sciaraffia. The manager has a PhD from Cal-Berkeley and has had three short faculty stints, which sort of explains his claim to employ “a set of academically-driven factors.” We’ll set aside, for the nonce, the fact that “academically-driven” is a nonsense phrase. The initial expense ratio will be 0.75%, and the minimum initial investment is $10,000.

Orange Structured Credit Value Fund

Orange Structured Credit Value Fund will seek a high level of risk-adjusted current income and capital appreciation while preserving capital. The plan is to invest in structured credit securities including non-agency residential mortgage-backed securities (RMBS), agency mortgage-backed securities (MBS), commercial mortgage-backed securities (CMBS), asset-backed securities (ABS), collateralized mortgage obligation securities (CMO) and collateralized loan obligations (CLO). They may occasionally short such securities. The fund will be managed by Jay Menozzi and Boris Peresechensky of Orange Investment Advisers. Neither the initial expense ratio nor the minimum initial investment has been disclosed yet.

Powell Alternative Income Strategies Fund

Powell Alternative Income Strategies Fund will seek to generate income and capital appreciation with lower volatility as compared to the S&P 500 Index.. The plan is to combine esoteric strategies (dividends plus puts, long/short pair trades, hedged global dividends and “additional and new strategies from time to time”). The fund will be managed by David D. Wrench of Powell Capital LLC. He spent five years at Russell Investments, including a stint as Global Director of Asset Allocation and Model Strategies. The initial expense ratio will be 2.25%, and the minimum initial investment is not yet disclosed.

VanEck Vectors Real Asset Allocation ETF

VanEck Vectors Real Asset Allocation ETF will seek long-term total return. In pursuing long-term total return, the Fund seeks to maximize “real returns” in inflationary environments while seeking to reduce downside risk during sustained market declines. The plan is to invest in real asset ETFs and cash. The fund will be managed by David Schassler and Barak Laks of VanEck Absolute Return Advisers. The initial expense ratio has not been disclosed.

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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.