Relatively few funds enter registration in November or December. Advisers really want to go live by December 30th, so that they will be able to show full-year results for 2018. As a result, lots of funds go into registration in October so that they can emerge from the SEC’s “quiet period” by the end of December. As a result, this month’s filings are limited to a handful of institutional funds that might offer retail shares, and a pack of high-visibility active ETFs from Vanguard.
Horizons Cadence Hedged US Dividend Yield ETF
Horizons Cadence Hedged US Dividend Yield ETF, an actively-managed ETF, seeks income and long-term growth of capital. The plan is to invest in 250-300 high quality companies with strong balance sheets, predictable earnings and cash flow growth, and a history of dividend growth. (That statement alone implies that the managers are cock-eyed optimists.) The managers have the ability to employ an options overlay as a risk management tool; that’s the “hedged” part. The fund will be managed by a team from Cadence Capital Management led by Michael J. Skillman, their Chief Executive Officer. The expense ratio has not been announced.
Marmont Redwood International Equity Fund
Marmont Redwood International Equity Fund will pursue will pursue long-term capital gains. The plan is to find good companies (stable operating histories, strong financials, competitive advantages, and proven management teams) whose stocks reflect “strong positive momentum, recent positive earnings revisions, and attractive valuations.” The fund will be managed by a team from Redwood Investments, led by CIO Michael Mufson. They intent to launch the institutional share class immediately, with the prospect of opening a retail class afterward. The expense ratio will be 1.25% on the retail shares and 1.0% on the institutional shares. The minimum initial investments are $3,000 and $100,000, respectively.
Marmont Redwood Emerging Markets Fund
Marmont Redwood Emerging Markets Fund will pursue will pursue long-term capital gains. The plan is to find good frontier and emerging market companies (stable operating histories, strong financials, competitive advantages, and proven management teams) whose stocks reflect “strong positive momentum, recent positive earnings revisions, and attractive valuations.” The fund will be managed by a team from Redwood Investments, led by CIO Michael Mufson. They intent to launch the institutional share class immediately, with the prospect of opening a retail class afterward. The expense ratio will be 1.50% on the retail shares and 1.25% on the institutional shares. The minimum initial investments for retail and institutional are $3,000 and $100,000, respectively.
Motley Fool 100 Index ETF
Motley Fool 100 Index ETF will try to match the Motley Fool 100 Index. The aforementioned index, launched just this year, is comprised to “the 100 largest, most liquid U.S. companies that have been recommended by The Motley Fool’s analysts and newsletters.” Woo-hoo! The fund will be managed by Bryan Hinmon and Anthony Arsta. The expense ratio has not yet been announced.
Vanguard U.S. Multifactor Fund
Vanguard U.S. Multifactor Fund will pursue long-term capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals. It will be driven by quant models. The fund will be managed by Antonio Picca and Liqian Ren. The expense ratio will be 0.18%, and the minimum initial investment is for Admiral shares is $50,000.
Vanguard Active Quant ETFs
Vanguard is launching a much-ballyhooed suite of active ETFs. All of them are run by the same two guys, Antonio Picca and Liqian Ren, all of them are computer-driven and all but one (noted below) have the same low 0.13% expense ratio. Both managers have earned an M.B.A. and a Ph.D. from the University of Chicago. Mr. Picca joined Vanguard in 2017, Ms. Ren in 2007.
Vanguard U.S. Liquidity Factor ETF will pursue long-term capital appreciation by investing in an all-cap portfolio stocks with lower measures of trading liquidity.
Vanguard U.S. Minimum Volatility ETF will pursue long-term capital appreciation with relatively low volatility
Vanguard U.S. Momentum Factor ETF aims for long-term capital appreciation by investing in stocks with strong recent performance.
Vanguard U.S. Multifactor ETF is after long-term capital appreciation by investing in stocks with relatively strong recent performance, strong fundamentals, and low prices relative to fundamentals. The more-complex mission means the e.r. jumps to 0.18%.
Vanguard U.S. Quality Factor ETF will try to provide long-term capital appreciation by investing in stocks with strong fundamentals.
Vanguard U.S. Value Factor ETF will seek long-term capital appreciation by investing in stocks with relatively lower share prices relative to fundamental values.
