Fund advisers are required to file prospectuses for proposed funds with the SEC; the SEC has 75 days to review the filing. If the SEC doesn’t object, then the adviser is free to launch – or to not launch, which is more common than you think – the proposed fund. Funds placed in registration in December will “go live” in February or March 2018. This month’s filings include three actively-managed ETFs, two conversions of existing funds and one mystery: how Thrivent can offer a no-load / no minimum fund for 7 basis points in expenses.
Amplify YieldShares High Yield ETF
Amplify YieldShares High Yield ETF, an actively managed ETF, will seek high current income with a secondary goal of capital appreciation. The plan is to assemble a portfolio primarily comprised of high-yield debt, with some room for high-dividend equities. The adviser claims a “deep value contrarian approach to the credit markets, focusing on absolute value.” The fund will be managed by Peritus Asset Management, LLC. This fund is a reorganization of an unnamed “predecessor fund,” presumably Peritus High Yield ETF (HYLD) with a spectacularly bad track record. The initial expense ratio is 1.25% and there is no minimum initial investment requirement.
BTS Managed Income Fund
BTS Managed Income Fund will seek total return. The plan is to pursue two strategies: an unconstrained fixed-income strategy and a risk management strategy that actively trades in order to hedge the first strategy. In general, the fixed income strategy will occupy 60-70% of the portfolio. The fund will be managed by Vilis Pasts, Matthew Pasts, and Isaac Braley. The initial expense ratio has not been disclosed and the minimum initial investment will be.
Davis Select International ETF (DINT)
Davis Select International ETF (DINT), an actively managed ETF, will seek long-term capital growth . The plan is to create an all-cap global equity portfolio. Notwithstanding the word “international” in the name, the fund is required to hold only 30% non-U.S., including U.S. firms with substantial international exposure. The fund will be managed by Danton Goei of Davis Selected Advisers. The initial expense ratio is 0.75% and there is, of course, no minimum initial investment requirement. The launch is set for March 2018.
LHA Market State Tactical U.S. Equity ETF
LHA Market State Tactical U.S. Equity ETF, an actively-managed ETF, will seek to beat the US stock market on a risk-adjusted basis. The plan is to use ETFs and futures contracts to achieve a market exposure of between 0-160% of the portfolio. The fund will be managed by Jeffrey C. Landle of Little Harbor Advisors. The initial expense ratio has not been disclosed and there is no minimum initial investment requirement.
Miller/Howard Infrastructure Fund
Miller/Howard Infrastructure Fund will seek current income and long-term capital appreciation. The plan is to invest in a portfolio of exchange listed infrastructure companies including water, gas, and electric utilities, waste, communication and telecom, internet, energy infrastructure, transportation and logistics, and renewable energy. No word about size or geographic location. There is, however, an ESG screen. The fund will be managed by a team led by Lowell G. Miller, Miller-Howard’s CIO. The initial expense ratio will be 1.20% and the minimum initial investment will be $2,500.
Northpointe Small Cap Opportunities Fund
Northpointe Small Cap Opportunities Fund will seek long-term capital appreciation. The plan is to invest in domestic small cap value stocks. The fund will be managed by Jeffrey C. Petherick, CFA, and Mary C. Champagne. This is a conversion of an unnamed predecessor fund and an unspecified record; the previous record in the prospectus is [xx%]. I’m guessing it’s their tiny, under-performing NorthPointe Small Cap Value (NPSVX) fund. The initial expense ratio will be 1.10% and the minimum initial investment will be.
Old Westbury All Cap ESG Fund
Old Westbury All Cap ESG Fund will seek long-term capital appreciation. The plan is pretty vague: “the Adviser’s investment process combines ESG scores, as provided by a third party vendor, with a proprietary quantitative process that measures equity securities’ attractiveness.” The fund will be managed by Dr. Qiang Jiang, Y. Gregory Sivin, and Anna E. White. The initial expense ratio has not been disclosed and the minimum initial investment will be $1,000.
Thrivent Core Low Volatility Equity Fund
Thrivent Core Low Volatility Equity Fund will seek long-term capital appreciation with lower volatility relative to the domestic equity market. The plan is to use quant models to buy low volatility stocks. The fund will be managed by Noah J. Monsen, CFA and Brian W. Bomgren, CQF.. Okay, here are the two elements of the filing that I simply don’t understand. The initial expense ratio is 0.07% and there is no minimum initial investment. I’ve got to call these folks. I’ll update you next month if they’re willing to talk.
