Before funds can be offered to the public, they’ve got to be submitted to the SEC which has 70 days to review the application. In general, advisers try to launch just before years end because that allows them to have clean “year to date” and calendar year results to share. That means that funds hopeful of launching by December 30th needed to be filed by October 15th. Since few firms are interested in launching funds in late January or early February, this month’s filings are not-surprisingly thin. On face, the most promising is likely an actively-managed ETF from a team with a strong track record in funds: Virtus Seix Senior Loan ETF.
AB Multi-Manager Select 2060 Fund
AB Multi-Manager Select 2060 Fund will seek highest total return over time consistent with its asset mix. It’s a long-dated fund-of-funds which will be managed by Morningstar Investment Management. The same team runs all of the AB target date funds which are, on whole, very strong performers. Its opening expense ratio will likely be 0.66% or 0.83%, depending on which share class you access, and the minimum initial investment will be $2,500.
ARK Fintech Innovation ETF
ARK Fintech Innovation ETF (ARKF), an actively-managed ETF, seeks long-term growth of capital. The plan is to build an all-cap portfolio of fintech innovation companies. Here’s the universe: firms “focused on and expected to benefit from the shifting of the financial sector and economic transactions to technology infrastructure platforms, and technological intermediaries. FinTech Innovation Companies may also develop, use or rely on innovative payment platforms and methodologies, point of sale providers, transactional innovations, business analytics, fraud reduction, frictionless funding platforms, peer-to-peer lending, blockchain technologies, intermediary exchanges, asset allocation technology, mobile payments, and risk pricing and pooling aggregators.” The fund will be managed by Catherine D. Wood of ARK Investment Management. Its opening expense ratio is 0.75%.
Collective Wisdom Fund
Collective Wisdom Fund will seek long term growth of capital. The plan is to buy 40-100 common stocks “based primarily on patterns found in the Vestly data, coupled with more conventional quantitative and fundamental data analytic models utilized for risk management purposes.” Vestly is “a fun and free stock trading game where you compete for over $200000 in cash and prizes.” Here’s the celebration from one Vestly investor:
Two other funds that began with a similar premise, StockJungle Community Intelligence Fund and Marketocracy Masters 100 Fund, were both highlighted in Morningstar’s 2009 article, “Dumb and Dumber: The Worst Fund Launches of the 2000s.” The fund will be managed by Ronald S. Rosenberg and Michael Suen on Intelligration, LLC. My guess is that the managers would point out that they have much more sophisticated data analytics than did their extinct predecessors. Its opening expense ratio is 1.20%, and the minimum initial investment has not yet been disclosed.
Gotham ESG Large Value Fund
Gotham ESG Large Value Fund will seek long-term capital appreciation. The plan is to employ “a systematic, bottom-up, valuation approach based on the Adviser’s proprietary analytical framework to identify those companies meeting the ESG criteria that appear to be undervalued on both an absolute and relative basis.” The fund will be managed by Joel Greenblatt and Robert Goldstein. Gotham has been aggressively expanding its footprint: it has just three funds with a five year record, seven funds with a three year record but 20 funds with a one-year record. This will be fund #22 for them. It’s hard to speculate about how much faith to have in Mr. Greenblatt’s system: the five-year records are mediocre, the one-year records are splendid, so …. ? Its opening expense ratio is 0.75%, and the minimum initial investment will be $100,000. Retail access is possible through some of the fund supermarkets, but shares are generally tough to get without paying an additional layer of fees.
Navigator Ultra Short Bond Fund
Navigator Ultra Short Bond Fund will seek current income consistent with the preservation of capital. The plan is to invest, primarily, various types of short duration, investment grade debt. The average duration will be under one year. The managers might also purchase or write credit default swaps and credit default swap indexes. The fund will be managed by Jonathan Fiebach and Robert S. Bennett, Jr., both of Clark Capital Management Group. Its opening expense ratio is 0.75% with a nominal front load of 3.75%, and the minimum initial investment will be $5,000.
Pear Tree PNC International Small Cap Fund
Pear Tree PNC International Small Cap Fund will seek long-term capital appreciation. The plan is to use uses “proprietary quantitative investment technology, combined with traditional, value-based, fundamental research, to identify potential investments” There’s a top-down industry- and country-selection element to the process, plus the prospect of using options. The fund will be managed by Martin C. Schulz and Calvin Y. Zhang of PNC Capital Advisers. Messrs. Schulz and Zhang also manage a portion of the portfolio for the four-star PNC International Equity Fund (PMIEX).Its opening expense ratio is 1.82%, and the minimum initial investment for Ordinary Shares (raising the prospect this might be an Ordinary Fund) will be $2,500. We quickly scanned the expense ratios of other international small cap blend funds. There is only, other than for the archaic “C” shares on a dozen funds, only one fund with a higher expense ratio.
Virtus Seix Senior Loan ETF
Virtus Seix Senior Loan ETF (SEIX), an actively-managed ETF, seeks to provide a high level of current income. The plan is to invest in a combination of first- and second-lien senior floating rate loans. They can also pick up some junior loans, junk bonds and asset-backed securities. The fund will be managed by George Goudelias and Vincent Flanagan of Seix Investment Advisors. The team also runs the four-star Virtus Seix Floating Rate High Income Fund (SAMBX). Its opening expense ratio has not been disclosed.