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. These launches will likely occur in late February or March.
Many prospectuses were still incomplete but a couple stand out for offering services from well-respected advisors: Diamond Hill, which has a bunch of strong domestic equity funds, offers its first all-international portfolio; Acadian Asset Management, which has a good record in managed volatility investing, will manage Harbor Overseas; Navellier & Associates, a storied quant investment house, brings a five-star separate account strategy to the ’40 Act world under the Method brand; and Rimrock Capital, a hedge fund house, offers up a global unconstrained bond fund. They’re worth watching.
When I opened a filing from Gabelli, I was suddenly transported back to 1999 with Auld Lang Syne playing like a dirge in the background. The Gabelli Innovations Trust wanted to share word with you of the Gabelli Media Mogul, Pet Parents’TM, Food of All Nations and RBI (roads, bridges, and infrastructure) funds. Gimmicky niche funds that seem more at home in the world of the Westcott Nothing But Net fund, the Golf Fund, the Chicken Little Growth fund, the StockCar Stocks Index fund or even … Gabelli Global Interactive Couch Potato Fund (GICPX, 1994-2000).
BlackRock U.S. Equity Factor Rotation ETF
BlackRock U.S. Equity Factor Rotation ETF, an actively-managed ETF, will seek to outperform the U.S. stock market by providing diversified and tactical exposure to style factors via a factor rotation model. The plan is to categorize US mid- and large-cap stocks by the investing factors (momentum, quality, value, size and minimum volatility) that they embody, then to invest the portfolio in the constellation of factors that’s most attractive in any given market. Each stock might exhibit more than one of the five factors. The fund will be managed by Ked Hogan, Phil Hodges and Michael Gates of BlackRock. Its opening expense ratio has not been disclosed.
Castle Tandem Fund
Castle Tandem Fund will seek long-term capital appreciation. The plan is to invest primarily in a focused domestic, large cap portfolio using a quant discipline. The fund will be managed by John Carew, Billy Little, and Ben Carew of Tandem Investment Advisers. Its opening expense ratio is 1.18%, and the minimum initial investment will be $10,000.
Diamond Hill International Fund
Diamond Hill International Fund will seek long-term capital appreciation. The plan is to invest in a portfolio of undervalued international equities, with up to 30% of those coming from the emerging markets. The fund will be managed by an as-yet unnamed representative of Diamond Hill. The initial expense ratio has not been disclosed and the minimum initial purchase will be $2,500.
Harbor Overseas Fund
Harbor Overseas Fund will seek long-term growth of capital. The plan is to use a quant strategy to invest, primarily, in developed overseas markets. The fund will be managed by Brendan O. Bradley, Ryan D. Taliaferro, and Harry Gakidis, all of Acadian Asset Management LLC. The guys have a fair amount of experience, and a decent track record, in global and EM managed volatility investing, which may inform their approach here. The opening expense ratio will be 1.22%, and the minimum initial investment is $2,500.
Hartford Schroders Securitized Income Fund
Hartford Schroders Securitized Income Fund will seek current income and long-term total return consistent with preservation of capital. The plan is to invest in U.S and foreign fixed and floating rate securitized credit instruments, mostly of the mortgage-backed variety. The fund will be managed by Michelle Russell-Dowe and Anthony Breaks, both of Hartford Funds. Its opening expense ratio has not been disclosed, and the minimum initial investment for “A” shares will be $2,000.
iShares Commodity Multi-Strategy ETF
iShares Commodity Multi-Strategy ETF, an actively-managed ETF, seeks “to provide exposure, on a total return basis, to a group of commodities with characteristics of carry, momentum, and value.” That’s a curious investment objective; such statements typically focus on the investment outcome (“high current income”) rather than the contents of the portfolio. The plan is to invest “in a broad range of derivative instruments, including total return swaps that provide exposure to commodities futures contracts referenced by the _____________ (the ‘___________ Benchmark’). The Fund intends to follow a multifactor strategy reflected by the ___________ Benchmark, which equally weights three sub-indices designed to provide exposure to carry, momentum, and value factors. The ‘carry’ sub-index emphasizes commodities and contract months with the greatest degree of backwardation or lowest degree of contango.” Couldn’t have said it better myself. My general recommendation: if you have no idea of what they just said, stay away. The fund will be managed by Alan Mason and Richard Mejzak of BlackRock Fund Advisors. Its opening expense ratio has not been released.
Method Smart Beta Global Allocation Plus Fund
Method Smart Beta Global Allocation Plus Fund seeks long-term capital appreciation and preservation. The Fund’s sub-advisor, Navellier & Associates, has a market timing system that measures “pivot points in the market.” When the system flashes “risk on,” the adviser buys ETFs representing 2-6 S&P sectors. “Risk-off” triggers a move to investment grade fixed-income, by default Treasuries. Normally, 40% of the portfolio will be in non-US securities.The fund will be managed by Michael Garaventa and Peter Koelewyn of Navellier & Associates. Navellier appears to run the same strategy in a separate account format, for which it received five-stars from Morningstar in 2018. The opening expense ratio hasn’t been released, and the minimum initial investment will be $1,000.
North Capital Emerging Technology Fund
North Capital Emerging Technology Fund will seek long-term capital appreciation. The plan is to invest in companies involved in developing or deploying blockchain technology, artificial intelligence, machine learning, virtual computing and intelligent devices. The fund will be managed by James P. Dowd and Michael T. Weaver of North Capital. Neither its opening expense ratio nor the minimum initial investment has been disclosed.
OTG Latin America Fund
OTG Latin America Fund will seek long-term capital appreciation. The plan is to invest in Latin American stocks plus inverse or leveraged ETFs “short-term market timing or hedging.” The fund will be managed by Mauricio Alvarez of Strategic Asset Management, Ltd., a Cayman Islands corporation. Its opening expense ratio is 1.95%, and the minimum initial investment will be $1,000. The “OTG” in the name is short for “on the ground.”
Rimrock Bond Fund
Rimrock Bond Fund seeks to maximize long-term total return. The plan is to … uh, buy bonds. Undervalued bonds, to be sure. Mostly investment grade, mostly dollar-denominated with the option of investing 25% in short positions. The fund will be managed by Jesse Brettingen, Julian Maldanado, Ryan Rattet, and Erik Wayda, all of Rimrock Capital Management, a fixed-income hedge adviser with $4 billion under management. Its opening expense ratio is 0.65%, and the minimum initial investment will be $5,000.
RYZZ Managed Futures Strategy Plus ETF
RYZZ Managed Futures Strategy Plus ETF, an actively-managed ETF, seeks positive absolute returns. The plan is to use a momentum-based futures trading strategy across a global array of asset classes. I wish them well, but this strategy has seen more fund liquidations than virtually any other. The fund will be managed by Christopher A. Stanton. Its opening expense ratio has not been released.
Selective Premium Income Fund
Selective Premium Income Fund (SLCPX) will seek to generate income while protecting capital. The plan is to invest in fixed income securities, preferred stock, convertible securities and dividend-paying stock, as well as using in covered call options. The adviser, Selective Wealth Management, uses “the Selective Process” to identify “Selective Companies” in which to invest. The fund will be managed by Christopher J. Devlin. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000 for taxable accounts, reduced to $5,500 for tax-advantaged ones.
Thornburg Summit Fund
Thornburg Summit Fund “seeks to grow real wealth over time.” Somehow I’m surprised that the SEC even allowed that language, but they’ve been getting … uh, more permissive in recent years. The plan is to invest, mostly long but also significantly short, in a variety of asset classes. The fund will be managed by Ben Kirby and Jeff Klingelhofer. Its opening expense ratio is 1.37%, and the minimum initial investment will be $5,000.
WisdomTree Mortgage Plus Bond Fund
WisdomTree Mortgage Plus Bond Fund, an actively-managed ETF, seeks income and capital appreciation. The plan is to combine both macro and fundamental research to select mortgage-related debt and other securitized debt. The fund will be managed by a sub-adviser which has not yet been named. Similarly, its opening expense ratio has not been released.