Just a handful of new funds were registered with the SEC this month, perhaps in response to the disruption caused by the government shutdown which affected the SEC. In any case, we’ve chosen to highlight just two funds from that list; both are guided by first-rate managers whose long careers and other funds should engender considerable interest and respect.
GQG Partners Global Quality Equity Fund
GQG Partners Global Quality Equity Fund will seek long-term capital appreciation. The plan is to build a non-diversified, global growth stock portfolio. They hope to create a portfolio which will “capture market upside while limiting downside risk through a full market cycle.” In general, they favor the stock of firms which are reasonably priced, and have strong fundamental business characteristics, sustainable and durable earnings growth and the ability to outperform peers over a full market cycle and sustain the value of their securities in a market downturn. That all is reflected in the advisor’s name: GQG stands for “global quality growth.” The fund will be managed by Rajiv Jain. Mr. Jain’s reputation is such that the firm’s emerging market fund quickly drew $1 billion in assets, though its better-performing US fund has just $11 million after its first four months. Curious. He is, in any case, an exceptional investor once responsible for $50 billion in global growth stocks. The expense ratio for Investor shares is 1.00% after waivers and the minimum initial investment is $2500. Institutional shares will charge 0.75% and require $500,000 to enter.
Zeo Sustainable Credit Fund
Zeo Sustainable Credit Fund will seek “risk-adjusted total returns consisting of income and moderate capital appreciation.” In truth, I’m not quite sure what goal statements like that actually mean. They intend to own a portfolio consisting primarily of carefully selected fixed-income securities issued by companies who are leaders amongst their peers in key areas of sustainable business practices. They’ll manage interest risk rate by managing the portfolio’s duration. The “credit” of “sustainable credit” points to high-yield securities whose risk lies primarily in the creditworthiness of the issuer rather than in changing interest rates. The fund will be managed by Venkatesh Reddy, founder of Zeo Capital Advisors and manager of Zeo Short Duration Income (ZEOIX). ZEOIX is an exceptional fund that’s been badly miscategorized by Morningstar. It’s tagged as a “high yield bond” fund, which implies equity-like risks and returns. It seeks neither. Zeo is an exceptionally stable, single digits performer with a negative downside capture ratio (that is, it tends to rise even when the bond market falls) against the Barclays US Aggregrate Bond index. It is a Great Owl fund and the subject of a recent profile. The expense ratio for the new fund is 1.25% and the minimum initial investment is $5000.