June 2019 IssueLong scroll reading

Funds in Registration

By David Snowball

Before funds and ETFs 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 year’s end because that allows them to have clean “year to date” and calendar year results to share. In general, launching new funds in July and August is a dumb idea. Investment returns in summer are, in general, miserable and you lose the advantage of being able to report a full calendar quarter.

Happily, not many fall victim to that trap. Well, these guys did but not many others.

Aberdeen Standard AI Driven US Equity ETF

Aberdeen Standard AI Driven US Equity ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in US stocks. Who will be doing the investing, you ask? Our robot overlord … uh, overmanager? … I say. The portfolio will be constructed by “a proprietary, quantitative and artificial intelligence driven model [that] utilizes machine learning to analyze constantly evolving financial markets data and to identify and recall patterns in markets. Based on those patterns, the Model dynamically allocates to exposure combinations value, quality, momentum, small size and low volatility.”  According to the prospectus, the fund will be managed by “employee [   ] and [   ].” Its opening expense ratio has not been disclosed.

Aberdeen Standard AI Driven Emerging Markets Equity ETF

Aberdeen Standard AI Driven Emerging Markets Equity ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to do the same thing to the emerging markets that its sibling will do to the US market: a constantly evolving computer program will select varying exposures to five different investing factors: value, quality, momentum, size and volatility. Neither the manager(s) nor the expense ratio has been disclosed.

First Trust EIP Carbon Impact ETF

First Trust EIP Carbon Impact ETF, an actively-managed ETF, seeks a competitive risk-adjusted total return balanced between dividends and capital appreciation. The plan is to invest in utility and/or energy companies who are seeking to reduce the carbon impact of the production, transportation, conversion or storage of energy. That includes companies trying to reduce emissions of carbon and other greenhouse gases or companies that aid the broader decarbonization of the economy through renewables or smart transmission technology. The fund will be managed by a team from Energy Income Partners, LLC. Its opening expense ratio has not been disclosed.

First Trust Multi-Manager Small Cap Core ETF

First Trust Multi-Manager Small Cap Core ETF, an actively-managed ETF, will seek long-term capital appreciation. The plan is to assign part of the portfolio to an as-yet unnamed growth manager and part of the portfolio to an as-yet unnamed value manager and let them have at it. Its opening expense ratio has not been disclosed.

IQ Ultra Short Duration ETF

IQ Ultra Short Duration ETF, an actively-managed ETF, seeks current income while maintaining limited price volatility. The plan is to maintain a BBB- or higher quality portfolio with a duration of a year or less; up to 20% of the portfolio can be invested in options and futures as an interest rate hedge. The fund will be managed by as as-yet unnamed party. Its opening expense ratio has not been disclosed.

John Hancock Diversified Macro Fund

John Hancock Diversified Macro Fund will seek long-term capital appreciation. The plan is to act like a global macro hedge fund. I wish them well. The fund will be managed by Kenneth Tropin and Pablo Calderini. Its opening expense ratio is between 1.34-2.45% depending on share class, and the minimum initial investment will be $1000 for retail shares and $250,000 – $1 million for institutional share classes.

Quantified Tactical Fixed Income Fund

Quantified Tactical Fixed Income Fund will seek total return. The plan is to do tactical stuff with fixed income: non-diversified, long and short, domestic and global, investment grade and not, government and corporate.  They’ve got three models to help them “balance high return, low correlation, and low volatility” while being aggressively tactical. The fund will be managed by Jerry C. Wagner and Jason Teed of Flexible Plan Investments. Its opening expense ratio is 1.77%, and the minimum initial investment will be $10,000.

Quantified Evolution Plus Fund

Quantified Evolution Plus Fund will seek capital appreciation. The plan is to do tactical stuff with equity, debt, gold and commodities. It’s going to be aggressive and it’s going to be non-diversified but, in bad times, it can reach to short-term fixed income. The fund will be managed by Jerry C. Wagner and Jason Teed of Flexible Plan Investments. Its opening expense ratio is 1.77%, and the minimum initial investment will be $10,000.

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About David Snowball

David Snowball, PhD (Massachusetts). Cofounder, lead writer. David is a Professor of Communication Studies at Augustana College, Rock Island, Illinois, a nationally-recognized college of the liberal arts and sciences, founded in 1860. For a quarter century, David competed in academic debate and coached college debate teams to over 1500 individual victories and 50 tournament championships. When he retired from that research-intensive endeavor, his interest turned to researching fund investing and fund communication strategies. He served as the closing moderator of Brill’s Mutual Funds Interactive (a Forbes “Best of the Web” site), was the Senior Fund Analyst at FundAlarm and author of over 120 fund profiles. David lives in Davenport, Iowa, and spends an amazing amount of time ferrying his son, Will, to baseball tryouts, baseball lessons, baseball practices, baseball games … and social gatherings with young ladies who seem unnervingly interested in him.