The Securities and Exchange Commission, by law, gets between 60 and 75 days to review proposed new funds before they can be offered for sale to the public. Each month, Funds in Registration gives you a peek into the new product pipeline. Most funds currently in registration will become available by year’s end, which is the reason for the surge now
Our list contains 30 new funds and active ETFs. We don’t usually track passive ETFs but did want to mention two this month, both passive ETFs designed to give Muslim investors broad exposure to the stock market and exposure to the equivalent of an investment grade bond fund. Those are the SP Funds S&P 500 Sharia Industry Exclusions ETF and SP Funds Dow Jones Global Sukuk ETF.
Many of the funds this month, in their rush to get this stuff into the pipeline in time for a launch before year’s end, have not determined their expense ratios. Of those who have disclosed expenses, five start life with near-suicidal expenses above 2.0%. Only a couple of the funds stand-out, FMI International Fund II – Currency Unhedged which mirrors the very fine FMI International Fund, and Grandeur Peak US Stalwarts Fund, which follows in the footsteps of Grandeur Peak’s International Stalwarts and Global Stalwarts funds.
Acclivity Broad Equity Multi-Style Fund
Acclivity Broad Equity Multi-Style Fund will seek long-term capital appreciation. The plan is to use a quantitatively driven, factor-based investment strategy to construct a 2000 stock portfolio. The fund will be managed by a team of PhDs from Innealta Capital. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000.
AdvisorShares DWA FSM US Core ETF
AdvisorShares DWA FSM US Core ETF, an actively-managed ETF, seeks long-term capital appreciation with capital preservation as a secondary objective. The plan is to use the FSM Core Solution US Core Model, constructed by Dorsey, Wright, to construct a portfolio of ETFs. The fund may move toward cash if the markets turn ugly. The fund will be managed by Robert M. Parker of AdvisorShares. Its opening expense ratio is reported as 0.xx%.
AlphaCentric Energy Income Fund
AlphaCentric Energy Income Fund will seek total return with an emphasis on current income. The plan is a bit fuzzy with regard to the “income” part but, in general, they’re investing in the common and preferred stocks of energy-related companies, and might involve in bonds and options. The fund will be managed by J.C. Frey and James Baker of Kayne, Anderson. Its opening expense ratio is a steep 1.74%, and the minimum initial investment will be $2,500.
Aperture Small Cap Opportunities Fund
Aperture Small Cap Opportunities Fund will seek a return in excess of the Russell 2000 Total Return Index. (I’m not a fan of the “our plan is to beat the benchmark” mantra.) The plan is to take “long and short positions in equity securities of companies that the Adviser believes are undergoing transformational change.” The focus is on North American small cap stocks. The fund will be managed by Brad McGill of Aperture Investors. Its opening expense ratio is 2.45%, and the minimum initial investment will be $500.
Archer Focus Fund
Archer Focus Fund will seek long-term growth of capital. The plan is to use a “bottom-up” approach to select about 50 stocks. That’s about all the detail I’ve got. The fund will be managed by a team from Archer Investments. Its opening expense ratio is 1.21%, and the minimum initial investment will be $2,500.
Archer Multi Cap Fund
Archer Multi Cap Fund will seek long-term growth of capital. The plan is to buy stock in about 100 domestic companies that are financially sound and have good prospects for the future. The fund will be managed by team from Archer. Its opening expense ratio is 1.21%, and the minimum initial investment will be $2,500.
Axonic Strategic Income Fund
Axonic Strategic Income Fund will seek to maximize total return, through a combination of current income and capital appreciation. The plan is to invest primarily in asset-backed, income-producing securities with the slightly worrisome note that “for speculative or hedging purposes, the Fund may use various cleared and uncleared over-the-counter and exchange-traded derivatives.” The fund will be managed by a team from Axonic Capital LLC. Its opening expense ratio has not been disclosed nor has the minimum initial investment.
Baron FinTech Fund
Baron FinTech Fund will seek capital appreciation. The plan is to invest in growth stocks, specifically companies that provide technologies or services for the financial services industry and companies that provide financial services using technology. (Uhh … ATMs, Ron?) The fund will be managed by Josh Saltman of Baron Asset Management. Its opening expense ratio has not been released, and the minimum initial investment will be $2,000.
Cambria Global Real Estate ETF
Cambria Global Real Estate ETF, an actively-managed ETF, seeks income and capital appreciation. The plan is to use a computer model that factors in valuation, momentum and quality factors to select 100 global real estate stocks. The portfolio positions will be equally weighted. The fund will be managed by Mebane Faber. Its opening expense ratio is 0.59%.
Catalyst/Teza Algorithmic Allocation Income Fund
Catalyst/Teza Algorithmic Allocation Income Fund will seek long-term capital appreciation and current income. The plan is to use futures contracts to gain broad exposure to different asset classes; with the exposure changing daily. They’re going to target 9-12% annualized volatility, and get the best returns they can for that level of risk. The prospectus helpfully offers up 27 single-spaced pages of risks that investors face. The fund will be managed by Dr. Mikhail Malyshev and Dr. Reinhold Gebert of Teza. Its opening expense ratio is 2.24% for “A” shares, and the minimum initial investment will be $2500.
Dynamic Global Diversified Fund
Dynamic Global Diversified Fund will seek capital appreciation and income. It’s a “go anywhere, buy anything” portfolio whose success depends on “the professional judgment of the Adviser” and the Quantitative Framework. The fund will be managed by Vito Sciaraffia, and Josh Kocher of Innealta Capital. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000. This fund appears in the second half of a prospectus that begins with the Acclivity fund, fyi.
First Trust Vivaldi Merger Arbitrage ETF
First Trust Vivaldi Merger Arbitrage ETF, an actively-managed ETF, seeks capital appreciation. The plan is to establish long and short positions in the equity securities of companies that are involved in a publicly-announced significant corporate event, such as a merger or acquisition. The fund will be managed by six guys from Vivaldi Asset Management. Its opening expense ratio has not been disclosed.
FMI International Fund II – Currency Unhedged
FMI International Fund II – Currency Unhedged will seek long-term capital appreciation. The plan is to be FMI International (FMIJX, large cap, value-oriented, quality oriented, successful) without the currency hedge. Such hedges tend to reduce volatility but, like all insurance, come at a cost. Tweedy, Browne made an identical decision – to launch on unhedged version of their international fund – at the behest of shareholders. The fund will be managed by the same 10 people who manage FMIJX. Its opening expense ratio is 1.00% on both Investor and Institutional shares (nice touch, guys), and the minimum initial investment will be $2,500.
Franklin Disruptive Commerce ETF
Franklin Disruptive Commerce ETF, an actively-managed ETF, seeks Capital appreciation. The plan is to invest “in equity securities of companies that are relevant to the Fund’s investment theme.” (Great.) Bottom-up, non-diversified, mostly centered on consumer-discretionary industries. The fund will be managed by Matthew Moberg and Joyce Lin of Franklin Advisers. Its opening expense ratio has not been disclosed. The same prospectus covers the very similar language around the launch of Franklin Genomic Discovery ETF and Franklin Intelligent Machines ETF.
Grandeur Peak US Stalwarts Fund
Grandeur Peak US Stalwarts Fund will seek long-term growth of capital. The “Stalwarts” funds are sort of funds for stocks that have graduated from Grandeur Peak’s core micro-to-small cap growth funds. The portfolios often have stocks that are a bit too large and a bit too sedate for the core funds any longer. In general, the other Stalwarts have been good investments. The fund will be managed by Randy Pearce, and Brad Barth. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $2,000.
Guardian Fundamental Global Equity Fund
Guardian Fundamental Global Equity Fund will seek long-term capital appreciation. The plan is to use bottom-up investment approach to construct a portfolio of mid-to-large cap global stocks, targeting high-quality companies capable of sustaining growth for more than five years. The fund will be managed by Michael Boyd and Giles Warren. Its opening expense ratio is 0.99%, and the minimum initial investment will be $10,000.
Lebenthal Ultra Short Tax-Free Income Fund
Lebenthal Ultra Short Tax-Free Income Fund will seek a high level of current income exempt from federal income tax consistent with relative stability of principal. The plan is to buy munis with a maturity of a year or less. The fund will be managed by Gregory Serbe of DCM Advisers. Its opening expense ratio is 0.74%, and the minimum initial investment will be $1,500.
LHA Market State Alpha Seeker ETF
LHA Market State Alpha Seeker ETF, an actively-managed ETF, seeks positive returns across multiple market cycles that are generally not correlated to the U.S. equity or fixed income markets. The plan is to invest long or short in instruments linked directly or indirectly to the performance and/or volatility of the S&P 500® Index. The fund will be managed by Michael and Matthew Thompson of Thompson Capital. Its opening expense ratio has not been disclosed.
Midwood Long/Short Equity Fund
Midwood Long/Short Equity Fund will seek long-term capital appreciation. The plan is to buy small value stocks and short small growth stocks. This is a former hedge fund, Midwood Capital Partners, L.P., that has, but has not disclosed, a long track record. The fund will be managed by David Cohen of Crow Point Partners. Its opening expense ratio is 2.25%, and the minimum initial investment will be $1000.
Princeton Alternative Premium Fund
Princeton Alternative Premium Fund will seek capital appreciation and income. The fund relies on two principal investment strategies: 1) a premium collection strategy involving sale or purchase of put options on the S&P 500 Index and 2) investing in fixed income securities. The fund will be managed by Greg Anderson and John L. Sabre of Princeton Fund Advisors. Its opening expense ratio has not been disclosed and the minimum initial investment will be $2,500.
Q3 All-Weather Sector Rotation Fund
Q3 All-Weather Sector Rotation Fund will seek long-term growth of capital. It’s a fund of funds and ETFs with the usual plan: use a computer to target which sectors to buy and which to sell, then move to bonds if the equity market is getting too ugly. The fund will be managed by three guys from Q3 Asset Management. Its opening expense ratio is 2.19%, and the minimum initial investment will be zero.
Q3 All-Weather Tactical Fund
Q3 All-Weather Tactical Fund will seek positive rate of return over a calendar year regardless of market conditions. It’s a fund of funds and ETFs with the usual plan: use a computer to target which sectors to buy and which to sell, then move to bonds if the equity market is getting too ugly. Just more conservatively than their other fund does it. The fund will be managed by three guys from Q3 Asset Management. Its opening expense ratio is 2.19%, and the minimum initial investment will be zero.
Raub Brock Dividend Growth Fund
Raub Brock Dividend Growth Fund will seek “long-term capital appreciation growth.” Uhh … they want to grow their appreciation? The plan is to invest in high quality companies with growing dividends. The portfolio will hold 20 stocks. The fund will be managed by Richard Alpert. Its opening expense ratio has not been disclosed nor has the minimum initial investment.
Segall Bryant & Hamill Small Cap Core Fund
Segall Bryant & Hamill Small Cap Core Fund will seek long-term capital appreciation. The plan is to buy US small cap stocks using a combination of quantitative analysis, fundamental analysis and experienced judgment. This is another converted hedge fund, Lower Wacker Small Cap Investment Fund, LLC, with a long though undisclosed record. (Ummm … Lower Wacker Drive in Chicago is a subterranean stretch that could easily double for the set of a post-apocalyptic zombie flick.) The fund will be managed by Jeffrey Paulis and Mark Dickherber of SB&H. Its opening expense ratio is one-point-undisclosed-something percent, and the minimum initial investment will be $2500.
SmartETFs Marketing Technology ETF
SmartETFs Marketing Technology ETF will seek long-term capital appreciation. The plan is to invest in 30 marketing technology companies. The fund will be managed by Dustin Lewellyn, Ernesto Tong and Anand Desai of Penserra Capital on behalf of Guinness-Atkinson, the adviser. Its opening expense ratio has not been disclosed.
SP Funds Dow Jones Global Sukuk ETF
SP Funds Dow Jones Global Sukuk ETF, an actively-managed ETF, will seek to track the performance of the Dow Jones Sukuk Total Return (ex‑Reinvestment) Index. Think of it as the equivalent of an investment-grade bond fund for Muslim investors, who are religiously-proscribed for investing in traditional bonds and other interest-bearing notes. The fund will be managed by CSat Investment Advisory, L.P. Its opening expense ratio has not been released.
SP Funds S&P 500 Sharia Industry Exclusions ETF
SP Funds S&P 500 Sharia Industry Exclusions ETF, an actively-managed ETF, will seek to track the performance, before fees and expenses, of the S&P 500 Sharia Industry Exclusions Index, which was newly-minted in 2019. That comes down to all Sharia-compliant companies in the S&P 500 Index, so think of the S&P500 without sin stocks (guns, porn, alcohol, and banks). The fund will be managed by CSat Investment Advisory, L.P. Its opening expense ratio has not been released.
Trend Aggregation Cannabis ETF
Trend Aggregation Cannabis ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in legal cannabis-related businesses or ETFs using quant process “to identify investment opportunities, based on strong price momentum and companies that are potentially oversold. The Adviser uses multiple investment models that combine market trend and counter trend following, pattern recognition and market analysis … The Fund may invest, a portion of the Fund’s portfolio in volatility ETFs and ETNs, leveraged ETFs and inverse ETFs. In managing the Fund’s portfolio, the Adviser will engage in frequent trading, resulting in a high portfolio turnover rate.” The fund will be managed by Matthew Tuttle. Its opening expense ratio is 1.87%.
