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 not become available until late April.
We found 14 funds in the pipeline. Two stand-out opportunities: an active, non-transparent ETF version of the entirely excellent JPMorgan Large Growth Fund and the first non-Asia offering from Matthews Asia, the Matthews Asia Emerging Markets Fund. The list also includes one transformed hedge fund and one active ETF that started as a passive ETF that mimicked a strong mutual fund. Cool stuff!
6 Meridian Hedged Equity-Index Option Strategy ETF
6 Meridian Hedged Equity-Index Option Strategy ETF, an actively-managed ETF, seeks capital appreciation. They plan to use a strategy pairing a portfolio of equity securities with an index call option writing overlay designed to reduce the exposure of the Fund to broad equity market risk. The equity portion of the portfolio targets large cap, high quality stocks. The fund will be managed by a six person team from 6 Meridian LLC. Its opening expense ratio has not been disclosed.6 Meridian Low Beta Equity Strategy ETF
6 Meridian Low-Beta Equity Strategy ETF
6 Meridian Low Beta Equity Strategy ETF, an actively-managed ETF, seeks capital appreciation. The plan is to rank securities based on measures of quality, then invest in securities with the lowest measured beta among the high quality stocks. The fund will be managed by a six person team from 6 Meridian LLC. Its opening expense ratio has not been disclosed. The same prospectus contains filings for a mega-cap and small cap version of the same strategy.
Ave Maria Focused Fund (AVEAX)
Ave Maria Focused Fund (AVEAX) will seek long-term capital appreciation. The plan is to build an all-cap value portfolio, while “avoiding investments in companies believed to offer products or services or engage in practices that are contrary to core values and teachings of the Roman Catholic Church.” The prospectus offers a list. The fund will be managed by Chadd M. Garcia and Adam P. Gaglio. The team has been managing Ave Maria Growth since July 2019 and January 2020, respectively. Its opening expense ratio is 1.26% and the minimum initial investment will be $2,500.
BlackRock High Yield Muni Income Bond ETF
BlackRock High Yield Muni Income Bond ETF, an actively-managed ETF, seeks to maximize tax-free current income. The plan is to invest at least 80% of the Fund’s net assets in medium- to low-quality bonds. They may also invest up to 20% of its total assets in municipal bonds that are considered distressed securities. The fund will be managed by Kevin Maloney, Michael Perilli and Scott Radell of BlackRock. Its opening expense ratio has not been disclosed.
Driehaus Small/Mid Cap Growth Fund
Driehaus Small/Mid Cap Growth Fund will seek to maximize capital appreciation. The plan is to invest in growth stocks, “based on the belief that fundamentally strong companies are more likely to generate superior earnings growth on a sustained basis and are more likely to experience positive earnings revisions.” There’s also an ESG screen. The fund will be managed by Jeffrey James, Michael Buck, and Prakash Vijayan. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $10,000.
HSBC ESG Prime Money Market Fund
HSBC ESG Prime Money Market Fund will seek liquidity, a high level of current income consistent with the minimization of principal volatility, and consideration of ESG criteria. The plan is to build a portfolio of high quality debt obligations with maturities of 397 days or less. They intend to buy securities mostly from issuers who meet “the minimum ESG criteria” set by the adviser. The fund will be managed by HSBC Global but without named managers. Its opening expense ratio has not been disclosed, and the minimum initial investmen will be $1,000.
JPMorgan Equity Premium Income ETF
JPMorgan Equity Premium Income ETF, an actively-managed ETF, will seek current income while maintaining prospects for capital appreciation. The plan is to invest 80% into lower volatility stocks within the S&P 500 and 20% in exchange-linked notes. At base, ELNs combine stock and call option exposure. Their role is to generate a stream of income. The fund will pay a monthly dividend. The fund will be managed by Hamilton Reiner and Raffaele Zingone. Its opening expense ratio has not been disclosed.
JPMorgan International Growth ETF
JPMorgan International Growth ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to invest in large and mid-capitalization foreign companies with a history of above-average growth or those that the adviser believes are expected to enter periods of above-average growth. The fund will be managed by Shane Duffy and Thomas Murray. Its opening expense ratio has not been disclosed.
JPMorgan Large Cap Growth ETF
JPMorgan Large Cap Growth ETF, a non-transparent, actively-managed ETF, will seek long-term capital appreciation. The plan is to use a bottom-up, growth discipline to select stocks of large, well-established companies. The fund will be managed by Giri Devulapally.Mr. Devulapally manages the five-star JPMorgan Large Cap Growth fund, which boasts $18 billion in assets, a five-star rating, high returns with above-average volatility. Its opening expense ratio has not been disclosed. If the ER is below the fund’s 0.94%, it would be a great, tax-efficient alternative to the fund.
Kayne Anderson Renewable Infrastructure Fund
Kayne Anderson Renewable Infrastructure Fund will seek total return through a combination of current income and capital appreciation. The plan is to invest in a global portfolio of renewable infrastructure company stocks. Those include businesses related to renewable energy production, storage and transmission. The prospectus offers a number of warnings, including the prospect of investing in IPOs, illiquid, thinly traded or resale-restricted stocks. The fund is a converted hedge fund; Kayne Renewable Infrastructure Fund, L.P. (formerly, the Kayne Renewable Energy Income Fund, L.P) have been in operation for about 18 months. The fund will be managed by “J.C.” Frey, Jody Meraz and Justin Campeau of Kayne Anderson. Its opening expense ratio has not been disclosed. Initially only institutional shares with a $250,000 minimum will be offered but the prospectus covers “A” and “C” shares as well.
Knowledge Leaders Developed World ETF
Knowledge Leaders Developed World ETF, an actively-managed ETF, seeks long-term capital appreciation. The plan is to build a global, diversified portfolio of “highly innovative companies,” their so-called “knowledge leaders.” The firm has been managing both active mutual funds and a passive ETF using these same screens; this ETF will absorb the assets of the current passive ETF, which will then be liquidated. The fund will be managed by Steven C. Vannelli and Bryce Coward. Its opening expense ratio is 0.75%.
Matthews Emerging Markets Equity Fund
Matthews Emerging Markets Equity Fund will seek long-term capital appreciation. For their purposes, an “emerging market” is everybody except the United States, Australia, Canada, Hong Kong, Israel, Japan, New Zealand, Singapore and most of the countries in Western Europe. The world is roughly 20 developed countries and 140 emerging markets. The plan is to build a diversified, all-cap portfolio invest in representing “companies capable of sustainable growth based on the fundamental characteristics of those companies.” The fund will be managed by John Paul Lech. Mr. Lech also comanages the Asian Growth and Income Strategy. It’s interesting that this is the fund that an earlier manager of the Asian Growth and Income Strategy, Andrew Foster, urged the firm to launch; when they did not, he left to found Seafarer Overseas Growth & Income. Its opening expense ratio is 1.15% and the minimum initial investment will be $2,500, reduced to $500 for various tax-advantaged products.
