March 2024 IssueLong scroll reading

Briefly Noted

By TheShadow


Beware of big promises! Several articles have been written recently about BOXX ETF. Alpha Architect 1-3 Month Box ETF which tries to outperform an ultra-cheap vanilla ETF by using an option swap strategy. In theory, the game will allow investors to pay the long-term capital gain rate on their games rather than the ordinary income rate.

Here’s the advisor’s description of their strategy:

is an actively managed exchange-traded fund whose investment objective is to provide investment results that, before fees and expenses, equal or exceed the price and yield performance of an investment that tracks the 1-3 month sector of the United States Treasury Bill market. To do so, the principal investment strategy of the Fund will be to utilize an exchange-listed options strategy called a box spread. In order to accomplish its investment goals, the Fund may utilize either standard exchange listed options or FLexible EXchange® Options or a combination of both. Investors have to pay long term capital gains at a time of their choosing when they sell. 

There has been a short but useful discussion of the strategy on the MFO discussion board. The short summary might be: “Yeahhhhh… depending on your tax situation and state of residence, you might get a tiny advantage here compared to a simple 1-3 month Treasury ETF.” You can check the Alpha Architect website for more information. Caveat Emptor to prospective interested investors.

Briefly Noted . . .

Crypto rolls on: Following the SEC’s surrender, a dozen bitcoin ETFs launched in February. The Wall Street Journal reports that “at least 10 firms including BlackRock and Fidelity Investments have filed applications to launch what would be the first US-listed ETFs holding ether, the second-largest cryptocurrency” (“Wall Street Expands ETF Plans to Ether,” 2/28/2024).

Green Flight rolls on: In the latest example of the dictum “our funds are run by our marketers,” WisdomTree announced that effective March 15, 2024, WisdomTree Emerging Markets ex-State-Owned Enterprises Fund and the WisdomTree China ex-State-Owned Enterprises Fund will no longer consider environmental, social, and governance (“ESG”) issues in their portfolio decisions.

Pioneer seeks the worst of both worlds: the ESG label without the ESG content. For the purposes of the Pioneer Global Sustainable Equity Fund, “ESG” considerations are limited to the exclusion of (a) tobacco companies and (b) companies making more than 10% of revenue from controversial weapons such as cluster bombs and anti-personnel mines. The last US maker of cluster bombs, Textron, got out of the business in 2016. The US production of land mines ended in 2018, according to the Landmine and Cluster Munition Monitor.

Passive overtakes active. Don’t cheer just yet. On February 13, 2024, John Rekenthaler announced that “The inevitable at last arrived. Last month, for the first time, passively managed funds controlled more assets than did their actively managed competitors” (“Index Funds Have Officially Won,”, 2/13/2024). That estimation covers both traditional open-ended mutual funds and ETFs. The drivers of the passive victory include lower costs, lower taxes, and an unrelenting media blitz that treated all passive strategies as if they were the best passive strategies. It’s the equivalent of adding a “low sugar!” sticker on a can of Crisco and declaring it to be a health food.

Thoughtful people are worried about the development because active investors are more capable of policing corporate malfeasance than passive ones. If a corporation chooses to give its CEO a $50 billion compensation package to, say, cover his personal losses from an idiotic decision to buy a social media company, take it private, and ruin it (just a hypothetical, mind you), active investors might (and did) act to block the self-serving idiocy. Passive investors just go along for the ride, regardless.

Potentially, that intrinsic blindness on the part of passive funds can lead to substantial market dislocation. James Mackintosh of the Wall Street Journal argues:

A market dominated by passive investment management means little oversight of what executives spend shareholder cash on, and could lead to share prices disconnected from corporate profitability, as index trackers blindly buy. (“Passive Capitalism is Risky,” Wall Street Journal, 2/28/2024, B7)

A 2020 Boston Fed report notes that the rising dominance of passive strategies “amplify market volatility, and the shift has increased industry concentration” (because money automatically flows toward “the winners”). (Boston Fed, The Shift from Active to Passive Investing: Risks to Financial Stability? 3/15/2020)

Mr. Mackintosh frets a bit that the largest active investors that remain are national wealth funds, such as Norway’s huge investment fund. Such funds have an incentive to police behavior but they are also responsive to the political needs of their governments. That’s not ideal for those of us caught between national governments and huge corporations.

Mortimer is leaving the building. And Vanguard.

Vanguard’s CEO Mortimer “Tim” Buckley will step down by the end of the year. “By the” might mean “at the” or, I suppose, “as soon as we’ve got a new CEO.”  Morningstar analyst Sotiroff reviewed Vanguard’s recent adventures before concluding, “Whoever replaces Buckley should be up to these challenges and more, while also forging ahead on behalf of investors” (Vanguard CEO Tim Buckley to Retire,, 3/1/2024). “Should be” might mean “had damn well better be” or “easy-peasy, they got The Guy revved up and ready to go.”

CLOSINGS (and related inconveniences)

None lately!


Effective March 4, 2024, Clough Long/Short Equity ETF becomes Clough Hedged Equity ETF. The rechristened fund, so far as we can tell, continues to be long/short equity but the managers can dabble in other hedging strategies as well.

Effective February 16, 2024, Defiance Israel Bond ETF became Defiance Israel Fixed Income ETF.

Knowledge Leaders Developed World ETF will be reorganized into the AXS Knowledge Leaders ETF after a shareholder vote is scheduled to vote on the reorganization on or about April 11. From an investor’s perspective, nothing but the name changes.

Effective March 4, 2024, three Monarch index ETFs will own up to the fact that … well, they’re index ETFs. Monarch Ambassador Income ETF will become Monarch Ambassador Income Index ETF; Monarch Blue Chips Core ETF will switch to Monarch Blue Chips Core Index ETF; and Monarch ProCap ETF will be rechristened as Monarch ProCap Index ETF.

Effective February 20, 2024, TrueShares Low Volatility Equity Income ETF became Opal Dividend Income ETF.


Arrow Reverse Cap 500 ETF will be liquidated on or about March 1.

AXS Cannabis ETF will be liquidated on or about February 28.

Bernzott U.S. Small Cap Value Fund will be liquidated on or about March 28.

BNY Mellon Sustainable US Equity ETF, BNY Mellon Sustainable International Equity ETF, and BNY Mellon Sustainable Global Emerging Markets ETF are slated to become Former Funds this month.

Carillon Chartwell Short Duration Bond Fund will be liquidated and terminated on or about April 19, 2024.

JPMorgan Small Cap Sustainable Leaders Fund will be liquidated on or about May 21.

Frontier MFG Global Equity Fund will be closed and liquidated as a series of the Company, effective as of the close of business on the liquidation date, April 30, 2024.

Goldman Sachs Concentrated Growth Fund is slated to merge into Goldman Sachs Enhanced Core Equity Fund (apparently “enhanced” is better than “concentrated” these days) in part because “the reorganization: (i) would rationalize Funds that have the same investment objectives and similar investment strategies (albeit with some notable differences).” The implication, of course, is that the original decision must have been irrational. The reorganization is expected to close on or about April 26, 2024.

Greenwich Ivy Long-Short Fund will be liquidated on March 15, 2024.

KL Allocation Fund will merge into AXS Astoria Inflation Sensitive ETF on May 3, 2024. Put gently, the new fund has nothing to do with the old one. KL stood for Knowledge Leaders and the original plan was to invest solely in firms that fit that bill. The ETF absorbing the fund’s assets invests across asset classes in securities that might benefit from inflation. Its three largest holds are an infrastructure service company, gold, and TIPs.

Pioneer Emerging Markets Equity Fund will be liquidated on or about March 28, 2024.

Touchstone International Growth Fund will merge into Touchstone Sands Capital International Growth Equity on May 24, 2024.

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About TheShadow

The Shadow here! Like Mark, I’m a long-time member of the MFO community. I’ve started over 2300 discussion threads, most focusing on developments in the fund industry. I am a personal investor that was introduced to mutual funds when I was young to fund my college education. As I have grown older, I have expanded my mutual funds holdings to a point where I probably have too many; however, this year they all did extremely well due to the overall performance of the market. I work in the financial industry regulating the consumer finance industry in my state. My hope for the months ahead is that I might share word of developments in the finance industry – the comings and goings, launches and liquidations, the fun and the follies – with you.