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. Fund companies anxious to have a new fund up and running by December 31st need to have it in the hopper by the third week in October at the latest. And, my goodness, a lot of folks did find time to file with 50 new funds and active ETFs listed in our November issue.
This month brings a far more sedate pace of launches with 19 new products in the pipeline. They continue the trends we identified last month: socially-responsible funds, funds with options strategies, and dumb ideas.
The most notable change is the shift from a passive approach in ESG investing toward an active or “impact” approach. Historically, most socially-responsible funds had a “first, do no harm” mandate: avoid tobacco, weapons, alcohol, porn, or whatever. Impact investors seek out the opportunity to actively advance good: allocate capital to firms seeking to address the global climate crisis, to advance social equity, or whatever. Goldman Sachs, Guidestone, and T. Rowe Price all placed environmental impact funds in the pipeline this month, and all bear watching.
Ballast Small/Mid Cap ETF
Ballast Small/Mid Cap ETF, an actively-managed ETF, seeks to generate positive risk-adjusted returns. The plan is to invest in high quality, financially sound small- and mid-cap companies. A substantial move to cash is a defensive possibility. The fund will be managed by Ragen Steinke, who had, for a decade, been a manager with the Westwood Funds. The separately managed accounts he’s responsible for have market-like returns. Its opening expense ratio is 1.10%.
Cambria Bond Tail Risk ETF
Cambria Bond Tail Risk ETF, an actively-managed ETF, seeks income and capital appreciation. The plan is to invest in a combination of government bonds and put options in order to “hedge against sharp declines in the US Treasury bond market.” The fund will be managed by Mebane Faber. Its opening expense ratio has not been disclosed.
Cambria Global Tobacco ETF
Cambria Global Tobacco ETF, an actively-managed ETF, seeks capital appreciation and income. The plan is to build a global portfolio of 20-50 tobacco companies. The fund will be managed by Mebane Faber. Its opening expense ratio has not been disclosed.
Cambria Junk Tail Risk ETF
Cambria Junk Tail Risk ETF, an actively-managed ETF, seeks income and capital. The plan is to invest in cash and US government bonds and then use a put option strategy to manage the risk of a significant negative movement in the value of US high yield (or “junk”) corporate bonds. The fund will be managed by Mebane Faber. Its opening expense ratio has not been disclosed.
First Trust TCW Emerging Markets Debt ETF
First Trust TCW Emerging Markets Debt ETF, an actively-managed ETF, seeks high total return from current income and capital appreciation. The plan is to buy sovereign, quasi-sovereign, and corporate EM debt. The fund will be managed by a three-person team from TCW. Its opening expense ratio has not been disclosed.
Global X China Disruption ETF
Global X China Disruption ETF, an actively-managed ETF, seeks long-term growth of capital. (You almost would have guessed that the right answer was “China disruption.”) The plan is to invest in firms that fall within “disruptive themes relevant to the economy in China using its proprietary thematic identification process.” The list of what qualifies as a potential disruptor is long enough and vague enough that there’s no sharp focus. The fund will be managed by Phil Lee and Wei Wei Chua. Its opening expense ratio has not been disclosed.
Goldman Sachs Global Environmental Impact Equity Fund
Goldman Sachs Global Environmental Impact Equity Fund will seek long-term capital appreciation. The plan is to invest in firms which aligned to the key themes associated with seeking to solve environmental problems, which include clean energy, resource efficiency, sustainable consumption and production, the circular economy, and water sustainability. The fund will be managed by Alexis Deladerrière. Its opening expense ratio has not been disclosed and the minimum initial investment will be $1,000.
GuideStone Funds Global Impact Fund
GuideStone Funds Global Impact Fund will seek capital appreciation with modest current income. The plan is to generate positive, measurable social impact in accordance with the Adviser’s Christian values, alongside financial returns. The fund will be managed by teams representing three sub-advisers. Its opening expense ratio is 1.24%, and the minimum initial investment will be $1,000.
Krane UBS China A Share Fund
Krane UBS China A Share Fund seeks to maximize capital appreciation. The plan is to buy shares of domestic Chinese firms that have limited foreign investment, which is the significance of the A-shares designation. The target is firms whose shares are mispriced “due to market behavior and market structure.” (Uhh… dudes, that’s all of them.) The fund will be managed by Bin Shi, a member of UBS’s Global Emerging Market and Asia Pacific Equities teams. Its opening expense ratio is 1.74%, and the minimum investment is $2,500.
Morgan Creek Exos SPAC Strategy ETF
Morgan Creek Exos SPAC Strategy ETF, an actively-managed ETF, seeks capital appreciation. The plan is to invest in the trendiest of 2020’s trendy investment baubles: SPACs or “special acquisition corporations” (sometimes called “blank check companies”). SPACs are vehicles that allow managers to raise capital with which to buy target companies. The fund’s management team has not yet been named. Its opening expense ratio has not been disclosed.
Navigator Tactical Investment Grade Bond Fund
Navigator Tactical Investment Grade Bond Fund will seek total return with a secondary goal of current income. The plan is to use a momentum-based process to determine the fund’s allocation among investment-grade securities, intermediate to long-term Treasuries, and T-bills. The fund will be managed by a team from Clark Capital. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $5,000.
Navigator Tactical US Allocation Fund
Navigator Tactical US Allocation Fund will seek long-term capital appreciation. The plan is to allocate between stocks and bonds primarily driven by a modeling process that measures the relative strength or momentum of various asset classes against one another. The fund will be managed by a team from Clark Capital. Its opening expense ratio is “1.[ ]%,” and the minimum initial investment will be $5,000.
North Square Tactical Growth Fund
North Square Tactical Growth Fund will seek long-term capital appreciation. The plan is to invest in a combination of fixed income and equity funds and ETFs, cash, and options. The fund will be managed by Paul M. Frank, Brad A. Thompson and Clayton Wilkin. Its opening expense ratio has not been disclosed, and the minimum initial investment will be $1,000. The same prospectus covers two other funds managed by the same sub-adviser using variations of the fund-of-funds-plus strategy: North Square Tactical Defensive Fund and North Square Trilogy Alternative Return.
Roundhill Streaming Services & Technology ETF
Roundhill Streaming Services & Technology ETF, an actively-managed ETF, seeks capital growth. The plan is to build a non-diversified, global portfolio (a rare combination, by the way) of companies that contribute a variety of streaming-related products and services. That might include SPACs and IPOs. The fund will be managed by Will Hershey, Timothy Maloney, and Mario Stefanidis of Exchange Traded Concepts, LLC. Its opening expense ratio is 0.75%.
Stance Equity ESG Large Cap Core ETF
Stance Equity ESG Large Cap Core ETF, an actively-managed and non-transparent ETF, seeks long-term capital appreciation. The plan is to invest in 30 or so large-cap companies that pass sustainability, financial, risk, and other screens. The fund will be managed by Bill Davis and Kyle Balkisson of Stance Capital. Mr. Davis was a portfolio manager on EAM Sustainable Equity, and Mr. Balkisson is a data geek who led IBM’s cognitive forecasting division. Its opening expense ratio has not been disclosed.
T. Rowe Price Global Impact Equity Fund
T. Rowe Price Global Impact Equity Fund will seek long-term growth of capital. The plan is to generate a positive, measurable environmental and/or social impact (while beating the market). The fund will be managed by Harishankar Balkrishna. Mr. Balkrishna has been at T. Rowe Price for a decade and is an associate portfolio manager for the Global Growth Equity Strategy. Its opening expense ratio is 0.94%, and the minimum initial investment will be $2,500.
TrueShares Low Volatility Equity Income ETF
TrueShares Low Volatility Equity Income ETF, an actively-managed ETF, seeks “capital appreciation [with lower volatility and a higher dividend yield compared to the S&P 500 Index].” I’m not sure whether they’re being shy or uncertain about their objective in brackets. The plan is to buy 25-35 stocks of companies that pay dividends and expect to grow the dividends over time and are trading at attractive valuations. The fund will be managed by Jordan Waldrep of Titleist Asset Management. Previously he’d managed the Vice Fund (VICEX) and Navigator Fund (UNAVX) for USA Mutuals. Its opening expense ratio has not been disclosed.
