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September 2015, Funds In Registration

By David American Beacon Bridgeway Large Cap Growth Fund American Beacon Bridgeway Large Cap Growth Fund will seek long-term total return on capital, primarily through capital appreciation. Bridgeway is selling their LCG fund to American Beacon, pending shareholder approval. The fund will still be managed by John Montgomery and the Bridgeway team. The initial expense ratio will be 1.20%, rather above the current Bridgeway charge. The minimum initial investment is $2500. Aristotle Small Cap Equity Fund Aristotle Small Cap Equity Fund will seek long-term capital appreciation by investing in high quality, small-cap businesses that are undervalued. The fund will be managed by David Adams and Jack McPherson. The initial expense ratio will be 1.15%. The minimum initial investment is $2,500. Aristotle Value Equity Fund Aristotle Value Equity Fund will seek long-term capital appreciation by investing mostly in undervalued mid- and large-cap stocks. The fund will be managed by Howard Gleicher, Aristotle’s CIO. The initial expense ratio will be 0.68%. The minimum initial investment is $2,500. Aston/River Road Focused Absolute Value Fund Aston/River Road Focused Absolute Value Fund will seek long-term capital appreciation. The plan is to deploy that “proprietary Absolute Value® approach,” in hopes of providing “attractive, sustainable, low volatility returns over the long term.” The fund will be managed by Andrew Beck, River Road’s CEO, and Thomas Forsha, their co-CIO. The initial expense ratio will be 1.26%. The minimum initial investment is $2,500, reduced to $500 for various sorts of tax-advantaged accounts. Brown Advisory Equity Long/Short Fund Brown Advisory Equity Long/Short Fund will seek to provide long-term capital appreciation by combining both “long” and “short” equity strategies. The plan is pretty straight forward: go long on securities with “few or no undesirable traits” and short the ugly ones. They have the option of using a wide variety of instruments (direct purchase, ETFs, futures and so on) to achieve that exposure. The fund will be managed by Paul Chew, Brown Advisory’s CIO and former manager of the Growth Equity fund. The initial expense ratio will be 2.24% for investor shares and 2.49% for advisor shares. The minimum initial investment is $5,000 for investor shares and $2000 for advisor shares, which are designed to be purchased through places like Scottrade. Dana Small Cap Equity Fund Dana Small Cap Equity Fund will seek long-term growth. The plan is to create a risk-managed portfolio by using a sector-neutral, relative-value, equal-weight discipline. The large cap version of the strategy has been around for five years and has been perfectly respectable if not particularly distinguished for good or ill. The fund will be managed by a team from Dana Investment Advisers. The initial expense ratio will be 1.20%. The minimum initial investment is $1,000. Driehaus Turnaround Opportunities Fund Driehaus Turnaround Opportunities Fund will seek to maximize capital appreciation, while minimizing the risk of permanent capital impairment, over full-economic cycles. The plan is to invest in the equity and debt securities of “distressed, stressed and leveraged companies,” on the popular premise that they’re widely misunderstood and their securities are often incorrectly priced. The fund will be managed by Elizabeth Cassidy and Thomas McCauley of Driehaus. The initial expense ratio has not been released. The minimum initial investment is $10,000 for retail accounts, reduced to $2000 for retirement accounts. Ensemble Fund Ensemble Fund will seek long-term capital appreciation. The plan is to identify 15-25 high-quality companies with undervalued stock, then buy some. The fund will be managed by Sean Stannard-Stockton, Ensemble’s president and CIO. The initial expense ratio will be 2.0%. The minimum initial investment is $5,000, reduced to $1000 for IRAs and accounts established with an automatic investment plan. FFI Diversified US Equity Fund FFI Diversified US Equity Fund will seek long-term capital growth. The plan is to invest in 40-50 U.S. stocks, with a target portfolio market cap of $20 billion. The fund will be managed by a team from FormulaFolio Investments, led by CIO James Wenk. The initial expense ratio will be a stout 2.25%. The prospectus doesn’t offer any immediate evidence that the guys will overcome a high expense ratio in such a competitive slice of the market. The minimum initial investment is $2,000, reduced to $1,000 for retirement accounts and those established with an automatic investing plan. Gripman Absolute Value Balanced Fund Gripman Absolute Value Balanced Fund will seek long-term total return and income. The plan is to pursue a conservative asset allocation on the order of 30% equity/70% intermediate-term fixed income. A sliver might be in junk bonds. The fund will be managed by Timothy W. Bond. The initial expense ratio hasn’t been announced. The minimum initial investment is $2,000. Harbor Diversified International All Cap Fund Harbor Diversified International All Cap Fund will seek long-term growth of capital. The plan is to invest mostly in cyclical companies, which you typically buy when they look absolutely ghastly and sell as soon as they start looking decent. The fund will be managed by a very large team led by William J. Arah from Marathon Asset Management, a London-based adviser. Mr. Arah founded Marathon, which also serves as sub-advisor to Vanguard Global Equity. The initial expense ratio will be 1.22%. The minimum initial investment is $2,500. Iron Equity Premium Income Fund Iron Equity Premium Income Fund will seek to provide superior risk-adjusted total returns relative to the CBOE S&P 500 BuyWrite Index (BXM). The plan is to buy ETFs which track the S&P 500 while writing call options to generate income. The fund will be managed by a team from IRON Financial. The initial expense ratio will be 1.45%. The minimum initial investment is $10,000. Preserver Alternative Opportunities Fund Preserver Alternative Opportunities Fund will seek high total returns with low volatility. The plan is to hire sub-advisers to do pretty typical liquid alts stuff in the portfolio. The subs have not yet been named, though. The initial expense ratio will be 2.43%. The minimum initial investment is $2,000. Quantified Self-Adjusting Trend Following Fund Quantified Self-Adjusting Trend Following Fund (really? It feels like they consulted with Willy Wonka to select their name.) will seek “high appreciation on an annual basis consistent with a high tolerance for risk.” Do you suppose it’s really seeking a high tolerance for risk, or merely requires that prospective investors have a high tolerance? The plan is to determine the market’s trend, then invest in ETFs, leveraged ETFs or inverse ETFs. If there’s no discernible trend, they’ll invest in bonds. The fund will be managed by Jerry Wagner, President of the Flexible Plan Investments, and Dr. Z. George Yang, their director of research. The initial expense ratio will be 1.75%. The minimum initial investment is $10,000. T. Rowe Price Mid-Cap Index Fund T. Rowe Price Mid-Cap Index Fund will seek to match the performance of the Russell Select Midcap Completion Index, with a correlation of at least 0.95. The fund will be managed by Ken D. Uematsu. The initial expense ratio will be 0.32%. T. Rowe Price Small-Cap Index Fund T. Rowe Price Small-Cap Index Fund will seek to match the performance of the Russell 2000®Index with a correlation of at least 0.95. The fund will be managed by Ken D. Uematsu. The initial expense ratio will be 0.34%.

Where Can I Find Safe Income For Retirement?

Summary What should a retiree do? Where should he go? How can one get income with safety? The Question You don’t want to rely on ever seeing another paycheck. You want a steady income. But you demand safety – the lowest possible chance of a permanent impairment of capital. So you won’t simply overpay in order to construct the appearance of steady income. So, what are you supposed to do? Non-Answers and Bad Answers The easiest way to address the question is to ignore it, then offer a non-answer by violating at least one critical element. You could take a flier on something and then double down when it crashes… but that is problematic if you are not expecting subsequent paychecks with which to double down. You could forego a steady income, draw down savings, and live above or below your means… but above sounds dangerous and below sounds miserable. You could invest heavily in investment grade and government bonds for a steady paycheck… but that does not take into account the risk of overpaying. These are all non-answers. High priced helpers/”HPHs” are typically enthusiastic in their view that this is all so complex that you should spend a lot of money on fees for high priced helpers. Annuity salesmen are second to none in their single-minded view that you should buy an annuity. Private bankers are no better (but mine has good coffee and real paintings instead of burnt coffee and motivational posters). You hear folksy advice such as, “own bonds in a percentage equal to your age” or “focus exclusively on dividends and high-quality companies.” This is real advice, but it is also bad advice. Part of the problem that allows charlatans to get away with flimflam is that older folks are often easy prey. They are often honest and expect others to be too. They are often used to their lives before retirement, so are a bit disoriented by changes as they move into retirement. Many want a reassuring, friendly advisor. These obvious and perfectly reasonable market demands are supplied by many people with firm handshakes, steady eye contact, reassuringly modulated vocal tones, and utterly vacuous ideas about investing. The Standard Before trying to offer a sensible answer, I want to raise the standard for what a valuable answer would look like. It takes seriously the charge that you have seen your last paycheck. You know that it is increasingly common to see 80-year old Wal-Mart (NYSE: WMT ) greeters and you do not intend to ever be one. That means that your investments need to sustain you and your spouse for your remaining years. Oh, and thanks to modern medicine, that life expectancy could be much longer and much more expensive than anything you ever imagined. Your steady income should come from investments that meet the same standard that should be maintained by anyone else: they should be available for purchase at a significant discount to their intrinsic values. Never overpay. You certainly should not start now. Cost Savings and Tax Efficiency I am not a big fan of self-sacrifice. At least I prefer getting onto the efficiency curve before doing anything sacrificial. To that end, a key step in retirement planning is to zero out all of the expenses for goods and services that you don’t care about. This is a great time to kill off any habits. You might have paid a given bill for five years or for fifty years, but if it is not for something that you need or love, then cancel it. One of the biggest cost centers can be your home. Are you paying for a lot of externalities (if you live in Manhattan, the answer is “yes”)? Do you love your nightly table at Masa and front row seats at Broadway openings? If not, then move. I do not intend this to be overly prescriptive. Instead, my goal is to advocate for intentionality. But there are some great choices beyond heaven’s Floridian waiting room. Domestically, Wyoming is a favorite of mine. Internationally, Dominica is worth checking out. But any expenses should be reflective of only what you need or what you love. Just because you come from Detroit, doesn’t mean that you have to stay (even if there are some real estate bargains ). While everybody has unique preferences, I cannot imagine a good reason to pay any state income tax in retirement. My wife vetoed Alaskan winters, but other than that, there are some great income-tax-free states. In terms of weather and other seasonal hardships associated with income-tax-free states, that can be avoided, too, if you are willing to couple undesirable seasons at home with off-season travel abroad. I, for example, dislike turkey so have gone to Paris for several Thanksgivings at dirt cheap prices. No Bonds HPHs frequently think of risk as a function of asset class along the lines of “cash is safe, stock is risky, and bonds are in the middle”. In reality, risk is never a function of asset class; it is a function of price. Thinking proxies such as asset class-based risk models are designed only to excuse HPHs from doing any fundamental analysis to determine value. They can’t make you safe because they can’t even define, let alone quantify, risk. If you are a 65-year-old retiree, a smart sounding HPHs might say that you should be 65% in bonds, with others arguing importantly that the right number is 70% or 60%. The right number is 0%. Alternatively, come up with an explanation of how the credit market is currently undervalued. I could, of course, be completely wrong, but the current credit market looks like an epic bubble. It is conventional to own a lot of bonds, but when the bubble bursts, you will conventionally lose a lot of money. Bond Substitutes The equity market offers compelling bond substitutes that offer yields in excess of investment grade bonds with less risk in the form of event-driven opportunities. Here are the prospective opportunities in current deal spreads. A portfolio of these, whether in a fund or on their own, is both safer and more lucrative than bonds. Returns are listed on an annualized basis. Click on comments for additional deals on the specific opportunities. The best seven risk-adjusted opportunities are in bold. Either a concentration on the seven that I identified as the best risk-adjusted returns or portfolio of the broader list could help diversify and add yield to a portfolio while lowering its sensitivity to the overall market direction. Cash Cash is an investment in your future flexibility. I keep a cash balance of at least 20% of my assets. In addition to its convenience and its stability, I recently mentioned that: Cash has other virtues. Instead of buying real estate with cash, my local mortgage broker got me a tax-efficient mortgage that costs 2% before taxes (and less on an after tax net basis). This allows me to build up a larger pile of cash on the sidelines to use opportunistically. I have hundreds of separate deposit accounts, most with balances beneath the $250,000 deposit insurance cap. I keep these accounts in institutions with diverse geographies and regulatory jurisdictions. Most are at institutions that have equity options attached to their deposits in the form of potential future mutual conversions. So even if your cash allocation is on the high side, it does not dilute your overall performance, as long as you can exploit a half-dozen to dozen conversions each decade. Equity For some significant part of your equity exposure, you will beat most peers by simple, low-cost, tax-efficient passive exposure. While I would not quibble over details, Vanguard’s Total Stock Market Portfolio is my personal favorite. You get a bunch of free trades with balances over $10 million, too (and some with balances over $1 million). I have a mild preference for the mutual structure (I appreciate the irony given that a large part of my investment history has been exploiting de-mutualizations). Real Estate Inflation is a retirement killer. My #1 favorite inflation hedge is to simply pre-purchase the stuff you want in retirement. As I recently wrote : This doesn’t work with technology or lettuce, but if you have a good sense of what you want when you retire, just go ahead and buy it. Pre-purchasing the stuff you are going to want is the world’s most perfect inflation hedge. This works best if you have pretty durable tastes. For instance, if (as is my case) you are land-crazy and want to live on the water… just buy up waterfront land. If it is just what I want to own, it matters little to me if it goes down 99% or up 99% in terms of nominal dollar value. Either way, it is still worth 1x the land that I want to own and am not going to sell. It is an end in itself. So, if you know where you want to end up, lock in the real estate at today’s prices. Conclusion If this sounds much like what anyone else should do, that is because it is. Your investments are not about you. They are about upsides, downsides, and probabilities. Anything else is just patronizing HPHs putting your money at risk and jeopardizing your retirement. But if you think for yourself and focus on safety, the decades ahead could look like one long Cialis commercial. Disclosure: I am/we are long DEPO, PRGO, ALTR, WMB, ISSI, PNK, BHI. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital. Rangeley invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our investors, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.

Conservative Sector ETF Ideas For September

Over the last 20 Septembers, the S&P has posted an average performance of zero. If history repeats in September 2015, investors will want to take a conservative approach to sector exchange traded funds this month. The Utilities Select Sector SPDR ETF is usually the top performer among the nine sector SPDRs in the month of September. By Todd Shriber, ETF Professor September is here and that is great news for fans of American football, but financial market data indicate equity bulls would do well to curb what enthusiasm they have left after a trying August. For believers in seasonal trends, it must be noted that over the last 20 Septembers, the S&P has posted an average performance of zero. The benchmark U.S. equity index is traditionally flat in September over that period, according to Equity Clock data. That does not mean sector-level opportunities cease to exist in the ninth month. Rather, the opposite is true, but if history repeats in September 2015, investors will want to take a conservative approach to sector exchange traded funds this month. Utilities The Utilities Select Sector SPDR (NYSEARCA: XLU ) is usually the top performer among the nine sector SPDRs in the month of September, averaging a modest gain in the ninth month of the year, according to CXO Advisory . XLU is in the midst of what is supposed to be a seasonally strong period for the largest utilities ETF as the fund is usually the second-best of the nine SPDRs in August. Indeed, XLU lived up to that track record, but underscoring just how poorly stocks performed last month, XLU lost 4 percent. Only the Energy Select Sector SPDR ETF (NYSEARCA: XLE ) was better among the nine SPDRs. Consumer Staples According to CXO data, the Consumer Staples Select Sector SPDR ETF (NYSEARCA: XLP ) is usually the second-best of the nine SPDRs this month, though like the S&P 500, is usually about flat this month, reminding investors that sometimes less bad is good. However, before backing up the bus on XLP, investors should note that the largest staples ETF was usually the best of the sector SPDRs in August, but that historical data did not mean much as XLP tumbled 6.1 percent last month. Materials & Tech In terms of the worst of the nine SPDRs in September, that dubious honor goes to the Materials Select Sector SPDR ETF (NYSEARCA: XLB ) followed by the Technology Select Sector SPDR ETF (NYSEARCA: XLK ). This is where things get interesting and those things are a reminder that seasonal trading often requires the user to be nimble. Historical data, courtesy of CXO, indicate XLU is usually the best SPDR this month, but that is before it turns into October’s worst. Conversely, XLK is historically the second-worst SPDR in September before it becomes the best of the nine in October. Disclaimer: Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More…) I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.