Income focused active ETF to list soon Trajan Wealth Income Opportunities ETF (NYSE: TWIO)

Trajan Wealth Income Opportunities ETF

Ticker: TWIO

Exchange: NYSE Arca

Expense ratio: 0.55%

Original filing date: November 5, 2019

Effective date: January 20, 2020

Listing Date: April 1, 2021

CUSIP: 84858T509

Active: Yes

Index / Benchmark: N/A

Investment Objective:

Seeks to provide current income, conservation of principal and the opportunity for limited capital appreciation.

 

Investment Strategy:

Security type	Allocation range
Preferred securities	35-55%
Fixed income securities	15-35%
Common stocks	20-30%

Constituents: 30-50 holdings

 

Adviser: OBP Capital, LLC

Sub-Adviser: Trajan Wealth, LLC

 

Adminstrator: The Nottingham Company

Fund accountant: The Nottingham Company / Nottingham Shareholder Services LLC

Custodian: Clear Street, LLC

Distributor: Capital Investment Group, Inc.

Legal counsel: Greenberg Traurig LLP

External accounting: BBD, LLP

https://trajanwealthetf.com

https://www.linkedin.com/company/trajan-wealth-llc/

Locations in Arizona, Oklahoma, and Utah

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S000067575

Principal Investment Strategies

The Fund is an actively managed exchange-traded fund (“ETF”). As an actively managed fund, the Fund will not seek to replicate the performance of an index. The Fund seeks to achieve its investment objective by investing in a combination of domestic preferred securities, income producing fixed income securities, and income producing common stocks. In selecting securities for the Fund, the Sub-Advisor’s investment process is driven by a comprehensive analysis of a firm’s capital structure with the goal of investing in securities that the Sub-Advisor believes represent the best relative value compared to other securities in the investment universe. This analysis is done using an investment process that combines a bottom-up and top-down approach to security selection that includes three significant areas of analysis: credit fundamentals (strength of the balance sheet, measures of ability to meet interest payments, and measures of ability to service debt); relative value in comparison to similar assets; and technical aspects of securities (interest rate sensitivity, call features, maturities, trading volumes, liquidity and pricing). The bottom-up analysis focuses individual security analysis, including risks specific to the security, credit fundamentals, liquidity and other factors. The top-down analysis takes into account the target allocation of the portfolio, industry exposure, the current economic environment, and the Sub-Advisor’s assessment of the direction of interest rates, equity market valuations and other macro factors.

Preferred securities are a type of equity security that are senior to and have preference over common stock in the payment of dividends as well as asset distributions upon any liquidation of a company’s assets, but they are generally junior to all forms of the company’s debt, including both senior and subordinated debt. The Fund’s investments in preferred securities will primarily be in retail preferred securities. Retail preferred securities are preferred securities targeted to retail investors and are exchange traded at single share prices of $25, $50 or $100. The Fund may invest in preferred securities of any market capitalization (including nano, micro, small, medium, and large capitalization). Although the Fund may invest in individual issues of retail preferred securities with market capitalizations as low as $50 million, the Fund will generally invest in individual issues of retail preferred securities of issuers that have a total market capitalization of at least $150 million. There is no maximum capitalization for the preferred securities in which the Fund invests. The Fund may also invest in preferred securities issued by real estate investment trusts (“REITs”) as well as corporate bonds, convertible securities and corporate debt securities.

The Fund’s investments in preferred securities and income producing debt securities may include both investment grade securities and securities that are rated below investment grade (commonly referred to as “junk bonds,” which are speculative and may include securities rated “BB+/Ba1” or lower by S&P Global Ratings, Fitch Ratings, Inc., and/or Moody’s Investors Service, Inc. or equivalent by another nationally recognized statistical rating organization as well as non-rated securities) at the time of purchase.  The Fund may invest in securities of any maturity. While the Fund does not have a duration target, it is anticipated that the duration will generally range from 4 to 7 years.

The Fund may also invest up to 30% of its net assets in common stocks and other dividend paying securities. The Fund is classified as “non-diversified” for purposes of the Investment Company Act of 1940 (the “1940 Act”), which means a relatively high percentage of the Fund’s assets may be invested in the securities of a limited number of companies. The Fund’s investments may be in the same or related economic sectors, including financial companies, energy companies, healthcare companies, and REITs.

iShares to list Intl Dev Small Cap Value ETF

iShares International Developed Small Cap Value Factor ETF

Ticker: ISVL

Exchange: Cboe BZX Exchange, Inc.

Expense ratio: 0.30%

Original filing date: October 29, 2020

Effective date: January 12, 2021

Listing Date: TBD

CUSIP: 46436E510

Active: No

Index / Benchmark:

FTSE Developed ex US ex Korea Small Cap Focused Value Index

 

Investment Objective:

Seeks to track the investment results of an index composed of international developed market small-capitalization stocks, excluding the U.S. and Korea, with prominent value characteristics.

 

Investment Strategy / Index Methodology:

• Parent Index: FTSE Developed ex US ex Korea Small Cap Index
• Screen out 20% most illiquid, then
• Screen out 20% with highest volatility, then
• Screen out 20% with highest leverage, then
• 80%x80%x80% = 51.2%
• Exclude companies with negative sentiment score (more downgrades than upgrades), and
• Exclude negative price momentum (monthly price returns trailing 12 months), then
• Each company ranked by assigned weighted composite score (price-to-book, price-to-earnings and price-to-cash flow from operations)
• Number of companies selected is 25% of parent index company count (unclear if this means the top 25% as per their composite score, or just a random 25%)
• Weighted by their float adjusted market cap with a country constraint (?)

Constituents: 450 - 550

 

Adviser: BlackRock Fund Advisors

 

Adminstrator: State Street Bank and Trust Company

Fund accountant: State Street Bank and Trust Company

Custodian: State Street Bank and Trust Company

Distributor: BlackRock Investments, LLC

Legal counsel: WILLKIE FARR & GALLAGHER LLP

External accounting: PricewaterhouseCoopers LLP

 

Prospectus is here.

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S000070653

Principal Investment Strategies

The Fund seeks to track the investment results of the FTSE Developed ex US ex Korea Small Cap Focused Value Index (the “Underlying Index”), which is an objective, rules-based equity index provided by FTSE International Limited (the “Index Provider” or “FTSE”). The Underlying Index measures the performance of international developed market small-capitalization companies, excluding the U.S. and Korea, with prominent value factor characteristics, as determined by the Index Provider. The Underlying Index is a subset of the FTSE Developed ex US ex Korea Small Cap Index (the “Parent Index”), which measures the performance of the small-capitalization segment of the international developed market, excluding the U.S. and Korea, as defined by the Index Provider.

The construction of the Underlying Index begins with the Parent Index and excludes companies that are ranked in the least liquid 20% based on the 60-day average dollar value traded. The list of eligible constituents is then narrowed to exclude the top 20% of Parent Index constituents with the highest risk based on a 12-month trailing realized volatility. The list is further narrowed to exclude the top 20% of Parent Index constituents with the highest leverage, which is measured by comparing a company’s total debt to its total assets. Following these three initial screens, the remaining companies are evaluated to exclude companies with a negative sentiment score and negative price momentum. The sentiment score is calculated using the number of upgrades for earnings per share and the number of downgrades for earnings per share for a company's current and next fiscal year. A company with more downgrades for earnings per share than upgrades will have a negative sentiment score. Negative price momentum is determined based on monthly price returns over the trailing 12 months, excluding the latest month. The remaining companies are then ranked based on a weighted composite score of three value factor metrics; price-to-book, price-to-earnings and price-to-cash flow from operations (the “Composite Score”). The number of stocks selected is based on 25% of the Parent Index by count. The selected securities are weighted in proportion to their float adjusted market capitalization with a country constraint of +/- 10% relative to the Parent Index to form a baseline or target composition (the “Target Index”). The Underlying Index will be reviewed monthly and rebalanced to the Target Index if either of the following conditions are met: (i) the Underlying Index’s Composite Score is less than 90% of the Target Index’s Composite Score; or (ii) the Underlying Index has fewer than 20% of the number of securities by count of the Parent Index. If no rebalance is triggered, the component securities of the Underlying Index and their weights will remain unchanged. The Underlying Index may not rebalance for a period of time and is typically comprised of between 450 - 550 components.

As of December 31, 2020, a significant portion of the Underlying Index is represented by securities of companies in the industrials and real estate industries or sectors. The components of the Underlying Index are likely to change over time. As of December 31, 2020, the Underlying Index was comprised of 503 components.

BFA uses a “passive” or indexing approach to try to achieve the Fund’s investment objective. Unlike many investment companies, the Fund does not try to “beat” the index it tracks and does not seek temporary defensive positions when markets decline or appear overvalued.

Indexing may eliminate the chance that the Fund will substantially outperform the Underlying Index but also may reduce some of the risks of active management, such as poor security selection. Indexing seeks to achieve lower costs and better after-tax performance by aiming to keep portfolio turnover low in comparison to actively managed investment companies.

BFA uses a representative sampling indexing strategy to manage the Fund. “Representative sampling” is an indexing strategy that involves investing in a representative sample of securities that collectively has an investment

profile similar to that of an applicable underlying index. The securities selected are expected to have, in the aggregate, investment characteristics (based on factors such as market capitalization and industry weightings), fundamental characteristics (such as return variability and yield) and liquidity measures similar to those of an applicable underlying index. The Fund may or may not hold all of the securities in the Underlying Index.

The Fund generally will invest at least 80% of its assets in the component securities and other instruments of the Underlying Index and may invest up to 20% of its assets in certain futures, options and swap contracts, cash and cash equivalents, including shares of money market funds advised by BFA or its affiliates (“BlackRock Cash Funds”), as well as in securities not included in the Underlying Index, but which BFA believes will help the Fund track the Underlying Index. The Fund seeks to track the investment results of the Underlying Index before fees and expenses of the Fund.

The Fund may lend securities representing up to one-third of the value of the Fund's total assets (including the value of any collateral received).

The Underlying Index is sponsored by FTSE which is independent of the Fund and BFA. The Index Provider determines the composition and relative weightings of the securities in the Underlying Index and publishes information regarding the market value of the Underlying Index.

Zacks refiles for their first ETF, again

Zacks Earnings Constant Portfolio ETF

SUMMARY

Active ETF that invests in portfolio of approximately 100 US securities with stable EPS regardless of economic cycle.

ANALYSIS

Bottom Line: Fairly good chance of gathering assets due to existing distribution network and investors in current funds. Strategy is straightforward and offers stability rather than outsize returns, great for the mature pre-retirement crowd.

The investment adviser, Zacks Investment Management, is a fairly successful concern as it has $5 billion under management in various mutual funds and mandates, in addition to institutional strategies. They are not related (that I can tell) to Zacks Investment Research which is involved in ETFs with various ETF sponsors. However, both are based out of Chicago so there might not be an obvious link.

The investment strategy of this newly filed ETF, the strategy resembles the Adviser's existing mutual fund, the Zacks All-Cap Core Fund (CZOVX) (AUM $50 million - launched in 2006) in terms of focus on all caps, earnings analysis, and the number of target companies in the fund. CZOVX charges 1.00% net expense ratio, with possibly other regular mutual fund fees such as 12b-1, etc.

Zacks Investment Management currently has two exemptive relief applications filed, for passive and active ETFs. Neither have yet been approved.

The adviser has a good following by the major wirehouses and a long track record. Zacks' incursion into ETFs is a logical one to broaden distribution rather than substitute their existing investor base. Furthermore, current distributors may see their ETF offering as an alternative response to their investors' desires for ETF holdings.

Ticker:  TBD

Exchange:  TBD

Expense ratio:  TBD

Original filing date: March 18, 2021

Effective date: June 1, 2021

Listing Date: TBD

CUSIP: TBD

Active: Yes

Index / Benchmark: [tbd]

 

Investment Objective:

Seeks to provide long-term total returns and minimize capital loss.

 

Investment Strategy:

Portfolio of companies with track record of moving through recessionary periods with little impact on aggregate earnings growth relative to the overall equity market.

Universe of stocks: Top 400 small, mid, large cap US equity securities not in financial, energy, utility, precious metals, or commodity sectors.

Quantitative Analysis:

200 companies from this universe with highest historic and forecasted EP stability:

• Historic EPS stability is determined by evaluating the variability of the company’s EPS over the past 20 years. 
• Forecasted EPS stability is determined by evaluating the forecasted variability of the company’s earnings over the next 3 years.

Qualitative Analysis:

• Financial statement filing consistency
• Profitability
• Earnings stability in recessionary periods

50 - 120 companies with highest EPS stability selected for portfolio.

Constituents: 50 - 120

 Adviser: Zacks Investment Management, Inc.

Adminstrator: Gemini Fund Services, LLC

Fund accountant: Gemini Fund Services, LLC / Brown Brothers Harriman & Co.

Custodian: Brown Brothers Harriman & Co.

Distributor: TBD

Legal counsel: Greenberg Traurig LLP

External accounting: TBD

 

Prospectus is here.

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S000066608

Principal Investment Strategies

The Fund pursues its investment objective by constructing a portfolio of companies that exhibit a track record of moving through recessionary periods with little to minimal impact on aggregate earnings growth relative to the overall equity market.

The Fund’s portfolio is composed of 50-120 U.S. exchange-listed companies with the highest historic and forecasted earnings per share (“EPS”) stability. Historic EPS stability is determined by evaluating the variability of the company’s EPS over the past 20 years. Forecasted EPS stability is determined by evaluating the forecasted variability of the company’s earnings over the next 3 years. Those companies with the least variability are selected for the Fund’s portfolio. These quantitative screens are combined with the qualitative judgment of the portfolio manager based on an analysis of financial statement filing consistency, profitability, and earnings stability in recessionary periods.

The Advisor selects the Fund’s portfolio securities from a universe of the top 400 equity securities listed in the U.S. equity market that are not in the Financial, Energy, Utility, Precious Metal, and Commodity sectors, which may be a combination of large, mid, and small capitalization companies. The Advisor then selects 200 companies based on the qualitative judgment of the portfolio manager described above. The 50-120 companies with the highest historic and forecasted EPS stability are then selected for the Fund’s portfolio.

The portfolio is generally rebalanced on a quarterly basis. However, the Advisor may rebalance the portfolio at other times due to things like corporate actions, such as mergers and acquisitions. 

Mutual fund files to become ETF: Cannabis Growth Fund --> ETF

Cannabis Growth ETF

SUMMARY

Actively-managed, invests in companies around the world that derive most of their revenues from legal cannabis activities. 

ANALYSIS

Wil be the first mutual fund to ETF conversion of a cannabis-focused strategy. Will compete with half a dozen other existing ETFs with over $2billion already in AUM. However, the original mutual fund has a track record back to April 2019 (although with only $2million in AUM).

Prognosis is not good, and only edge is its the fund's claim to exposure to multi-state operators.

Ticker: TBD

Exchange: NYSE Arca

Expense ratio: 0.67%

Original filing date: March 15, 2021

Effective date: May 31, 2021

Listing Date: TBD

CUSIP: TBD

Active: Yes

Index / Benchmark: Not Applicable

 

Investment Objective:

seeks to provide long-term capital appreciation.

 

Investment Strategy:

Establish universe of global securities of companies that derive at least 50% of revenues from legal cannabis activities.

Bottom up analysis.

Adviser: Foothill Capital Management, LLC

Portfolio manager: Korey Bauer

 

Adminstrator: Brown Brothers Harriman & Co. + Mutual Fund Administration, LLC

Fund accountant: Brown Brothers Harriman & Co.

Custodian: Brown Brothers Harriman & Co.

Distributor: IMST Distributors, LLC

Legal counsel: Morgan, Lewis & Bockius LLP

External accounting: TBD

 

Prospectus is here.

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S000071980

Principal Investment Strategies

Under normal market conditions, the Fund will invest at least 80% of its net assets (plus any borrowings for investment purposes) in exchange-traded equity securities of companies engaged in legal cannabis-related businesses. These companies are located around the globe and are engaged exclusively in legal activities under national and local laws, including U.S. federal and state law, as applicable (“Cannabis Companies”). Cannabis Companies are exchange traded and legally participate in the following activities:

 

● Agriculture technology: Companies that support the innovation and development of equipment required to cultivate cannabis, such as automated fertilizer systems, greenhouse technologies and improved lighting systems.

 

● Ancillary products and services: Companies that offer products that complement the cannabis industry as a whole, which can include products like a cannabis breathalyzer and laboratories that test cannabis products. This also includes companies that provide insurance to cultivators as well as those that create consumer packaging for products.

 

● Biotechnology: Companies that focus on the pharmaceutical applications of cannabis by developing treatments to target illnesses and diseases.

 

● Cannabis products and extracts: Companies that sell cannabidiol (better known as CBD) products, edibles, topicals, drinks and other products.

 

● Consulting services: Companies that respond to the complexity of rules and regulations regarding cannabis in different jurisdictions. They may provide services to assist with licensing, zoning or advising on operational processes.

 

● Consumption devices: Companies that create products that people use to consume cannabis.

 

● Cultivation and retail: Companies that grow and sell cannabis, and are often the types of businesses that most people think of when discussing the cannabis industry.

 

● Industrial hemp: Companies that provide products using industrial hemp, which is different than cannabis and may have numerous applications and uses, including creating consumer products like paper and clothing, as well as building materials, fuel and foods.

 

The Fund considers a company to be a Cannabis Company if the company derives at least 50% of its revenue from the legal cannabis industry. Cannabis Companies only supply products and/or perform activities that are legal under applicable national and local laws, including U.S. federal and state laws.

 

The equity securities in which the Fund principally invests are common stock, but the Fund also may invest in other types of equity securities, such as shares of exchange-traded funds (“ETFs”) that invest substantially all of their assets in equity securities and in derivatives or other instruments that have economic characteristics similar to such securities, and equity interests in real estate investment trusts (“REITs”). The Fund may invest a significant portion of its assets in one or more ETFs. Certain of those ETFs may invest in derivative instruments including total return swaps. The Fund may invest a majority of its net assets in foreign securities (including emerging market securities) if the Fund’s advisor, Foothill Capital Management, LLC (the “Advisor”), believes that such securities have the potential to outperform U.S. securities. It is anticipated that a large number of holdings within the Fund’s portfolio will be securities of Canadian companies. While the Fund may invest in companies of any market capitalization, including mid-, small- and micro-capitalization, the Fund will invest in companies with market capitalizations of at least $100 million at the time of purchase. The Fund intends to concentrate its investments in the cannabis industry.

 

The Fund’s equity investments will consist only of exchange traded equity securities of companies that are engaged exclusively in legal activities under applicable national and local laws, including U.S. federal and state laws. The Fund will not invest directly in or hold ownership in any companies that engage in cannabis-related business unless permitted by national and local laws of the relevant jurisdiction, including U.S. federal and state laws.

 

The Fund may also purchase and write (i.e., sell) call and put options on individual securities, indexes and ETFs, to manage the position size of individual security holdings, and to seek to enhance the Fund’s return and reduce volatility. When evaluating options, the Advisor considers the amount of the premium received or invested (which is a function of the implied volatility of the underlying security, the strike price, and the time to expiration), the valuation of the underlying security at the exercise price, the weighting of the security in the portfolio if exercised, and the expiration date. The Fund may write (sell) covered call options on securities the Fund holds in its portfolio. In addition, the Fund may lead its portfolio securities to broker-dealers and other institutions as a means of earning additional income.

 

The Advisor employs a strategy that first seeks to identify a universe of exchange-traded securities of companies engaged in the legal cannabis industry across the globe. Utilizing the Advisor’s proprietary screening process, the Advisor evaluates each Cannabis Company using certain criteria such as: (i) long-term growth potential, (ii) price momentum, (iii) financial viability, (iv) branding and market exposure and (v) management team experience. The Advisor also considers the liquidity of a security prior to the Fund buying a position in that security. The Advisor then selects the highest-quality Cannabis Companies that it believes have the strongest sustainable competitive advantage within the universe and offer the potential for strong earnings and growth. The Fund expects to frequently and actively trade its portfolio securities.

 

The Fund is classified as “non-diversified” for purposes of the Investment Company Act of 1940 (the “1940 Act”), which means a relatively high percentage of the Fund’s assets may be invested in the securities of a limited number of companies that could be in the same or related economic sectors.

 

The Advisor will sell all or a portion of a position of the Fund’s portfolio holdings, when in its opinion, one of more of the following occurs, among other reasons: (i) the company no longer meets the definition of Cannabis Companies as defined above; (ii) a particular security has achieved its investment expectations; (iii) the reason(s) for maintaining the position are no longer valid; (iv) the Advisor’s view of the business fundamentals or management of the underlying company changes; (v) a more attractive investment opportunity is found; (vi) general market conditions trigger a change in the Advisor’s assessment criteria; (vii) for other portfolio management reasons; or (viii) the Fund requires cash to meet redemption requests (in instances when the Fund does not meet redemption requests in-kind).

Existing fund manager files for active ETF

Jacob Forward ETF

SUMMARY

Jacob Funds manages almost $150M in three funds. Looking to package up their existing three active mutual funds that are only available to institutional investors and brokerages, Jacob Funds files for ETF that combines all three strategies:

• Internet
• Growth (micro cap)
• Small Cap

ANALYSIS

ETF launches will be an essential channel of distribution for existing asset managers who currently rely on brokerages and intermediary distributors, allowing them to reach retail investors directly. The direct retail channels are becoming more relevant as guerilla investors leverage technology and screen time to access markets and strategies previously only available to large institutional investors or gatekeepers. This is the start of the "filling out" of the long tail end of the ETF provider AUM, allowing small to mid-sized asset managers to collect assets much more democratically.

Ticker: TBD

Exchange: TBD

Expense ratio: TBD

Original filing date: March 15, 2021

Effective date: May 31, 2021

Listing Date: TBD

CUSIP: TBD

Active: Yes

Index / Benchmark: Not Applicable

 

Investment Objective:

Long-term growth of capital.

 

Investment Strategy: Bottom up, tech focused, value and growth companies.

Stocks and equity securities with a bias towards information technology sector.

Up to 25% foreign companies.

Invest in companies based on analysis of their:

Management teams

Leverage of innovative technologies

Growth potential

Reasonable valuations

Combination of the investment strategies of their existing three funds:

• Jacob Internet Fund - JAMFX
• Jacob Small Cap Growth Fund - JSCGX (Class R) and JSIGX (Class I)
• Jacob Discovery Fund - JMCGX (Class R) and JMIGX (Class I)

https://www.jacobmutualfunds.com/investment-funds

Adviser: Jacob Asset Management of New York LLC

Adminstrator: U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services

Fund accountant: U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services

Custodian: U.S. Bank National Association

Distributor: Quasar Distributors, LLC, a subsidiary of Foreside Financial Group, LLC,

Legal counsel: Stradley Ronon Stevens & Young, LLP

External accounting: TBD

Website (not active yet): www.jacobforwardetfs.com

www.jacobforwardetfs.com

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S000071967

Principal Investment Strategy

The Fund seeks to achieve its investment objective by investing in common stocks and other equity securities of companies of all sizes. The Fund maintains a diversified portfolio of investments consisting primarily of common stocks. The Fund may also invest in other equity securities, such as preferred stocks, rights, or warrants. The Fund may have significant exposure to the information technology sector.

The Fund invests in a broad group of companies, including many that are in their early stages of development. In researching securities for the Fund, the Adviser is seeking strong, forward-looking management teams that can leverage innovative technology to obtain sustainable competitive advantages in order to generate superior rates of growth. The Adviser’s overall stock selections are based on its qualitative and quantitative assessment of a company’s fundamental prospects, particularly a company’s potential for superior long-term growth of capital. It is the Adviser’s goal to maximize the growth potential of the Fund while also striving to acquire securities at reasonable valuations relative to their prospective growth rates.

The Adviser expects to invest the Fund’s net assets primarily in U.S. companies, but may gain exposure to foreign markets, including emerging markets, (i.e., those that are in the early stages of their industrial cycles), through the global operations of U.S. companies, by purchasing depositary receipts or securities of foreign companies traded on U.S. exchanges, or through direct investment in foreign companies. The Adviser currently does not expect to invest more than 25% of the Fund’s net assets directly in foreign companies.