CHLD LifeGoal Children Savings ETF (Fees: 0.39%)SAVN LifeGoal General Savings ETF (Fees: 0.29%)HOM LifeGoal Home Savings ETF (Fees: 0.39%)SUNY LifeGoal Vacation Savings ETF (Fees: 0.29%)WLTH LifeGoal Wealth Builder ETF (Fees: 0.47%)
SUMMARY & ANALYSIS
ETF veteran Brett Sohns filed for five ETFs. According to the filing, each ETF is designed to help investors achieve certain wealth building goals for specific major life events.
The stated investment objectives are very broad, but the stated investment strategies are not. It will be interesting to see how these ETFs reconcile the two in practice. For example, the Children Savings ETF's investment objective is Current Income and Capital Appreciation, which is consistent with its investment strategy's declaration of being designed to save for childcare and educational expenses. However, how does the fund address the specific needs of a particular investor at a specific point in time in his/her child-rearing lifecycle to fulfill this?
I guess these ETFs are consistent with the portfolio manager's background as an ETF wholesaler and also advisor, as it speaks to a broad swathe of the intermediary market in providing them the products that the advisors can sell to their clients.
HEARSAY ETF Product Success Three Pillars Analysis
1. Investment merit: Not succinct enough and too broad. Not well defined.
2. Commercial appeal: Yes
3. Operational viability: Yes
Bottom line: Will open doors to intermediaries' offices to start the conversation, but will require a robust support ecosystem to gather assets.
DETAILS
Effective date: June 28, 2021
Adviser: LifeGoal Investments, LLC - PM: Brett Sohns
Sub-Adviser: Penserra Capital Management LLC
Administrator: Gemini Fund Services, LLC
Fund accountant: Gemini Fund Services, LLC
Transfer agent: Brown Brothers Harriman & Co.
Custodian: Brown Brothers Harriman & Co.
Distributor: Northern Lights Distributors, LLC
Legal counsel: Alston & Bird, LLP
External accounting: TBD
Compliance: Northern Lights Distributors, LLC
The Children Savings Fund is designed to assist investors in saving for their children’s needs, including child care and educational expenses. The Children Savings Fund pursues an asset allocation strategy that is designed to balance growth and downside market protection through different market environments. The Children Savings Fund invests in a portfolio of fixed income securities, equity securities and commodity-linked instruments. Equity securities include common stock, preferred stock, or securities convertible into common stock and may be of issuers of any capitalization. Fixed income securities that the Children Savings Fund may buy include debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, and fixed income or debt securities of any kind, including, by way of example, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, by foreign governments or international agencies or supranational entities, or by domestic or foreign private issuers, debt securities convertible into equity securities and inflation-indexed bonds. The Children Savings Fund may invest in such equity and fixed income securities directly or indirectly by investing in both actively and passively managed mutual funds and exchange-traded funds (collectively, the “underlying funds”). The Children Savings Fund may also invest in investment vehicles such as exchange traded funds that invest exclusively in commodities and are designed to provide commodities exposure without direct investment in physical commodities. Additionally, the Children Savings Fund may also invest in Real Estate Investment Trusts (“REITs”) and securities related to real assets (like real estate- or precious metals-related securities) such as stock, bonds or convertible bonds issued by REITs or companies that mine precious metals as well as underlying funds holding precious metals.
Under normal market conditions, the Children Savings Fund will invest its assets within the following ranges: 50-95% of its assets in fixed income, 5-35% of its assets in equities, and 0-15% of its assets in commodities. The Adviser will allocate the Children Savings Fund’s assets among fixed income securities (including domestic, international and emerging markets, U.S. inflation-protected debt, and U.S. long-term treasuries) and equity securities (including domestic, international, and emerging markets equities) to manage the Fund’s risk across asset classes over time. The Children Savings Fund will typically invest 5 – 10% of its assets in securities of companies where child-related expenses may be expected to be spent including clothing companies, food distributors and entertainment companies.
Additionally, the Adviser may invest up to 40% of the Children Savings Fund’s assets in high yield debt securities (also referred to as junk bonds). The Adviser may also invest up to 50% of the Children Savings Fund’s assets in foreign securities and up to 40% of the Fund’s assets in emerging market securities.
The General Savings Fund is designed to assist investors with [general savings goals]. The General Savings Fund pursues an asset allocation strategy that is designed to balance growth and downside market protection through different market environments. The General Savings Fund invests in a portfolio of fixed income securities, equity securities and commodity-linked instruments. Equity securities include common stock, preferred stock, or securities convertible into common stock and may be of large and mid-capitalization companies. Fixed income securities that the General Savings Fund may buy include debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, and fixed income or debt securities of any kind, including, by way of example, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, by foreign governments or international agencies or supranational entities, or by domestic or foreign private issuers, debt securities convertible into equity securities and inflation-indexed bonds. The General Savings Fund may invest in such equity and fixed income securities directly or indirectly by investing in both actively and passively managed mutual funds and exchange-traded funds (collectively, the “underlying funds”). The General Savings Fund may also invest in investment vehicles such as exchange traded funds that invest exclusively in commodities and are designed to provide commodities exposure without direct investment in physical commodities.
Under normal market conditions, the General Savings Fund will invest its assets within the following ranges: 70-95% of its assets in fixed income, 0-15% of its assets in equities and 0-15% of its assets in commodities. The Adviser will allocate the General Savings Fund’s assets among fixed income securities (including domestic, international and emerging markets, U.S. inflation-protected debt, and U.S. long-term treasuries) and equity securities (including domestic, international, and emerging markets equities) to manage the Fund’s risk across asset classes over time.
The Adviser may invest up to 30% of the General Savings Fund’s assets in high yield debt securities (also referred to as junk bonds). The Adviser may also invest up to 50% of the General Savings Fund’s assets in foreign securities and up to 40% of the Fund’s assets in emerging market securities.
The Home Savings Fund is designed to assist investors in saving for a home down payment, mortgage or rent budget or general home-related expenses or costs. The Home Savings Fund pursues an asset allocation strategy that is designed to balance growth and downside market protection through different market environments. The Home Savings Fund invests in a portfolio of fixed income securities, equity securities and commodity-linked instruments. Equity securities include common stock, preferred stock, or securities convertible into common stock and may be of issuers of any capitalization. Fixed income securities that the Home Savings Fund may buy include debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, and fixed income or debt securities of any kind, including, by way of example, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, by foreign governments or international agencies or supranational entities, or by domestic or foreign private issuers, debt securities convertible into equity securities and inflation-indexed bonds. The Home Savings Fund may invest in such equity and fixed income securities directly or indirectly by investing in both actively and passively managed mutual funds and exchange-traded funds (collectively, the “underlying funds”). The Home Savings Fund may also invest in investment vehicles such as exchange traded funds that invest exclusively in commodities and are designed to provide commodities exposure without direct investment in physical commodities. Additionally, the Home Savings Fund may also invest in Real Estate Investment Trusts (“REITs”) and securities related to real assets (like real estate- or precious metals-related securities) such as stock, bonds or convertible bonds issued by REITs or companies that mine precious metals as well as underlying funds holding precious metals.
Under normal market conditions, the Home Savings Fund will invest its assets within the following ranges: 50-95% of its assets in fixed income, 5-35% of its assets in equities, and 0-15% of its assets in commodities. The Adviser will allocate the Home Savings Fund’s assets among fixed income securities (including domestic, international and emerging markets, U.S. inflation-protected debt, and U.S. long-term treasuries) and equity securities (including domestic, international, and emerging markets equities) to manage the Fund’s risk across asset classes over time. The Home Savings Fund will typically invest 5 – 10% of its assets in securities of companies in housing related industries including home furnishing companies, appliance companies, home builders and lumber companies.
The Adviser may invest up to 40% of the Home Savings Fund’s assets in high yield debt securities (also referred to as junk bonds). The Adviser may also invest up to 50% of the Home Savings Fund’s assets in foreign securities and up to 40% of the Fund’s assets in emerging market securities.
SUNY
The Vacation Savings Fund is designed to assist investors in saving for a future vacation. The Vacation Savings Fund pursues an asset allocation strategy that is designed to balance growth and downside market protection through different market environments. The Vacation Savings Fund invests in a portfolio of fixed income securities, equity securities and commodity-linked instruments. Equity securities include common stock, preferred stock, or securities convertible into common stock and may be of issuers of large and mid-capitalization companies. Fixed income securities that the Vacation Savings Fund may buy include debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, and fixed income or debt securities of any kind, including, by way of example, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, by foreign governments or international agencies or supranational entities, or by domestic or foreign private issuers, debt securities convertible into equity securities and inflation-indexed bonds. The Vacation Savings Fund may invest in such equity and fixed income securities directly or indirectly by investing in both actively and passively managed mutual funds and exchange-traded funds (collectively, the “underlying funds”). The Vacation Savings Fund may also invest in investment vehicles such as exchange traded funds that invest exclusively in commodities and are designed to provide commodities exposure without direct investment in physical commodities.
Under normal market conditions, the Vacation Savings Fund will invest its assets within the following ranges: 70-95% of its assets in fixed income, 0-15% of its assets in equities and 0-15% of its assets in commodities. The Adviser will allocate the Vacation Savings Fund’s assets among fixed income securities (including domestic, international and emerging markets, U.S. inflation-protected debt, and U.S. long-term treasuries) and equity securities (including domestic, international, and emerging markets equities) to manage the Fund’s risk across asset classes over time. The Vacation Savings Fund will typically invest 5 – 10% of its assets in securities of companies in travel and hospitality related industries including airlines, hotel and lodging companies and restaurants.
The Adviser may invest up to 30% of the Vacation Savings Fund’s assets in high yield debt securities (also referred to as junk bonds). The Adviser may also invest up to 50% of the Vacation Savings Fund’s assets in foreign securities and up to 40% of the Fund’s assets in emerging market securities.
WLTH
The Wealth Builder Fund invests in a portfolio of equity securities, debt securities and commodity-linked instruments. Equity securities include common stock, preferred stock, securities convertible into common stock, rights and warrants or securities or other instruments whose price is linked to the value of common stock. The Wealth Builder Fund may invest in such equity and fixed income securities directly or indirectly by investing in both actively and passively managed mutual funds and exchange-traded funds (collectively, the “underlying funds”). The Wealth Builder Fund may also in investment vehicles such as exchange traded funds that invest exclusively in commodities and are designed to provide commodities exposure without direct investment in physical commodities.
Under normal market conditions, the Wealth Builder Fund will invest its assets within the following ranges: 25-90% of its assets in equities, 5-50% of its assets in fixed income, and 0-15% of its assets in commodities. The Adviser regularly reviews the Wealth Builder Fund’s allocation and may make changes to favor investments that it believes will provide the most favorable outlook for achieving the Fund’s objective.
In selecting equity investments, the Wealth Builder Fund mainly seeks securities that the Adviser believes are undervalued. The Wealth Builder Fund may buy debt securities of varying maturities, debt securities paying a fixed or fluctuating rate of interest, and debt securities of any kind, including, by way of example, securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, by foreign governments or international agencies or supranational entities, or by domestic or foreign private issuers, debt securities convertible into equity securities, and inflation-indexed bonds. In addition, the Wealth Builder Fund may invest up to 50% of its total assets in “junk bonds,” corporate loans and distressed securities. The Wealth Builder Fund may also invest in Real Estate Investment Trusts (“REITs”) and securities related to real assets (like real estate- or precious metals-related securities) such as stock, bonds or convertible bonds issued by REITs or companies that mine precious metals.
When choosing investments, the Adviser considers various factors, including opportunities for equity or debt investments to increase in value, expected dividends and interest rates. The Wealth Builder Fund generally seeks diversification across markets, industries and issuers as one of its strategies to reduce volatility. The Wealth Builder Fund has no geographic limits on where it may invest. This flexibility allows the Adviser to look for investments in markets around the world, including emerging markets, that it believes will provide the best asset allocation to meet the Wealth Builder Fund’s objective. The Wealth Builder Fund may invest in the securities of companies of any market capitalization.
Generally, the Wealth Builder Fund may invest in the securities of corporate and governmental issuers located anywhere in the world. The Fund may emphasize foreign securities when the Adviser expects these investments to outperform U.S. securities. When choosing investment markets, the Adviser considers various factors, including economic and political conditions, potential for economic growth and possible changes in currency exchange rates. The Wealth Builder Fund may own foreign cash equivalents or foreign bank deposits as part of the Fund’s investment strategy.
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