Promising New ETFs - TCAF, BINC, CVLC

[yogibearbull]

TCAF (Giroux) & BINC (Rieder) are familiar to posters here.

ESG is going out of fashion, or just going quiet, but M* has a big bet on it through its ownership of ESG rating firm Sustainalytics. So, without any hint of this "conflict", M* is trying to keep the ESG flame alive by including CVLC.

www.morningstar.com/etfs/3-best-new-etfs-2023

[anitya]

I did not know TCAF has a low (10%) turnover goal. Is the author making this up or did Grouix publicly disclose so? am apprehensive of ETFs with turnover goals.  Since we discussed last time, I started TCAF.

[yogibearbull]

There is no mention of any turnover limits in TCAF prospectus - it (and M*) show turnover as N/A for this new fund (o6/2023- ). May be M* based 10% figure on some conversations with the fund?
www.sec.gov/ix?doc=/Archives/edgar/data/1795351/000174177323000901/c485bpos.htm

[anitya]

It is unlikely any issuer would put such a thing in the prospectus, unless they think it is a differentiator to market. Giroux does not give too many interviews but I remember there is at least one where he discussed TCAF in a differentiating way from the equity sleeve in PRWCX. I will find that interview and re-listen for any clues on this 10% turnover goal / proposition.

Edit:

www.morningstar.com/financial-advice/david-giroux-i-want-look-forward-not-backward

Please share any other Giroux interviews mentioning TCAF.  

[Norbert]

From the M* article; link helpfully provided by anitya:


How the ETF will differ from PRWCX:

"For starters, the ETF’s equity-only focus means Giroux’s ability to make swift and sizable moves across asset classes, an area where he’s captured meaningful value over short periods, isn’t applicable.

"1) To reduce capital gains, the ETF is expected to trade in and out of names less often and have longer holding periods on average. The ETF’s annual turnover ratio is expected to be around 10%, significantly lower than the roughly 50% average for the mutual fund’s equity sleeve.

"2) Further emphasizing tax efficiency, the ETF aims for a slightly lower dividend yield than the S&P 500 to help limit taxable income distributions."

[anitya]

Norbert ,

Thanks.

Below is the link to the text you quoted. This is just a write up from M* and different from the link in my earlier post, which was an actual interview with Giroux talking about TCAF.

www.morningstar.com/etfs/top-mutual-fund-manager-now-runs-promising-new-active-etf

Though the author is different from the link in the OP, they probably copy from each other and may not be treated as separately independent research.

[anitya]

Nov 8, 2023 20:20:07 GMT anitya said:

It is unlikely any issuer would put such a thing in the prospectus, unless they think it is a differentiator to market. Giroux does not give too many interviews but I remember there is at least one where he discussed TCAF in a differentiating way from the equity sleeve in PRWCX. I will find that interview and re-listen for any clues on this 10% turnover goal / proposition.

Edit:

www.morningstar.com/financial-advice/david-giroux-i-want-look-forward-not-backward

OK. About 40% into the interview, there is a Benz question ending in “capacity”. Read the Giroux answer to that question and the next couple of Q&A.  He does mention about expecting to distribute almost no Cap Gains and a turnover of 5 to 15% in TCAF (vs 40-50% for equity sleeve of PRWCX).  He appears very vague on why he is so focused on turnover to minimize cap gain distribution, given this is an ETF.  But he makes it very clear that his priority is PRWCX (an $80B strategy) and TCAF is secondary. 

His semi obsession on low turnover makes me not want to add anymore to TCAF.