CrossingBridge was recently named “Best Fixed Income Small Fund Family Group” at the 2025 U.S. LSEG Lipper Fund Awards Ceremony. As of February 28, 2025, CrossingBridge managed over $3.6 billion, specializing in investment grade & high-yield corporate debt with an emphasis on ultra-short & low-duration strategies as well as credit opportunities. The Firm’s core philosophy is “Return of Capital is more important than Return on Capital”. The accompanying picture on their website is very calming.
While MFO has not gotten to the point of sponsoring an award (much less a fancy-dansy awards banquet), we do recognize funds that excel with unusual consistency. Designated as “Great Owl” funds, they have top 20% risk-adjusted returns, based on the Martin Ratio, in its category for evaluation periods of 3, 5, 10, and 20 years, as applicable. Every CrossingBridge or CrossingBridge-advised fund with a record of at least three years has earned the Great Owl designation. That is a record unmatched in the industry.
NRDCX launched in the fall of 2024 and so does not have a long enough track record to qualify as a Great Owl.
Our congratulations to founder David Sherman and crew and to his investors.
Rewriting the rules to deal with market concentration: Cap-weighted indexes are basically momentum plays; they pour more resources into whatever stocks have been doing well lately. And, if the passive strategies are big enough, the momentum becomes self-sustaining. Investors throw their money at a hot name, forcing index funds to throw their money at the same hot name, making it hotter still and forcing more index concentration. Schwab is confronting the fallout by capping the degree to which two of their large-cap index funds can become concentrated. Going forward, Schwab U.S. Large-Cap Growth Index Fund and Schwab U.S. Large-Cap Value Index Fund, which each seek “to provide a comprehensive and unbiased barometer” of their sector, will now operate under two new constraints:
- Collectively, companies that have a weight greater than 4.5% in aggregate may compose no more than 45% of the index, and
- No individual company in the index may have a weight greater than 22.5% of the index.
The first restriction targets “Mag 7” sorts of companies; at base, the Mag 7 can’t occupy more than 45% of the portfolio. The second restriction targets, though weakly, ultra-cap companies like Apple that threaten to envelop the entire index.
Vanguard filed an unusual warning for investors, flagging the possible impacts of “certain large redemptions.”
Potential redemption activity impacts. Vanguard funds can be negatively impacted by certain large redemptions. These redemptions could occur due to a single shareholder or multiple shareholders deciding to sell a large quantity of shares of a fund or a share class of the fund.
The first fund listed on the filing was the FTSE Social Index Fund, but the others included both sector funds (Materials Index Fund), money markets, and broadly diversified ones (Global Wellesley Income).
Small Wins for Investors
Chestnut Street Exchange Fund, which has been closed for numerous years, is being reorganized into the SGI Enhanced Market Leaders ETF. Total Annual Fund Operating Expenses will increase slightly to .50% after the reorganization; the fund expense was .48% prior to the reorganization. The closing date will be decided once the vote is approved.
Hartford Schroders Emerging Markets Equity Fund will be reopening to new investors on April 14th.
Effective April 1, 2025, JPMorgan Emerging Markets Equity Fund will reopen to new investors.
T Rowe Price Capital Appreciation Premium Income and Hedged Equity ETFs became available on March 27th.
Effective April 1, 2025, the cap on expenses for WCM Focused International Opportunities Fund decreased by 25 bps for both the Investor (new cap: 1.25%) and Institutional (new cap: 1.00%) shares.
Launches and Conversions
On March 28, 2025, Cambria Investment Management launched the Cambria Fixed Income Trend ETF. It’s a quantitative global fixed-income fund. Within the “fixed income” realm, its investible universe is unconstrained: from Treasury bonds to private credit and convertibles, it can go pretty much anywhere. Rather than maintain a static allocation, the manager moves assets toward market segments that are rising and moves toward T-bills when the market is falling. The fund charges 0.71%.
Grandeur Peak International Contrarian Fund is in registration. The fund will invest primarily in foreign small- and micro-cap companies; it will be managed by the Grandeur Peak investment team, with primary responsibility assigned to Blake Walker. Total annual fund operating expenses are stated at 1.35%. Its sibling Contrarian fund has a fine record but has just lost its lead manager, with Mr. Walker serving as a placeholder until Robert Gardiner’s July return. We’re counseling caution just now until we get a better sense of whether Mr. Gardiner’s return will revive the firm’s fortunes.
Vanguard Multi-Sector Income Bond ETF is in registration. The fund invests in a variety of fixed-income securities that are high-quality, medium-quality, and lower-quality bonds (commonly known as “junk bonds”) across several fixed-income sectors. Portfolio managers will be Michael Chang, CFA, Arvind Narayanan, CFA, and Daniel Shaykevich. Total annual fund operating expenses have been stated at .30% for the institutional share class and .45% for the investor share class.
On March 27, 2025, Westwood Investment Management launched LBRTY Global Equity ETF. Inspired by the performance and marketing success of the Freedom 100 Emerging Equity ETF, which has a five-star rating and a billion in assets, the Westwood ETF tracks the TOBAM LBRTY All World Equity Index, which eliminates direct exposure to authoritarian regimes and reduces indirect exposure by favoring companies that don’t themselves rely on resources from, or sales in, autocratic nations. (Go ahead. Take a second. Make the snarky comment that popped into your head. We’ll wait for you.) The initial portfolio holds about 200 stocks with US tech companies (Microsoft, Nvidia, Apple, Amazon, Meta) accounting for about 20% of the portfolio. The fund charges 0.50%. The TOBAM folks shared the following info about the underlying index:
Old Wine in New Bottles
Effective March 21, 2025, the SPDR SSGA Apollo IG Public & Private Credit ETF was renamed the SPDR SSGA IG Public & Private Credit ETF.
Effective April 21, 2025, Aspiration Redwood Fund will change to GreenFi Redwood Fund as the Aspiration Funds are rechristened GreenFi Funds Trust.
STF Tactical Growth & Income ETF and STF Tactical Growth ETF are being reorganized into the Hennessy Funds. Each fund will have the same investment objective, principal investment strategies, principal risks, and policies as its corresponding Fund. Jonathan Molchan, a current co-portfolio manager for each fund, will continue to serve as portfolio manager after the reorganization.
Effective April 30, 2025, WisdomTree Dynamic Currency Hedged International Equity Fund becomes WisdomTree Dynamic International Equity Fund, while WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund becomes WisdomTree Dynamic International SmallCap Equity Fund. The funds will track new indexes that do not rely on currency hedging.
Off to the dustbin of history …
American Century Emerging Markets Small Cap Fund will be liquidated on or about May 29.
On or about May 30, 2025, the entire 1290 Retirement series of target date funds will be liquidated: 2020 through 2055.
FS Chiron Capital Allocation Fund and FS Chiron Real Development Fund will be liquidated on April 21, 2025.
Harding, Loevner Emerging Markets Portfolio is slated to merge into the Harding Loevner Institutional Emerging Markets Portfolio, which will then be renamed Harding Loevner Emerging Markets Portfolio. (Because right after I eat the chili cheese dog, I become the chili cheese dog.) The merger and re-renaming will occur on June 30, 2025… so long as one sticky detail is worked out “The Acquired Portfolio holds sanctioned Russian securities (and proceeds of distributions in respect of Russian securities that are similarly subject to sanctions).” So the Trump administration, through the IRS, needs to nod beneficently for the reorganization to proceed.
Effective March 14, 2025, the MassMutual Emerging Markets Debt Blended Total Return Fund was dissolved.
Macquarie Global Allocation Fund will be reorganized into the Macquarie Balanced Fund on or about June 27th.
Mirova Global Green Bond Fund is turning brown and will be liquidated on or about June 25th.
Morgan Stanley Mortgage Securities Trust is being reorganized into the Eaton Vance Mortgage Opportunities ETF. The reorganization will occur on or about August 1, 2025.
Nuveen Mid Cap Value 1 Fund did not receive approval to be reorganized into the Nuveen Mid Cap Value Fund. The Board will review and take such action as it deems to be in the best interests of the Fund, including liquidation since the reorganization was not approved.
Parnassus Fixed Income Fund will be liquidated on or about April 30th.
Robinson Alternative Yield Pre-Merger SPAC ETF will be liquidated and terminated soon.
Victory RS Small Cap Equity Fund will be liquidated on or about April 29th.
West Loop Realty Fund will be liquidated on or about April 18th.
