4 New Funds on Our Radar

Morningstar Manager Research’s latest list of overlooked or emerging fund managers and strategies includes additions from industry standouts John Hancock and Parnassus.

In our latest report, we added six strategies that impressed us with their unique processes and strong management teams. After further review, we graduated four strategies to full coverage either because of solid management or standout processes, and we also dropped six strategies.

Below, we look at two active exchange-traded funds and two small-cap-focused strategies from the six strategies that were added to the July 2025 Morningstar Prospects List.

PGIM AAA CLO ETF PAAA

This strategy is not a one-man show. PGIM’s head of securitized investing, Edwin Wilches, leads a robust investment team that specializes in collateralized loan obligations, which are actively managed, diversified pools of non-investment-grade bank loans.

This team analyzes not only CLO’s underlying collateral—in this case, mostly syndicated loans—but also the CLO managers themselves. The depth of PGIM equips them well to do both. PGIM’s unique position as a leading issuer of CLOs also gives it extensive insight into the market. In addition, the firm’s commitment to risk management inspires confidence.

This ETF has made a splash since debuting in 2023. Its 7.36% annualized gain from August 2023, its first full month, through May 2025 bested nearly all the similar ETFs in the ultrashort bond Morningstar Category.

Parnassus Core Select ETF PRCS

The same seasoned management team that runs the firm’s flagship mutual fund, Parnassus Core Equity, runs this strategy. Todd Ahlsten and Ben Allen have more than 24 and 13 years of experience, respectively, on that fund. Firm up-and-comer, Andrew Choi, who has more than 12 years of experience, joins them at Parnassus Core Select.

This ETF is a more compact and nondiversified version of the Core Equity mutual fund. The managers employ a high-quality approach focused on economic moats, management teams, and environmental, social, and governance-focused risks. The managers pick roughly 25 of the mutual fund’s 40 holdings for this ETF.

This ETF follows a similar approach to Parnassus’ flagship mutual fund offering, which has posted solid risk-adjusted results since Ahlsten’s 2001 start. Its quality focus could take the edge off some downturns, but it will likely be more volatile than its older sibling owing to its concentration.

Hood River New Opportunities HRNOX

The co-founders of Hood River Asset Management, Brian Smoluch and David Swank, have run this strategy’s separately managed account since its January 2015 inception. They have compiled an impressive track record at Hood River New Opportunities and at their small-cap-focused strategy, Hood River Small Cap Growth. Five analysts support them.

This strategy is an extension of Hood River Small Cap Growth. The managers aim to find a mix of small- and mid-cap companies whose shares the managers believe can appreciate by more than 15% over the next 12 months. Smoluch and Swank want companies that have strong cash flows, durable advantages, and strong management teams. They also prefer firms that get little attention from sell-side research analysts; they believe they can exploit gaps between the markets and their estimate of the fair values of company shares.

JHancock Small Cap Dynamic Growth JSJIX

This strategy’s managers have more experience than it seems—while subadvisor Axiom Investors took it over in 2023, managers Matt Franco and David Kim have run the strategy this fund now employs since 2006. Franco and Kim also collaborate with Axiom’s founder, Andrew Jacobson, and the firm’s analyst team.

JHancock Small Cap Dynamic Growth shares its philosophy, process, and much of its team with John Hancock International Dynamic Growth, which earns Above Average People and Process Pillar ratings. The team searches for companies whose operations and competitive advantages are improving but also considers their valuations and growth prospects. Momentum plays a key role in the strategy’s performance, but the firm tries to rely on deep research to know when momentum is growing or slowing.

The strategy’s long-term performance has been strong, and its small asset base gives this small-cap strategy room to grow without hindering its process.