manager for the “Meidell Tactical” ETF. These additions bring the number of actively managed ETF listings to 40. Despite the high level of interest, actively managed ETFs still face numerous obstacles.
The three Madrona Forward ETFs were launched 6/21/11 (press release) and are managed by Brian Evans, Robert Bauer, and Kristi Henderson. All three members of the portfolio management team are CPAs whose investment approach is more fully described in the Forward-Looking Broad-Market Investing White Paper (pdf). Further information is below and in the Madrona Prospectus (pdf).
The AdvisorShares Meidell Tactical Advantage ETF (NYSE:MATH), launched 6/23/11 (press release), will be managed by Laif Meidell of American Wealth Management. The MATH strategy, based on a combination of relative strength and moving averages, tries to increase exposure to stronger areas of the market and shift to defensive positions when markets decline. The new ETF is described below (following the three Madrona Forward ETFs).
AdvisorShares Madrona Forward Domestic ETF (NYSE:FWDD) seeks to provide long-term capital appreciation above the S&P 500 Index by selecting a portfolio of up to 500 of the largest U.S. traded equity securities. It uses a weighted allocation system based on consensus analyst estimates of the present value of future expected earnings relative to the share price of each security.
The largest sector allocations are Consumer Discretionary 19%, Technology 17%, and Financials 15%. FWDD currently holds about 480 stocks, all with allocations of less than 0.5% each. The expense ratio estimate is 1.12% with a 1.25% cap. Additional data is located in FWDD overview and FWDD fact sheet (pdf).
AdvisorShares Madrona Forward International ETF (NYSE:FWDI) seeks to provide long-term capital appreciation above the MSCI EAFE Index and the BNY Mellon Classic ADR Index by selecting a portfolio primarily composed of at least 250 of the largest American Depositary Receipts (ADRs) from EAFE countries, Canada, and emerging markets.
FWDI currently has about 76% exposure to developed markets and 24% to emerging markets. Regional allocations include Europe 50%, Pacific/Asia 40%, Americas 6%, and Africa/Middle East 4%. FWDI presently holds about 260 stocks and ADRs, all with allocations of less than 0.8%. The expense ratio estimate is 1.12% with a 1.25% cap. Additional data is located in the FWDI overview and FWDI fact sheet (pdf).
AdvisorShares Madrona Forward Global Bond (FWDB) seeks investment results that exceed the price and yield performance of the Barclays Capital Aggregate Bond Index by selecting a diversified portfolio of fixed income, currency, and commodity pool exchange-traded products (ETPs). FWDB uses a “fund of funds” approach and invests in at least 12 distinct global bond classes. The manager uses a weighted allocation system based on historic yield curve analysis and a mean reversion strategy.
FWDB currently holds 16 ETFs with the largest allocations going to iShares iBoxx $ Investment Grade Corporate Bond (NYSE:LQD) 18.1%, Vanguard Mortgage Backed Securities ETF (NYSE:VMBS) 14.1%, iShares iBoxx $ High Yield Corporate Bond (NYSE:HYG) 13.2%, PowerShares International Corporate Bond (NYSE:PICB) 8.0%, and Vanguard Intermediate-Term Government Bond ETF (NYSE:VGIT) 5.0%. The expense ratio is capped at 1.15% assuming the acquired fund fees do not exceed 0.20%. Additional data is located in the FWDB overview and FWDB fact sheet (pdf).
AdvisorShares Meidell Tactical Advantage ETF (NYSE:MATH) seeks to provide long-term capital appreciation and capital preservation with a strategy that can dynamically rebalance the portfolio from as much as 100% equity assets to 100% fixed income assets or cash, depending on market trends. MATH is a “fund-of-funds” that seeks to minimize portfolio losses by rotating out of higher volatility assets and into lower volatility asset classes.
MATH is currently in a defensive posture with a Fixed Income allocation of 57%, Cash 14%, US Equities 24%, and Commodities 4%. The fund has 17 holdings with the largest being Cash 14.1%, SPDR Barclays TIPS ETF (NYSE:IPE) 9.6%, iShares Barclays TIPS Fund (NYSE:TIP) 9.6%, Vanguard Intermediate-Term Bond ETF (NYSE:BIV) 4.8%, and iShares S&P Small Cap 600 Index Fund (NYSE:IJR) 4.8%. The gross expense ratio is 2.20% but will be capped at 1.60%. Additional data is located in the MATH overview, MATH fact sheet (pdf), and the MATH Prospectus (pdf).
Written By Ron Rowland From Invest With An Edge No positions in any of the securities mentioned.
Ron Rowland is the founder of Invest With An Edge and serves as the Executive Editor. He is also editor of AllStarInvestor.com and Chief Investment Officer of Capital Cities Asset Management (www.ccam.com). Quoted widely in the financial media, Ron is the industry go-to guy for sector rotation insight and investment strategies using ETFs and mutual funds.