AdvisorShares launched the Cambria Global Tactial ETF (NYSE:GTAA) just early last week and has already seen it gain strong traction amongst investors with the fund accumulating more than $17 million in assets in 1 week. Trading volume in GTAA also exceeded 100,000 shares on Nov 1st. The fund is managed by Cambria Investment Management, with portfolio managers Mebane Faber and Eric Richardson making day-to-day portfolio decisions. Faber is known for being the author of the book “The Ivy Portfolio” and the portfolio is managed to strategies similar to those discussed in the book. After its first week in the markets, GTAA’s biggest holdings were the SPDR Dow Jones International Real Estate ETF (NYSE:RWX), Vanguard Emerging Market ETF (NYSE:VWO) and iShares MSCI EAFE Small Cap Index (NYSE:SCZ) with each getting a 5% allocation. Other ETFs were also held in very similar sizes, with weightings generally ranging between 4-5% each. The total cost that investors pay for these underlying ETFs is 30 basis points, which is included in the total net expense ratio of 1.35%.
AdvisorShares also announced through a press release on Oct 28th that its long planned Peritus High Yield ETF (NYSE:HYLD) will launch by December 3rd this year. HYLD will be the first actively-managed ETF to focus on the junk bond sector and it will be managed by Santa Barbara based Peritus Asset Management. The fund will look to target investors on the lookout for higher yields in their portfolio. AdvisorShares’ CEO, Noah Hamman, adds, “Peritus has an established track record managing high yield bonds. More importantly they have extensive high yield bond trading experience and the relationships to find the best opportunities. We believe that the high yield asset class is one which is best served through active management”. AdvisorShares had first announced plans for the Peritus High Yield ETF back in February of this year.
Finally, last week, AdvisorShares filed an amended prospectus for the existing Dent Tactical ETF (NYSE:DENT). The modified prospectus detailed a new expense structure for the actively-managed ETF. Effective October 28th, DENT’s net expense ratio will now be restricted to 1.50%, compared to an expense ratio of 1.56% previously. The management fee to the sub-advisors remains the same at 0.95%, however the “Other Expenses” for the fund have increased to 1.04% from 0.44%. The “Other Expenses” line item is usually made up of operational expenses and other charges related to running the fund on an ongoing basis. As a result of this increase, the total operating expense for DENT is now 2.45%. However, a contractually agreed upon fee waiver of 0.95% has been put in place that will reduce the net expense ratio for investors to 1.50% and the agreement is in place till at least October 31, 2011.
AdvisorShares now has 4 actively-managed ETFs on the market, with the largest one of them being the Mars Hill Global Relative Value (NYSE:GRV), a long-short fund that saw a surge in assets, similar to what GTAA is experiencing, upon its launch in July. AdvisorShares has 3 other Active ETFs under filing with the SEC, two of them in collaboration with Strategic Income Management (SiM) and another with Ranger Alternative Management.
Written By Shishir Nigam from ActiveETFs | InFocus Disclosure: No positions in above-mentioned names.
Shishir Nigam is the founder of ActiveETFs | InFocus (http://www.etfshub.com/), which provides extensive coverage and analysis of actively-managed ETFs in US and Canada, including debates on major industry trends, insights on the latest product launches from issuers in the Active ETF space as well as in-depth interviews with industry executives and thought leaders.
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