AdvisorShares, a leading sponsor of actively managed exchange-traded funds (ETFs), announced today that the AdvisorShares Peritus High Yield ETF (NYSEARCA:HYLD) has been recognized with a 5-Star Morningstar Rating™ for both its 3-year and overall risk-adjusted performances, respectively, from inception through December 31, 2013, out of four ETFs in the high yield bond category.1 HYLD is managed by Santa Barbara, Calif.-based Peritus Asset Management, a value-based active credit manager that specializes in fixed income opportunities in the corporate bond and loan market with a focus on the non-investment grade asset class.
Morningstar compares each ETF’s risk-adjusted return, with at least a 3-year history, to the open-end mutual fund rating breakpoints for the High Yield Bond category. Consistent with the open-end mutual fund ratings, HYLD earned its 5-star ranking as being in the top 10% of funds – that includes both ETFs and mutual funds – in the High Yield Bond category.
HYLD seeks to generate a high, tangible current income provided primarily by non-investment grade corporate debt securities with a secondary goal of capital appreciation. With valuation and fundamental analysis an essential component of their strategy, Peritus’ portfolio management team takes an active credit approach and concentrates only on the securities they feel offer the best value with the least risk within the company’s entire capital structure. Since HYLD largely focuses on seasoned credits and is able to include floating rate loans as a component in the portfolio, its stated duration and maturity tends to be shorter than that of the market indexes, while its actual duration is generally even shorter due to early re-financings and take-outs via calls, poison puts, and tenders. HYLD’s active management allows maneuverability to identify securities that the portfolio manager sees as the best opportunities within the high yield space and helps consistently exploit benchmark inefficiencies and deliver alpha for shareholders.
“We are pleased to offer an actively managed ETF with a 5-Star Morningstar Rating™ within a growing and robust marketplace,” said Noah Hamman, chief executive officer of AdvisorShares. “This recognition is a testament to Peritus’ outstanding portfolio management and as well as that active management in ETFs not only works, but has worked exceptionally well. Representative of the entire AdvisorShares actively managed ETF suite, HYLD exhibits how investors and financial advisors may potentially benefit from a transparent, liquid and efficient solution for their investment goals.”
“We appreciate Morningstar’s 5-star recognition of HYLD and believe this acknowledgment reinforces that active management is essential in the high yield market,” said Tim Gramatovich, chief investment officer of Peritus. “Our extensive expertise in navigating the credit markets for attractive high yield opportunities, along with the ability to be selective in our investment process and not subject to issuance size restrictions faced by index-based products, we feel not only puts us at an advantage, but most importantly benefits our shareholders.”