Alpha Is Difficult To Achieve But Not Hard To Find

AdvisorsharesAlpha may be difficult to achieve but it is not hard to find as investors navigate opportunities for better risk-adjusted returns in any market environment. AdvisorShares, a leading provider of actively managed exchange-traded funds (ETFs) with over $1 billion assets under management, has exhibited that alpha is readily available to investors through a transparent, liquid, and efficient ETF vehicle.

Per the Investment Company Institute (ICI), there is over $13 trillion in U.S. mutual fund assets of which 83% is actively managed.[1]  While active management critics often cite that a low percentage of active funds outperform their passive benchmark, the reality is that a significant number of active funds can provide better risk-adjusted returns than an index-based investment. For investors and financial advisors seeking to add alpha to their portfolios and client accounts, there is another solution. Actively managed ETFs provide both investment innovation as well as a similar growth pattern to index-based ETFs:

  • When comparing the first five full years of both actively managed ETFs (2008-2012) and index-based ETFs (1993-1997), actively managed ETFs have both a higher number of funds trading (43) and greater total net assets ($10.133 billion) than index-based ETFs (19 funds trading and $6.707 billion total net assets)[2]
  • In 2013, McKinsey and Company projected that actively managed ETFs will reach $500 billion total net assets by 2020,[3] during their 13th year of trading
  • Index-based ETFs finished their 13th full year of trading in 2005 with $296.022 billion total net assets; index-based ETFs crossed $500 billion total net assets in 2007, during their 15th year of trading[4]

“We look forward in continuing to provide actively managed investment solutions, not only with our current line-up of active ETFs, but also with additional compelling strategies coming from innovative managers,” said Noah Hamman, chief executive officer of AdvisorShares. “As actively managed ETFs continue to establish track records and eventually obtain their Morningstar ratings for 3-year and 5-year performances, we believe that investors and financial advisors will steadily become more comfortable allocating their investment dollars and client assets to active ETF strategies.  Much like how index-based ETFs brought forth new investing technology during the mid-1990s, actively managed ETFs currently possess the trajectory to follow a similar path. AdvisorShares looks forward to the road ahead in providing our current and future shareholders with the risk adjusted returns they seek for their investment goals.”

Positive Alpha Delivered to Shareholders

In addition to the AdvisorShares actively managed ETFs that have outperformed their benchmarks on a relative basis, the following actively managed ETFs have provided positive alpha and better risk adjusted returns than their benchmarks since inception (as of 10/31/2013).  For actual performance data and fund expenses, please refer to the Core ETF Strategies Performance Report and the Alternative ETF Strategies Performance Report located at

Core Strategy – Domestic Equity
AdvisorShares TrimTabs Float Shrink ETF (NYSE Arca: TTFS)

Core Strategy – International Equity
AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (NYSE Arca: AADR)

Core Strategy – Income
AdvisorShares Peritus High Yield ETF (NYSE Arca: HYLD)
AdvisorShares Madrona Global Bond ETF (NYSE Arca: FWDB)
AdvisorShares Newfleet Multi-Sector Income ETF (NYSE Arca: MINC)

Alternative Strategy – Multi-Asset
AdvisorShares Meidell Tactical Advantage ETF (NYSE Arca: MATH)

To request more information on AdvisorShares, please contact Ryan Graham at 202-684-6442 or [email protected].  For financial professionals and investors requesting more information, please visit or call the AdvisorShares Investment Consultant Team at 1-877-THE-ETF1 (1-877-843-3831).

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