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Posted by on Aug 3, 2013 in Active Management, AdvisorShares, AthenaInvest

Using Behavioral Factors to Hedge International Stock Portfolios

Using Behavioral Factors to Hedge International Stock Portfolios

C. Thomas Howard, PhD CEO and Director of Research of AthenaInvest, Inc. and Portfolio Manager of the AdvisorShares Athena International Bear ETF (HDGI) published an interesting White Paper available on InvestmentNews.com, “Using Behavioral Factors to Hedge International Stock Portfolios.”

Here’s an excerpt:

There is considerable evidence showing that stock picking skill is common among active equity mutual funds. It is also the case that managers reveal their best idea stocks by means of relative portfolio weights, which in turn can be aggregated across funds in order to create superior portfolios. What is less obvious is how it is possible to build underperforming portfolios, using this same information for identifying low conviction stocks held by closet indexers. Underperforming portfolios are of interest in populating the short side of a long-short portfolio or a short only portfolio that can be used for tactical and hedging purposes.

The AlphaBaskets blog provides frequent market insight and commentary by AdvisorShares Investments, LLC, created by AdvisorShares and other leading active managers.  AdvisorShares Investments is an SEC-registered investment adviser and the investment adviser to the AdvisorShares actively managed ETFs. The views expressed on AlphaBaskets should not be taken as investment advice or a recommendation for any of the actively managed ETFs advised by AdvisorShares.

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