For the week of June 10 – June 14

Stock Markets

The major indexes finished lower after experienced another volatile week.  While no major statements came out of the Federal Reserve, speculation about what the Fed chairman might after say its next meeting ends on June 19 drove a lot of market price movements early in the week.  Worries that the Fed was close to ending its aggressive bond buying program, drove markets lower on Tuesday and Wednesday.  On Thursday, markets rallied after jobless claims fell to 334,000 and May retail sales rose 0.6%.  In addition, auto sales rose 1.8% making it the largest gain since November 2012.  While these data points may convince the Fed that it can safely scale back its aggressive monetary policy, investors seemed to now be favoring good economic numbers over news that will cause the Fed to keep its foot on the gas.  On Friday, markets reacted negatively when the Thomson Reuters/University of Michigan consumer sentiment index fell for June, after reaching a six year high in May.  The Japanese market continued to be a cause of concern for investors worldwide, it had another volatile week and on Thursday the Nikkei declined 6.4% as the government’s pace and scope of economic reform failed to impress investors.

Bond Markets

US Treasury prices rose last week, in a sign that fixed income investors are becoming more confident that after it meeting ends on June 19, the Fed will announce that it plans to extend its aggressive monetary stimulus in attempt to halt a recent rise in long term rates.  While prices for Treasury inflation protected securities and municipal bonds fell, agency mortgage-backed securities rose in price after being out of favor for a while.  High yield bonds continued to fall in price.  While there has been no across the board weakening in fundamentals for companies issuing high yield debt, higher risk bonds have fallen out of favor and high yield bonds funds have faced large redemptions in the past few weeks.  Emerging market debt has also been hurt by increasing risk aversion, as well as continuing protests in Turkey.

Sources:

 *Indexes are from Reuters and Yahoo! Finance 4pm closing data

*Gold prices are from EcoWin and J.P. Morgan Asset Management

*Treasury rates are from Bloomberg.com

*Municipal and high yield rates are from Barclays Capital

*30 year mortgage rate comes from the Mortgage Bankers Association (MBA)

Past performance is not indicative of future results.

 This document should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any products mentioned.  This document has been prepared without regard to the individual financial circumstances and objective of persons who received it.  The securities discussed in this document may not be suitable for all investors.

This material was compiled by AdvisorShares based on publically available data.  AdvisorShares makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to such data.

AdvisorShares® is a registered trademark of AdvisorShares Investments, LLC. The trademarks and service marks contained herein are the property of their respective owners.

Follow the AdvisorShares Team on Twitter at www.twitter.com/advisorshares and

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For more information, call AdvisorShares at 1-877-THE ETF1 (1-877-843-3831)

or visit www.advisorshares.com

Sharing some commentary from our friends at TrimTabs, which summarizes a few changes in the investment landscape that may give you an indication of what to expect following May’s “sell in May and go away” trading adage. TrimTabs research focuses on fund flows and float shrink.  They believe the market is heavily influenced by what people and institutions are doing with their dollars.  You can read more about the research behind float shrink at AdvisorShares.com.

The S&P 500 Index rose 2.10% in May 2013, its seventh consecutive monthly gain.  While “sell in May and go away” has not worked well so far this year, what should investors expect for June?  We do not try to do short-term market timing at TrimTabs, but historical data helps put the situation into perspective.  Since 1950, the S&P 500 Index has risen in seven consecutive months 14 times, or roughly once every 4.5 years.  Eight-month rallies occurred eight times (the last ended in January 2007). On the other hand, declines in consecutive months are far rarer.  Since 1950, the S&P 500 Index fell for seven straight months only once.

Although the S&P 500 Index is up 14.34% so far this year (as of 5/31/13), investors have reasons to remain positive on stocks.  Inflows into equity mutual funds and ETFs reached $154.4 billion in the past five months, the strongest buying since 2007.  Corporate balance sheets are in much better shape than they were in 2007, as companies are sitting on record amounts of cash.  In addition, inflation remains minimal.  Consumer price inflation in the U.S., Europe, and Japan trended lower in recent months.

Equity investors should pay attention to a few changes to the investment landscape.  First, the volatility of low volatility stock strategies is now higher than for the benchmark (the 30-day volatility of the S&P 500 Low Volatility Index was 10.59% in May versus 9.22% for the S&P 500 Index).  Low volatility strategies attracted huge inflows in the past few years.  In a correction, investors who piled into these strategies may be unpleasantly surprised.  These strategies typically assume volatility is stable, but in reality, a low volatility strategy’s volatility relative to that of a benchmark is almost certain to change.

Second, dividend-paying stocks have fallen out of favor.  Several major dividend stock indices sold off hard in May.  Investors have been fleeing stocks with higher yields as bond yields back up.

Third, the tradable equity float (measured using the float of the Russell 3000 Index) expanded 0.54% year-on-year in May, up from 0.17% year-over-year in April.  The equity float is increasing for the first time in two years.  All else being equal, if the same amount of money chases fewer shares, the share price increases.  New share issuance ultimately dilutes the value of existing shares, and companies and insiders are taking advantage of current stock prices level to sell.  Since 2009, the float has expanded only 2.23%, down from 19.68% from 2003 to 2007.  Limited float growth is vital to the current bull market.  Investors should turn more cautious if float expansion accelerates.

Dividend yields have lost much of their allure as a predictor of equity returns because companies have changed their payout practices.  For example, S&P 500 companies distribute only 40% of their total payout as dividends.  The rest is paid out through share buybacks.

Since corporate America is sitting on a record amount of cash, a “total payout” approach makes more sense than a dividend-only focus.  There are many high dividend strategies investors can pair with the fund to build the core of a “total payout” portfolio.  Mostly importantly, we select stocks based on float reduction, not just stock buybacks.

 Definitions

The S&P 500 Index is a free-float capitalization-weighted index based on the common stock prices of 500 American companies. It is one of the most commonly followed equity indices and many consider it the best representation of the market and a bellwether for the U.S. economy.

Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.

The S&P 500 Low Volatility Index measures the performance of the 100 least volatile stocks in the S&P 500. The index is designed to serve as a benchmark for low volatility or low variance strategies in the U.S. stock market. Constituents are weighted relative to the inverse of their corresponding volatility, with the least volatile stocks receiving the highest weights.

Float is the total number of shares publicly available for trading.  The float is calculated by subtracting restricted shares from shares outstanding.

Tradable Equity Float (Public Float) is the number of shares publicly owned and available for trading. Floating shares are included in the calculation of a company’s outstanding shares, along with restricted stock. Restricted stock is only available to company insiders, like employees and executives. It is not freely traded among the public and is subject to special Securities and Exchange Commission restrictions. Unlike floating stock which is freely tradable.

A Buyback is the repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may be looking for a controlling stake.

The performance of High Dividend Equity Strategies is calculated as the average of ten high dividend indices which has at least one ETF with a minimum of $100 million AUM tracking it.

The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.

www.AdvisorShares.com

2 Bethesda Metro Center, Suite 1330 • Bethesda, Maryland, 20814 • 1.877.THE.ETF1 (1.877.843.3831)

By:  David Allen, Portfolio Manager of AdvisorShares Accuvest Global Opportunities ETF (ACCU) & AdvisorShares Accuvest Global Long Short ETF (AGLS)

As the antigovernment protests in Turkey continue, what’s next economically for a country that relies heavily on foreign investors and tourism, especially with summer approaching, the traditional tourist high season? Accuvest Global Advisors, a firm founded on the principle of thinking globally and investing globally, has prepared the following focused country review on Turkey, which analyzes current risks with Turkey and potential next steps in the crisis.

The Market

In United States Dollar (USD) terms, the MSCI Turkey Index has lost -22.10% since May 8, 2013.  The index has lost 8.70% year-to-date, and remains up 28.40% over the last 12 months.

The Story

The Turkish protests were sparked by an initiative of the country’s political leadership, the AKP – Justice and

Development Party of Turkey, to re-develop one of the last and only green space parks of Istanbul, Taksim Square, into a mall/opera-house/park.  The Turkish police responded to the first protesters, largely upper-middle class generation y individuals, with brute force which drew more protesters (both general public and more extreme Leftists) to the streets.  Opportunistic Leftists made up the majority of the street protesters on days two and three when violence and vandalism spiked.  Politically fragmented and disparate groups have now united across the country to accuse the government of authoritarianism.  In 12 days of protests in Turkey, four people have died, 5,000 protesters have been treated for injuries or the effects of tear gas, and 600 police officers have been injured.

Why This Is Not An ‘Arab Spring’

The AKP political party has won the last three elections and Prime Minister Erdogan remains popular with many Turks because of his economic record over the past ten years. The Turkish government continues to be supported by a large majority, and a formidable government competitor remains long off.  These socio-economic and political factors distinguish the Turkish protests from recent uprisings in both the Middle East and Southern Europe.

• Erdogan’s government has been credited with pursuing prudent fiscal and monetary policies while promoting investments in infrastructure, education, health and technology.
• The per capita gross national income and the gross domestic product have both tripled in the past ten years.
• Foreign investment has dramatically increased, with the number of foreign companies with international capital expanding from 6,700 in 2003 to nearly 30,000 in 2011.
• A.T. Kearney’s 2012 Foreign Direct Investment Confidence Index placed Turkey as the world’s 13th most attractive place to invest.

What is Next?

Local elections are next March, and presidential elections will be next summer.  If the Prime Minister doesn’t resolve the situation, Turkey could see a leadership change.  Importantly, any transition in leadership is likely to be democratic.  Upcoming elections in 2014 will provide an opportunity for protesters to express themselves at the ballot box.  The president of Turkey does have the ability to dismiss the cabinet, including the PM, and form a new government.  This option is unlikely, and would result in political deadlock, economic uncertainty, and market volatility.

Definitions

The MSCI AC World Index (ACWI) is an unmanaged free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.

The MSCI Turkey Index is a free float-adjusted market capitalization index designed to measure broad-based equity market performance in Turkey. It seeks to measure the performance of the Turkish equity market. Components primarily include consumer staples, financial and industrials companies.

One cannot invest directly in an index.

For more information, call AdvisorShares at 1-877-THE ETF1 (1-877-843-3831) or visit www.advisorshares.com

To subscribe to our full monthly report, please register at www.advisorshares.com (note the full report is only available to financial professionals).

 There are risks involved with investing in ETFs including possible loss of money. Shares are actively managed and are subject to risk similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.

Shares are not individually redeemable and owners of the shares may acquire those shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 shares.

This document should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any products mentioned.  This document has been prepared without regard to the individual financial circumstances and objective of persons who received it.  The securities discussed in this document may not be suitable for all investors.

This material was compiled by AdvisorShares based on publically available data.  AdvisorShares makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to such data.

AdvisorShares® is a registered trademark of AdvisorShares Investment, LLC. The trademarks and service marks contained herein are the property of their respective owners.

Follow the AdvisorShares Team on Twitter at www.twitter.com/advisorshares or

‘Like’ us on Facebook at www.facebook.com/advisorsharesinvestments.

For more information, call AdvisorShares at 1-877-THE ETF1 (1-877-843-3831) or visit www.advisorshares.com

We wanted to share a part of a report that TrimTabs sent out over last weekend that received some attention on CNBC on June 10, 2013.  Please let us know if you would like to receive a full copy of the report. TrimTabs research focuses on fund flows and float shrink.  As you know, they believe the market is heavily influenced by what people and institutions are doing with their dollars.  You can read more about the research behind float shrink at AdvisorShares.com.

- Demand Indicators Somewhat Bearish for Short Term and More Encouraging for Longer Term.  Market Volatility Puts Modest Damper on New Stock Offerings.

- Bond Fund Flows Decline for Five Consecutive Months, and Bond Funds Lose $7.3 Billion since Start of May 2013 as Yields Rise Sharply.

- No Sign of Pickup in Lackluster U.S. Economic Growth, and Manufacturing Sector Particularly Weak.

We think investors with a longer-term outlook should tread carefully in financial markets.  The Federal Reserve and its fellow central banks have succeeded in making almost every major asset class in the world overpriced.  And it is amazing how quickly bubble behaviors from the last decade have come back.  To name just a few examples, global junk bond issuance is running at a record pace, house flipping in California is running at the fastest pace since 2005, and Wall Street firms are creating synthetic collateralized debt obligations in size for the first time since 2009.  Confidence that central bank intervention can solve economic and financial problems has never been higher than it is today.

We first advised traders to consider trimming long positions in TrimTabs Overnight Liquidity Update on Tuesday, May 21, the same day the S&P 500 Index hit a record closing high.  But we are not convinced that the high that day was the ultimate top of this central bank liquidity-fueled rally.  Our intermediate-term demand indicators turned more favorable in the past week.  The TrimTabs Demand Index closed at 82.0 on June 6 comfortably above the interim low of 70.4 on May 21 (readings above 50 are bullish).  Since the index exceeds 75, the TrimTabs Demand Index is leveraged bullish (200% long) on U.S. equities.

While the longer-term outlook is favorable, we believe a contrarian analysis of ETF flows suggests stock prices are unlikely to bounce much more over the short term.  Investors in leveraged ETFs have turned upbeat, which is negative from a contrarian perspective.  In the past week, leveraged long ETFs issued 13.5% of assets, the biggest inflow all year.  Another negative contrarian signal is that inflows into U.S. equity ETFs have been elevated.  These ETFs issued $12.4 billion (1.6% of assets) in the past month.

Corporate liquidity flows in the past week were pretty inconsequential.  On the sell side, new stock offerings totaled $6.7 billion amid the stock market pullback, led by another government sale of General Motors shares.  On the buy side, companies announced a modest $7.8 billion in float shrink.  We believe the float is unlikely to shrink much later this year if corporate actions do not turn more bullish than they have been in May and June.  Since the start of May, announced corporate buying (new cash takeovers + new stock buybacks) of $77.5 billion has been $33.1 billion higher than new offerings of $44.4 billion.

This communication is a publication of TrimTabs Asset Management. It should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Information presented does not involve the rendering of personalized investment advice. Content should not be construed as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. Performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment-management fee, the incurrence of which would have the effect of decreasing performance returns. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Past performance may not be indicative of future results. Therefore, no investor should assume that the future performance of any specific investment or investment strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of an investor’s portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for an investor’s portfolio.

One cannot invest directly in an index.

www.AdvisorShares.com

2 Bethesda Metro Center, Suite 1330 • Bethesda, Maryland, 20814 • 1.877.THE.ETF1 (1.877.843.3831)

To subscribe to our full monthly report, please register at www.advisorshares.com (note the full report is only available to financial professionals).

There are risks involved with investing in ETFs including possible loss of money. Shares are actively managed and are subject to risk similar to stocks, including those related to short selling and margin maintenance. Ordinary brokerage commissions apply.

Shares are not individually redeemable and owners of the shares may acquire those shares from the Funds and tender those shares for redemption to the Funds in Creation Unit aggregations only, typically consisting of 50,000 shares.

This document should not be considered investment advice and the information contain within should not be relied upon in assessing whether or not to invest in any products mentioned.  This document has been prepared without regard to the individual financial circumstances and objective of persons who received it.  The securities discussed in this document may not be suitable for all investors.

This material was compiled by AdvisorShares based on publically available data.  AdvisorShares makes no warranties or representation of any kind relating to the accuracy, completeness or timeliness of the data and shall not have liability for any damages of any kind relating to such data.

AdvisorShares® is a registered trademark of AdvisorShares Investments, LLC. The trademarks and service marks contained herein are the property of their respective owners.

Follow the AdvisorShares Team on Twitter at www.twitter.com/advisorshares or

 ‘Like’ us on Facebook at www.facebook.com/advisorsharesinvestments.

For more information, call AdvisorShares at 1-877-THE ETF1 (1-877-843-3831) or visit www.advisorshares.com

After reading the past weekend’s edition of Barron’s that included a special report on active ETFs, some additional insights came to mind but we should first point out two immediate clarifications:

1.  Derivatives are no longer an issue for both index ETFs and active ETFs.  The SEC has completed their review of derivatives in ETF exemptive requests and is now allowing their use. The SEC even went as far to issue a no action letter for firms such as PIMCO, who initially obtained ETF exemptive relief without derivatives, to now be able to include them.

2. The listing of the top 10 active ETFs omitted the AdvisorShares Peritus High Yield ETF (HYLD) (although later corrected in the story’s online version).

That being said, we feel other areas covered in the story require a different perspective.

Overview

The story suggests that established firms are not interested in “cheaper” iterations of existing strategies, but hasn’t PIMCO proved you don’t have to charge a lower management fee?  Strategies will be priced based on the value that a manager feels they provide.  It is also important to remember that some aspects of an active ETF are more operationally cost efficient and certainly much more tax efficient—these two elements can provide a lower overall total cost (though keep in mind, spreads and commissions increase any ETF’s overall total costs).

The article mentions many “industry observers” suggest 2013 is the year for active ETFs.  Who are these industry observers, and do they know anything about the distribution process of active strategies?  Unless you are similar to PIMCO, the reality is it will take some time.  We believe over time as more strategies demonstrate their ability to perform, assets will follow good performance.

Managed Portfolios

In our opinion, the panel was spot on regarding ETF managed portfolio strategies.  Only looking at the $60+ billion already tracked, overshadows that many financial advisors don’t promote their own managed portfolio strategies but still use ETFs to implement their active strategies.  We believe the biggest misconception on the growth of index ETFs is about passive management.  Index ETFs are the most widely traded securities, with considerably more financial advisors using these products to implement their own active strategies that likely represent well over half of all index ETF assets.  The growth of index ETFs is more about the empowerment of advisors having decided to take the active management into their own hands – not a statement in support of buy and hold passive investing.  Keep in mind just as this works for beta baskets, this empowerment will work with implementing alpha baskets into these managed strategies as well.

Closing a Successful Fund to New Investors

In the story, Vanguard’s Joel Dickson raises an interesting concern if an active ETF became so successful, the manager could feel the need to close the ETF to new investors.  He seems to indicate that the potential resulting premium in the share price of a closed ETF would be detrimental, but we are not so sure.  It’s a peculiar point because when a sponsor closes a fund, it is done to protect the existing shareholders.  Based on his premise that the active ETF is successful—assuming that is from an asset perspective—and was to close and begins to trade at a premium, it’s literally the best of both worlds. As the premium will likely further ensure no new shareholders would buy the ETF, any of the existing shareholders that want to exit can then sell at a premium too (assuming the ETF is trading at a premium as Dickson suggests). Or if for some reason investors feel it’s worth the premium, new shareholders can pay it because they have a choice.

Transparency

After a section that describes the arbitrage process for active ETFs—which is a bit unusual since this process is applicable to all types of ETFs—attempting to connect to transparency, Barron’s Brendan Conway writes “if the entire market knows what a manager is buying or selling in real time, it’s a bit like showing your hand in poker.” It’s a funny line, but just not true.  The portfolio is not disclosed in real time, it is disclosed the day after the manager makes a change.  It’s not like showing your hand in poker – it’s like playing your hand then showing your cards, and then privately playing the next hand until you are done for that day.  This is an important function for ETFs and an important benefit.  Have you seen one piece of research that says a manager loses alpha with transparency? We have certainly seen plenty of managers who can’t provide alpha without transparency.

Nobody actually demonstrated how front running would be an issue in an active ETF. Just because one can see what was in the portfolio yesterday doesn’t mean anyone knows what the manager is going to do tomorrow.  And every time this is mentioned for a transparent active ETF, why isn’t it discussed more often for an index-based strategy—assuming the index is transparent and can be consistently front run on each rebalance.  Kudos to Cambria’s Meb Faber and PIMCO’s Vineer Bhansali for calling transparency a non-issue.

Active Structure

Eaton Vance’s Stephen Clarke provided a surprising explanation how an exchanged traded managed fund (ETMF) functions.  First, our primary concern is the lack of transparency, believing that is a step backward.  But we were most surprised to hear that while their proposed product would list on an exchange, it won’t actually trade during the day. Clarke tries to explain that an ETMF order will be “filled,” but the actual price won’t be known, instead only disclosing the mark up (for a purchase) or mark down (for a sale). Hypothetically speaking, how would investors react if selling such a fund, locking-in a trade during market hours at a few pennies discount to NAV, but won’t know the price until after 4pm when the fund strikes an NAV, while the market plunges in that elapsed time?

We bet mutual fund companies would sign up for this even without being exchange listed.  Can you imagine how fund companies, which today will take your order any time during the day and get you out at NAV without a mark up or mark down, would look at these products? It would present an avenue to make more money by just being available to take an order that won’t be executed until later.

It’s an unusual model in that Clarke seems to suggest the market maker doesn’t have hedging costs. But if the market maker is expected to hold inventory to fill orders, then they have daily exposure to changes in the strategy, while masking the holdings only increases their risk and thus likely increases the mark up or mark down on the trading. After the first time a market maker takes a hit on the lack of transparency and the hedging, look for an even bigger impact to those mark ups and mark downs (or maybe better to refer to them as premiums and discounts).

Lastly, the prominent mutual fund (Fairholme Fund) cited by Morningstar’s Ben Johnson is a poor example of the type of strategy that wouldn’t be a good fit for the liquidity of an ETF.  In fact, the mentioned fund is the perfect example of the inefficiency of the mutual fund structure.  In the Fairholme example, a lot of hot money comes in which is more wear and tear on the portfolio manager to put the cash to work. There is a cost to do that: spreads and settlement costs that impact both the new investors and your long-time shareholders.  Then something happens: the fund falls out of favor, all the hot money is flying out, the PM is now selling what he can to meet redemption requests with those costs again impacting the departing shareholders, but also being born by the long-term shareholders. In reality, it is the long-term shareholders that will suffer the most by the tax inefficiency of the capital gain generating transactions.

If this same scenario happened in an ETF, the hot money would bear their own costs, paying their own spreads and commissions, and baskets of securities would be delivered to the fund.  And if the reverse scenario occurred and the hot money left, the departing shareholders would pay their own costs of commissions and spreads, and securities would be delivered out in kind creating a future tax benefit for the long-term shareholders. This exemplifies the greatness of an ETF structure, where each shareholder pays for the cost of their own activity, and long-term holders can benefit from short-term holders who help create better tax efficiency and smaller spreads.  And, it’s one class—everyone is treated equally, and the retail shareholders can benefit from the economies of scale by investing alongside institutional investors.

In Conclusion

Barron’s is a great publication with terrific journalists such as Brendan Conway, but unfortunately some essential points were missed.

While they are correct, that index high yield ETFs can trade at premium and discounts to the indicative value, the important thing to remember is at their core, most ETFs (40 Act ETFs) in some aspects are just like mutual funds.  Yes, with a high yield ETF you can see premiums and discounts represented in the bid and ask price throughout the day, which is determine by a large crowd of participants (retail buyers and sellers, institutional buyers and sellers, prop traders, etc…).  We believe this is a very efficient way to price.

Where as a high yield mutual fund can and will often price their NAV at a “fair value” price.  This also represents a premium or discount to the underlying bonds, however mutual funds do not provide the transparency of an “indicative value” to understand how much that fair value NAV is a premium or discount to the underlying bonds.  You should call your high yield mutual fund provider to understand how often they use this fair value pricing – you may be surprised by that answer.  (note this same process that happens to international equity funds as well).

Our take: there is no “NAV pricing” free lunch in the mutual fund space, we believe the “crowd” determined price of a high yield ETF is a better than the mutual fund sponsor determined “fair value NAV”.

Long live active ETFs!

While, active ETFs benefit from the education that index ETFs have provided, index ETFs in their early inception where most targeted at institutions which traditionally are early adopters and can invest significant amounts of capital.  Active ETFs have mostly been adopted by the retail channel through fee based financial advisors who understand the benefits of active management, but also desire the benefits of the ETF structure which include intra-day liquidity, better trading (risk) control (limit orders), transparency, and a more operationally efficient structure that reduces operational expense and can be more tax efficient.

Red-Active  Yellow-Index

The Foundation will provide funding support to Dr. Mukwege’s Panzi Hospital in the Democratic Republic of Congo. The Panzi Hospital is world-renowned for its work on reproductive health and its assistance to survivors of sexual violence in a region where unrest and devastating hardship are factors of daily life.

The GlobalECHO Foundation will contribute funds to provide solar panels for the entire hospital, bringing a reliable source of renewable energy to the hospital, which in turn will provide consistent hot water and warm meals for the patients and enhance the ability of the staff to perform life-saving surgeries.