Actively managed ETFs are a fast-growing niche, rife with benefits and challenges The cover story in Research Magazine’s October issue examines the fast growing actively managed ETF space. A wide scope perspective from leading industry experts, including AdvisorShares CEO Noah Hamman, is exhibited in the in-depth piece by Jane Wollman Rusoff, Contributing Editor of Research Magazine. You may read the story...
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Barron’s Winner Two Consecutive Quarters – PSN Top Guns Four Consecutive Years AthenaInvest, portfolio manager of the AdvisorShares Athena International Bear ETF (HDGI) recently announced that their Athena Pure Valuation | Profitability Portfolio has been recognized as a Barron’s separately managed award winner for consecutive quarters. Click here to read the...
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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...
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Perspective on “Going Active” from Barron’s 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...
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A few observations after reading an article on High Yield mutual funds and ETFs in Investment News http://etf.as/1576WwX 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...
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We are updating our Active ETF to index ETF growth comparison. After 5 years since the inception of actively managed ETFs, active ETFs continue to grow at a faster rate than index ETFs when compared to their first 5 years in the market. 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 ...
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