By Noah Hamman Advisors need to build a team of skilled and diverse portfolio players. Click here to check out Noah’s latest “The ETF Advisor” in the September issue of Investment...
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By Noah Hamman Advisors have two options when their clients are facing an ETF closure. Click here to read Noah’s latest “The ETF Advisor” column in Investment Advisor’s August...
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By Community Capital Management, Co-Portfolio Manager (Impact Fixed Income) of the AdvisorShares Global Echo ETF (NYSE Arca: GIVE) Over the last couple of years, we have heard an awful lot about green bonds. They are attracting all types of investors and everyone seems to be on the environmentally friendly bandwagon. According to the Climate Bonds Initiative, the total amount of outstanding green bonds in 2014 was $53.2 billion. This figure, however, only includes what’s known as labeled green bonds. Who is to define if a bond is labeled ‘green’? Good question. Here is the answer…any debt issuer can label its bonds green. It is an unregulated term. Even with the launch of the Green Bond Principles aimed at standardizing practices for issuers and investors, there still seems to be unrest. Now you are probably more confused with green bonds than you were before. Our apologies. We hope reading on will help solve this quandary. What the Climate Bonds data does not include is the number of bonds financing...
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As the U.S. dollar gains ground, currency hedges are more important By Noah Hamman In Investment Advisor’s May issue, AdvisorShares CEO Noah Hamman shares his perspective on navigating currency-hedged ETFs and how advisors may utilize these tools for their clients’ portfolios. Click here to read Noah’s story, “Hedging Currency With ETFs to Dampen...
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By Tim Gramatovich, CFA, CIO & Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisory firm of the AdvisorShares Peritus High Yield ETF (HYLD) There has been talk in the media recently about high yield being overvalued at current levels. However, we feel that historical metrics indicate that we are nowhere near a point of overvaluation; rather, there is still value to be had in this market. Looking at high yield bond spreads versus comparable maturity Treasuries is a primary way the “value” of the high yield market can be assessed. The chart below indicates a current spread to worst level of 513bps.1 Average Spread of the Credit Suisse High Yield Index This data goes back to 1/31/86, so nearly thirty years to the beginning of the high yield market, and over that time the average spread to worst level is 579bps. This average level includes some points of massive spread widening during three periods (1990/1991, 2001/2002, and 2008/2009), which undoubtedly skew that number...
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By: Tim Gramatovich, CFA, CIO & Heather Rupp, CFA, Director of Research for Peritus Asset Management, the sub-advisory firm of the AdvisorShares Peritus High Yield ETF (HYLD) Just what is the formal definition of high yield? High yield, or its more polite acronym, non-investment grade, is based off of the ratings grids provided by the two major credit rating agencies, Moody’s and Standard & Poor’s. All bonds rated below Baa by Moody’s are considered high yield or non-investment grade. Similarly, all ratings below BBB by Standard & Poor’s are considered high yield. We remain perplexed as to how these two private companies came to monopolize the business and have become the definitive standard on who gets credit and on what terms. Ironically, even after their well-publicized gaffes in the scandals of Worldcom and Enron, and more recently with the ratings of structured products, they ended up with more power. Post the financial crisis, efforts to remove the power of ratings in the fixed income market have been undertaken,...
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