As the ETF world has continued to expand, new funds have had to venture beyond tracking popular indexes such as the S&P 500 or Russell 2000 in order to capture investor interest. One corner of the ETF space that has been slow to gain traction but still seems poised for a breakout is the actively-managed arena, where inflows are starting to materialize and a promising pipeline features some exciting new products [see Inside The Active ETF Pipeline].
Currently, one of the most popular actively-managed ETFs on the market is PIMCO’s Enhanced Short Maturity Strategy Fund (MINT), which has racked up an impressive $400 million in assets and brings in revenues of almost $1.4 million a year for the California-based investment giant. AdvisorShares has also seen some success in actively-managed ETFs, as the company’s long-short ETF (GRV) has about $43 million in assets and the active international fund (AADR) is starting to attract significant interest as well. The firm continues to make plans for an expanded footprint in the space, detailing ideas for some new products in a recent filing with the SEC. In the document, the company is seeking approval to launch two new funds-of-funds, including one targeting a growth strategy and the other targeting income oriented investors. Below, we highlight some of the key details of these proposed funds from the Maryland-based issuer [see all of the AdvisorShares ETFs here].
SiM Dynamic Allocation Income ETF (DINC)
This fund will seek to provide investors total return, consisting primarily of reinvestment and growth of income with some long-term capital appreciation. DINC will do this by primarily investing in other exchange-traded funds that offer diversified exposure to various asset classes, regions, and styles. The filing states that DINC will generally invest at least 60% of its net assets in domestic and international fixed income funds [see Fixed Income ETFs: What Every Financial Advisor Needs To Know].
SiM Dynamic Allocation Growth ETF (DGRO)
This fund will seek to provide total return, consisting primarily of long term capital appreciation with some reinvestment and growth of income. Like its income-focused counterpart, DGRO will invest in other exchange-traded funds with the potential to establish exposure to various asset classes. According to the filing, the fund seeks to offer investors the potential for total return from a low to medium level of income and a medium to high level of capital growth, while exposing them to a medium to high level of principal risk. Through its investments in other ETFs, the proposed fund will generally invests at least 60% of its net assets in domestic and international equity funds [also read Three Low Beta Equity ETFs For A Volatile Market].
The new funds, if approved, would join three existing products from AdvisorShares, and perhaps several other ETFs that could launch in the not-so-distant future (including a high yield bond fund and active bear ETF). While expense ratios are not currently available for the proposed funds, the rest of the AdvisorShares suite of products has an average expense ratio of 1.43% [see AdvisorShares Rolls Out Another Active ETF].
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Disclosure: No positions at time of writing.