AdvisorShares, one of the largest issuers of actively-managed ETFs, has forged another partnership with a well known asset manager and has plans to team up on an ETF. A recent SEC filing detailed the Meidell Tactical Advantage ETF (MATH), which would be sub-advised by American Wealth Management. The proposed fund, according to the filing, would seek “to provide long-term capital appreciation with a secondary emphasis on capital preservation.”
American Wealth Management would implement a tactical strategy that had the ability to shift from 100% equity allocation to 100% fixed income allocation depending on market trends. MATH would be actively managed, and as such wouldn’t seek to replicate the performance of any specific index. Like many existing AdvisorShares products, MATH would have the flexibility to invest in other exchange-traded products, including ETFs and ETNs.
The fund’s sub-advisor would use a quantitative methodology to construct a mix of investments depending on the prevailing market conditions. The SEC filing laid out a range of potential concentrations for various asset classes:
| Asset Class | Range |
|---|---|
| Foreign | 0%-50% |
| Large Cap | 0%-50% |
| Mid Cap | 0%-30% |
| Small Cap | 0%-30% |
| Commodities | 0%-20% |
| Currencies | 0%-10% |
MATH would charge management fees of 1.20%, and the total expense ratio would come in at 1.60% [see List Of Cheapest ETFs].
Tactical Allocation ETFs
AdvisorShares partnered last year with Cambria Investment Management to introduce the Cambria Global Tactical ETF (GTAA). That actively-managed ETF also implements a tactical asset allocation strategy, utilizing other exchange-traded products to shift exposure to a variety of asset classes depending on the current market environment. GTAA, which debuted last October, has accumulated about $140 million in assets–making it one of the most successful actively-managed ETFs to hit the market [see Under The Hood Of GTAA].
AdvisorShares currently offers six actively-managed ETFs, partnering with a number of different sub-advisors to offer exposure to a number of different asset classes and investment strategies. Many of the company’s products have received strong interest from investors looking to combine active management with the potential benefits of the exchange-traded structure; in addition to GTAA, the Active Bear ETF (HDGE) and high yield debt fund (HYLD) have taken in assets of about $41 million and $23 million, respectively, during their brief histories [see Does An Active Junk Bond ETF Make Sense?].
AdvisorShares has continued to develop new partnerships and stuff the product pipeline with new ETF ideas. Recent filings have included a “Float Shrink ETF” with TrimTabs and a suite of equity and bond products with Madrona Funds.
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Disclosure: No positions at time of writing.
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