On Feb 18, 2010, the US Fed announced an increase in the short-term discount rate from 0.25% to 0.75%. This is likely just the first of many more gradual increases in interest rates implemented by the Fed as the year unfolds. So what options to investors have when looking to stash away their cash?
Archive for February, 2010
ActiveETFs | InFocus spoke with – Noah Hamman, CEO of AdvisorShares Investments LLC. AdvisorShares is the company behind the Dent Tactical ETF – the largest equity active ETF in the US to date. Noah shares with us his thoughts on the Active ETFs space, his plans for AdvisorShares and also the opportunities and challenges faced by actively-managed ETFs.
As yet another major player from the mutual fund industry files for Active ETFs, it seems the big asset management firms have now seen enough to know that they might well be missing the boat if they don’t hop on now. Legg Masson, with $679 billion in assets under management as at Jan 31, 2010, filed with SEC on Feb 23rd to launch an initial “series” of actively-managed ETFs.
GRV is an actively-managed ETF planned by AdvisorShares that looks to beat the MSCI World Index while have little correlation with the index. The fund takes operates by taking long and short positions in ETFs representing different sectors, regions, countries and styles, in order to benefit from relative outperformance.
On Feb 17, 2010, RiverPark Advisors filed for exemptive relief to launch two actively-managed ETFs – the RP Short Term High Yield Bond ETF and the RP Energy ETF. Previously, RiverPark has been the sub-advisor to 4 Active ETFs launched by Grail Advisors, in Oct 2009. However, evidently the arrangement between RiverPark and Grail was not exclusive as RiverPark is now planning to launch Active ETFs of its own.
AADR is an Active ETF planned by AdvisorShares that invests in a portfolio of ETFs, ADRs of foreign companies and in swap contracts in order to beat its benchmarks – the BNY Mellon Classic ADR Index and the MSCI EAFE Index. The fund looks to gain exposure to leading non-US companies that strong management teams and business strategies. The fund’s sub-advisor, WCM Investment Management, identifies sectors and industries that are most likely to benefit from global economic trends.
In more evidence of expansion in the Actively-Managed ETF space, on Feb 18, 2010, AdvisorShares announced a partnership with Peritus Asset Management LLC – a Santa Barbara based asset manager with approximately $492 million in assets under management that focuses on active fixed-income management. Peritus utilizes a value-based strategy that will be used to create a new Active ETF with AdvisorShares focusing on high-yield bonds.
Few investors even consider investing in real estate these days, given how much real estate market has suffered in the past 2-3 years. However, as David Fessler points out, it might be the right time to start considering a contrarian approach to this space. The above expectations housing starts coming in at 590,000 seem to support this view.
