Date to be Launched: Yet to be confirmed
Links: Prospectus
Investment Strategy:
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. The typical time horizon for investments is 3-5 years and the fund will tend to hold fewer than 30 securities. WCM focuses on large-caps operating in the technology, consumer discretionary / staples and healthcare sectors.
Portfolio Managers:
WCM Investment Management provides the day-to-day portfolio management services for AADR and has about $1.4billion in asset under management. The portfolio is managed by:
Paul R. Black, Portfolio Manager, President & Co-CEO – Paul Black has been in the investment business for 26 years and has previous portfolio management experience with Wells Fargo and Bank of America.
Kurt R. Winrich, CFA, Portfolio Manager, Chairman & Co-CEO – Kurt Winrich has over 25 years of experience in the investment business and was the head of computer-aided design and analysis at Hughes Electronics Santa Barbara Research Center.
Peter J. Hunkel, JD, Portfolio Manager & Business Analyst – His 11-year career in the investment business includes positions as Chief Operating Officer and Senior Portfolio Manager for Centurion Alliance and as a portfolio analyst for the Templeton Private Client Group.
Michael B. Trigg, Portfolio Manager & Business Analyst – Michael Trigg has spent 9 years in the investment field and previously worked at Morningstar, where he managed their model Growth Portfolio and covered a variety of companies in the technology industry.
Past Performance –
1. The prospectus provides the performance of a “Focused Growth International Composite”, which represents 12 accounts managed by WCM with similar objectives, policies, strategies and risk to those of AADR. This composite has outperformed the MSCI EAFE benchmark in every period, including since inception (12/1/2004) by 7.55%.
The Numbers:
Expense Ratio – Capped at 1.25% till Nov 22, 2010 (by contractual agreement)
Analysis:
Positives –
- A track record that includes beating the MSCI EAFE by 7.55% since inception is very hard to overlook. While no guarantee for the future, such performance will inspire confidence in investors considering an investment in AADR.
Negatives –
- As with AdvisorShares’ existing product, DENT, AADR will also come in with a higher expense ratio than most funds, at 1.25%. This may well be a deterrent for investors, but a high expense hasn’t appeared to be a hurdle for DENT, which now has the largest market cap for an actively-managed equity ETF, despite a hefty 1.56% expense ratio.
Disclosure: No positions in above-mentioned names.
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