AdvisorShares expands active ETF range with launch of country rotation strategy

Jan 31st, 2012 | By | Category: Alternatives / Multi-Asset

AdvisorShares Investments, a US-based ETF sponsor, has added to its expanding range of active ETFs with the launch of the AdvisorShares Accuvest Global Opportunities ETF.

AdvisorShares expands active ETF range with launch of country rotation strategy

The AdvisorShares Accuvest Global Opportunities ETF utilises a proprietary country ranking model which sorts countries from most attractive to least attractive, on a monthly basis, based on a broad range of different factors.

The fund, managed by Accuvest Global Advisors, a California-based investment adviser with over $300 million in assets under management, trades on the NYSE and goes by the ticker code ACCU. Accuvest is also the manager of AdvisorShares’s existing Global Long Short ETF (NYSE: AGLS).

The AdvisorShares Accuvest Global Opportunities ETF, or ACCU for short, implements a global country rotation strategy that seeks long-term capital appreciation in excess of global equity benchmarks such as the MSCI All Country World Index.

Accuvest, early pioneers of the use of single-country ETFs to create top-down global equity strategies, utilises a proprietary country ranking model which sorts countries from most attractive to least attractive, on a monthly basis, based on a broad range of different factors. Single-country ETFs from the five to six highest-ranked countries then form ACCU’s portfolio.

As of 30 January 2011, the top five holdings were the iShares MSCI Thailand Investable Market Index Fund, the iShares S&P 500 Index Fund, the iShares MSCI Brazil Index Fund, the iShares MSCI South Africa Index Fund, and the iShares MSCI Russia Capped Index Fund, giving the fund a clear emerging market bias.

The model’s factors – nearly 40 in all – fall into four major groups and are selected based on historically suc­cessful investment strategies consistent with economic theory. According to Accuvest, focusing on multiple factors instead of a single set of factors helps minimise risk during times of extended market moves in one direction or another.

Examples of these factors include, but are not limited to, fundamental factors such as earnings and economic growth, momentum factors such as mean reversion and price movement, risk factors such as currency and volatility, and valuation factors including absolute and relative metrics.

Noah Hamman, CEO and Founder of AdvisorShares, said, “Accuvest’s proprietary model methodology seeks to identify countries that are targeted to outperform global indices.  Their innovative approach to global investing will allow advisers and their clients access to a long-term alternative strategy that seeks to generate alpha above all global benchmarks – all within a transparent and cost-efficient ETF structure.”

David Garff, President of Accuvest and co-Portfolio Manager said, “We are thrilled to have our second actively-managed ETF with AdvisorShares begin trading.  In an environment where disciplined investors and advisers are searching extensively for alpha, we believe the turmoil in global markets is providing opportunity at a country level.”

“Our benchmark agnostic approach of using the highest-ranked single country ETFs aims to minimise risk during times of extended market moves in one direction or another, allowing ideal exposure to global equities within a broadly diversified portfolio,” he added.

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