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The fund, which has been listed on the NYSE Arca, aims to preserve capital while maximizing income.
It seeks to achieve this objective by investing in a broad range of fixed-income securities and US dollar denominated investment grade debt securities, including mortgage- or asset-backed securities rated Baa- or higher, with an average duration of less than one year.
The fund is sub-advised by Sage Advisory Services, an Austin, Texas-based asset manager, with deep expertise and experience in fixed income portfolio management and ETF strategies.
Sage’s fixed income investment process applies a balanced, top-down approach focused on actively managing portfolio duration risk, yield curve positioning, market segment allocation and security selection. Sage seeks to make the ultra-low duration portfolio less sensitive to interest rate changes, and provide the ability to be flexible across credit quality and security selection, while minimizing volatility and maintaining a high level of liquidity.
Noah Hamman, chief executive officer of AdvisorShares, said: “The threat of rising interest rates and a strong investor appetite for yield may present limited options for efficient ways to access and manage cash holdings. We believe HOLD delivers a compelling investment solution with the benefits of a liquid, transparent and efficient actively managed ETF by leveraging Sage’s well-established track record and expertise as a fixed income manager.”
Robert G. Smith, president and chief investment officer of Sage, added: “We believe our unique top-down portfolio management approach, which focuses across a diverse range of fixed income securities, is well-positioned to manage risk and duration in any market or interest rate environment. As a result, we believe our partnership with AdvisorShares can present HOLD shareholders a core portfolio component to help realize their investment goals.”
The new fund, which has a net expense ratio of 0.35%, is AdvisorShares’ 24th ETF and its 19th actively managed ETF. Combined, these funds have assets in excess of $1 billion.