AdvisorShares lowers fees on Dorsey Wright international equity ETF

Dec 5th, 2017 | By | Category: ETF and Index News

AdvisorShares has lowered the expense ratio for the AdvisorShares Dorsey Wright ADR ETF (AADR US), an actively managed fund providing exposure to international equities with strong relative price momentum. Fees on the ETF have been reduced from 0.99% to 0.98%.

AdvisorShares lowers fees on Dorsey Wright international equity ETF

Dorsey Wright’s relative strength analysis places more value on relative price momentum rather than absolute price momentum.

AADR’s investment approach adheres to Dorsey Wright & Associates’ core philosophy of relative strength investing. ‘Relative strength’ in this context compares the price performance, or momentum, between securities. According to Dorsey Wright, the absolute momentum of the individual security is not as important as the relative momentum between them. The model determines whether momentum is increasing relative to another security and assigns a buy signal if it is. The securities are then ranked in descending order according to their cumulative number of buy signals.

AADR applies this process to US-listed American depositary receipts. The fund managers do not set limits on developed or emerging market exposures and will allocate between the two depending on global price trends. AADR delivers a concentrated underlying portfolio ranging from 30-50 equities that demonstrate favourable relative strength characteristics.

AADR carries a coveted five-star Morningstar rating for its overall risk-adjusted performance, ranking among the top-performing international equity strategies among both mutual funds and ETFs.

“As we have always said, you can deliver benchmark beating performance in a transparent actively managed strategy, and AADR has proven this,” said Noah Hamman, chief executive officer of AdvisorShares. “The increasing demand for AADR has provided an opportunity to lower its total net expense ratio, and we expect with continuous growth that the total expense ratio will continue to lower over time. We especially feel that the full transparency, intraday liquidity, and operational and tax efficiencies that the ETF structure provides makes AADR that much more of a compelling investment strategy to consider.”

According to AdvisorShares, the decision to lower the fund’s costs was made due to AADR recently surpassing $150m in AUM, which has allowed the fund to become more operationally efficient. The lower fees actually represent a contractual fee waiver in place until at least November 2018. The fund’s gross expense ratio is quite a bit heftier at 1.44%.

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