AdvisorShares, the Bethesda, Md.-based ETF sponsor known for its
actively managed funds, today rolled out an ETF that's designed to
protect investors from losses in bearish market cycles through a
trend-following strategy that own equities in good times and
short-term debt instruments when markets are in turmoil.
The AdvisorShares Global Alpha & Beta ETF (NYSEArca:RRGR) is
an actively managed global asset allocation fund that blends single
equities and funds in a mix that tries to outperform financial
benchmarks such as a 60 percent/40 percent allocation to the
S&P 500 Index and the Barclays Capital Aggregate Bond
The fund, which comes with a net annual expense ratio of 1.40
percent that includes a waiver of 0.32 percent, is diversified
across industry sectors and countries in a top-down investment
style that first looks at the big economic picture before narrowing
its focus to sectors, countries and ultimately individual
Finally, the strategy is designed to mitigate volatility and
risk, and looks at variables such as the 200-day moving average of
the S&P 500 Index and the bond market's yield curve to
determine when to add a defensive position to preserve capital.
That protection is obtained through high-quality debt securities
and money market instruments either directly or through ETFs, and
can represent as much as 100 percent of the portfolio, according to
the most recent prospectus the company filed with U.S.
While RRGR is an equities fund, and global in scope, the
trend-following strategy recalls the RBS US Large Cap Trendpilot
ETN (NYSEArca:TRND), which flips to equities or short-term
Treasurys exposure based on whether the S&P 500 is above or
below its 200-day moving average for at least five days.
TRND has gathered more than $74.5 million since its launch in
December 2010. The fund has also done well relative to the broad
stock market, tagging on gains of 7.4 percent year-to-date, while
the S&P 500 Index has gained 6.6 percent in the same period. It
costs 1.00 percent when it's exposed to stocks and 0.50 percent
when it switches to Treasurys exposure.
RRGR joins AdvisorShares' other global tactical ETF, the $78.5
million Cambria Global Tactical ETF (NYSEArca:GTAA), which also
allocates across global sectors, but includes bonds, real estate,
commodities and currencies, as it looks to generate absolute
returns while protecting capital on the downside.
Roger Nusbaum, chief investment officer of Phoenix-based Your
Source Financial is RRGR's portfolio manager. He is known for the
"Random Roger" stock market blog and for his contributions to
RRGR is AdvisorShares' 15
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