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AdvisorShares Unveils Active High Yield ETF
December 1, 2010
SAN DIEGO (ETFguide.com) – A new actively managed fund called the Peritus High Yield ETF (NYSEArca: HYLD) has just been launched.
HYLD focuses on the high yield debt market sometimes referred to as “junk bonds.” The fund’s strategy is to favor long-term absolute returns and to scour the secondary market for bond values versus buying new bond issues. The fund also aims to avoid overreliance on traditional credit analysis provided by credit rating agencies.
HYLD’s largest holdings are bonds from Chiquita Brands, Sanmina-Sci Corp. and a 22 percent cash position as of the end of November. The fund has 25 bond holdings and the current yield is around 10 percent.
Bethesda, MA-based AdvisorShares serves as the fund’s principal advisor by supervising the fund’s strategy and execution.
"We are very excited to be the first firm to offer an actively managed high yield bond ETF to investors and high yield is one of the top asset classes that benefits from professional active management,” said Noah Hamman, CEO and Founder of AdvisorShares.
The new actively managed ETF is sub-advised by Peritus Asset Management based in Santa Barbara, CA. Timothy Gramatovich and Ronald Heller are the firm’s founders.
The fund’s annual fee of 1.35 percent is capped for one year.
New Leveraged Equity ETNs
In related new product offerings, Barclays introduced eleven leveraged exchange-traded notes (ETNs). The notes are linked to stock indexes from S&P, Russell and MSCI.
The notes with the word “extended” in their name aim for three times leverage over the 10-year life of the note while the “enhanced” products shoot for two times leverage over the same period.
The new iPath ETNs are:
--iPath Long Extended Russell 1000 TR Index ETN (NYSEArca: ROLA)
--iPath Short Extended Russell 1000 TR Index ETN (NYSEArca: ROSA)
--iPath Long Extended Russell 2000 TR Index ETN (NYSEArca: RTLA)
--iPath Short Extended Russell 2000 TR Index ETN (NYSEArca: RTSA)
--iPath Long Extended S&P 500 TR Index ETN (NYSEArca: SFLA)
--iPath Short Extended S&P 500 TR Index ETN (NYSEArca: SFSA)
--iPath Long Enhanced MSCI EAFE Index ETN (NYSEArca: MFLA)
--iPath Short Enhanced MSCI EAFE Index ETN (NYSEArca: MFSA)
--iPath Long Enhanced MSCI Emerging Markets Index ETN (NYSEArca: EMLB)
--iPath Short Enhanced MSCI Emerging Markets Index ETN (NYSEArca: EMSA)
--iPath Long Enhanced S&P 500 VIX Mid-Term Futures ETN (NYSEArca: VZZ)
The eleven iPath leveraged equity notes charge fees between 0.50% to 0.89% plus additional financing fees.
"The leveraged iPath ETNs offer a new way to manage capital across the equity markets and we believe these investment tools will be useful for investors wishing to tailor the risk/return profile of a global equities portfolio," said Philippe El-Asmar, Head of Investor Solutions at Barclays Capital.
All of the notes have termination clauses which are triggered if certain thresholds are met. For example, the S&P 500 and Russell 1000 linked ETNs are automatically liquidated should they fall 20% below their original value.
ETNs are unsecured debt instruments linked to the performance of securities, currencies or commodities and they carry credit risk of the issuing financial institution. |
