AdvisorShares has lowered the net expense ratio for its actively managed AdvisorShares Dorsey Wright ADR ETF (AADR US) from 98bps to 89bps.
Noah Hamman , chief executive officer of AdvisorShares.
The fund has experienced increasing investor demand and recently passed $260m in assets under management.
According to AdvisorShares, the fund’s growing assets has made the ETF more operationally efficient and allowed for a reduction in its operating expenses.
AADR carries a five-star Morningstar rating for its overall risk-adjusted performance.
Noah Hamman chief executive officer of AdvisorShares, commented, “As we’ve previously indicated, and are now fortunate to realize, we believed AADR’s continuous growth would lead to another opportunity to lower its total net expense ratio.
“AADR has consistently delivered benchmark-beating performance with full-transparency and we’re pleased that its shareholders may further benefit from this announcement. We feel that with Dorsey Wright’s exemplary portfolio management and their renowned expertise in relative strength investing, AADR may continue to see increased demand especially as its availability expands on different investment platforms.”
Dorsey, Wright & Associates (DWA) serves as the portfolio manager of AADR. AADR’s investment approach adheres to DWA’s 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.