AdvisorShares has repurposed one of its ETFs, changing the fund’s investment advisor and giving it a new strategy.
Noah Hamman, CEO of AdvisorShares.
The ETF formerly known as the AdvisorShares DoubleLine Value Equity ETF (DBLV US) is now the AdvisorShares Insider Advantage ETF (SURE US).
Jeffrey Gundlach’s DoubleLine Capital has been dropped as the fund’s sub-advisor with Minyi Chen, founder and CEO of California-based investment advisor Qubed Capital, now acting as the ETF’s portfolio strategist.
For over a decade, Mr. Chen has been providing quantitative financial research and analysis along with proprietary investment models to both retail and institutional investors.
SURE will remain an actively managed US equity fund; however, it will switch its focus from classic value opportunities to firms that are actively reducing their public equity float through stock buyback programs and corporate insider buying.
Buyback programs and insider buying generally demonstrate that a company’s executives see relative value in their equity securities. The action may also create favourable shareholder market conditions through the reduction of publicly available shares (known as float shrink).
SURE selects its holdings using a quantitative, multi-factor model that aims to identify companies shrinking float, lowering leverage, growing free cash flow, and providing dividends. The ETF’s holdings are equally weighted with portfolio reconstitution and rebalancing typically occurring on a monthly basis.
SURE is currently listed on NYSE Arca with assets under management of approximately $50 million. It has an expense ratio of 0.91%.
Noah Hamman, CEO of AdvisorShares, commented: “We look forward to introducing SURE to the marketplace as not all buyback-focused strategies are the same. SURE’s actively managed investment approach re-valuates its investable universe and portfolio holdings monthly which is a distinct departure from passive, market-cap-weighted strategies that track indexes and reconstitute annually. Combined with the features of a fully transparent and operationally efficient ETF structure, we believe SURE presents a compelling investment option for advisors and all investor types.”
The changes mark the third revamp for the ETF which was originally launched in 2011 as a buyback strategy actively managed by TrimTabs Asset Management. TrimTabs was removed in 2016 in favour of Wilshire Associates, and then in 2018, the ETF switched its strategy to the value-oriented approach managed by DoubleLine.