AdvisorShares, a US-based sponsor of actively managed exchange-traded funds (ETFs), has unveiled its latest collaborative effort: the AdvisorShares Athena International Bear ETF (HDGI) listed on the NYSE Arca.
AdvisorShares has teamed up with AthenaInvest to launch an international ‘bear’ equity ETF (Photo © Eva Kröcher).
The fund, managed by AthenaInvest Advisors, a SEC Registered Investment Adviser, seeks capital appreciation via a short-only international equity strategy and tactical overlay.
Led by Dr. C. Thomas Howard, PhD, co-founder and chief investment officer, AthenaInvest utilises a behavioural factor-driven investment process that measures manager behaviour, strategy consistency and conviction to determine potential short candidates based on pricing distortions created by emotional investors.
The process works by identifying which stocks are held in top and bottom relative weight positions within the equity universe, in this case American Depositary Receipts (ADRs) and international company stocks traded on US exchanges. Short positions are selected from the lowest conviction holdings in the universe.
In addition, a tactical overlay allows the manager to increase or decrease portfolio exposure to short positions based on broad market indicators, potentially enhancing performance.
The portfolio can range from 50 to 100 positions. It currently has 50 open short positions, delivering net exposure of -95.27%. Major positions include HSBC (-7.14%), Toyota (-7.10%), Vodafone (-4.99%), BP (-4.64%) and GlaxoSmithKline (-4.45%).
The fund has a range of possible uses. Investors who are particularly bearish will see the fund as a potential opportunity to capitalise on any market falls. Similarly, the fund could be used to reduce long exposure and hedge existing long positions or be paired with long-only portfolios as part of an overall long/short equity strategy.
Noah Hamman, chief executive officer of AdvisorShares, said: “We believe that Athena’s behavioural investment process and extensive track record of producing measurable results brings a unique approach to the HDGI strategy. With the launch of the first international all-short actively managed ETF, we feel that investors and financial advisors in search of portfolio diversification will find HDGI an important investment option not historically available via a transparent, liquid and efficient active ETF structure.”
Dr. C. Thomas Howard added: “Our behavioural portfolio management approach and patented behavioural investment process is deeply rooted in a robust academic foundation with over 35-plus years of research and statistical validation. With our scalable and holistic process, we aim to provide shareholders with a compelling alternative to other short and inverse products. Partnering with AdvisorShares allows us to deliver a unique strategy, providing benefits historically associated with alternative and hedge fund strategies, but delivered in a portable, liquid and transparent active ETF.”
The fund has a net expense ratio of 2.00%.