AdvisorShares, one of the leading providers of ‘actively managed’ Exchange Traded Funds recently made another addition to its product portfolio by introducing the AdvisorShares Global Echo ETF (GIVE), in partnership with environmental advocate Philippe Cousteau. The ETF will be a new addition to the already well-established existing base of actively managed ETFs by the firm. (Read JETS Files for "JETS Deep Value Index Fund")
This move from AdvisorShares might be viewed as a strategic move by the provider, to increase its market share and further strengthen the established foothold in the actively managed ETF space. However, this fund will be quite different from the other offerings from AdvisorShares in view of its focus on “sustainable and impact investment opportunities”.
GIVE: Sustainable Investment in Focus
GIVE employs a unique approach to investing by focusing on sustainable investment strategy, while reducing volatility. It thereby provides a platform for investors to contribute in the fight against some of the world’s biggest social and ecological challenges and at the same time, to reap the rewards of an actively managed and diversified portfolio in the form of long-term capital appreciation.
In a possible world scenario of overwhelming socio-economic and ecological threats, the ETF impact is through sustainable themed investment opportunities across asset classes. The objective is to provide benefit to the earth in several ways but always related to socio-economic and environmental issues. (SeeDoes Your Portfolio Need A Carbon Credit ETF?)
GIVE: Investment Objective, Portfolio and Expense structure
The ETF being an actively managed portfolio will not track any particular index. It lays emphasis on sustainable long term capital appreciation by investing across a variety of asset classes. It also seeks to maintain very little correlation with the broad based equity as well as bond market indexes such as the S&P 500 and Barclays Aggregate Bond index. AdvisorShares thereby ensures that the product is free from cyclical market trends. (SeeETF Trading Report: Energy, Currency ETFs In Focus)
The fund provides exposure to a variety of asset classes and strategies. These include equity securities, fixed income securities, depository receipts, and alternative investments (long/short hedging strategies). It also includes other ETFs in its portfolio along with other synthetic instruments. Current asset weightings include cash 27%, fixed-income 5%, domestic equities 33%, foreign equities 19% and short exposure 15%.
From a holdings point of view, the fund presently holds a heavy cash component of 27.26% of its total assets. Among others, it holds Proshares Short MSCI EAFE ETF, Cohen & Company 4.575% 09/25/2036 Bonds, ProShares Short MSCI Emerging Market ETF and ProShares Short Dow 30 ETF. The fund is managed by four fund managers, each working with distinct asset classes, based on their expertise and forte.
The fund charges the investors a hefty expense ratio of 1.70% annually but donates 40 basis points out of that to the Global Echo Foundation, a charitable organization that works for a variety of social and economic issues. Thus it gives investors an opportunity to donate and help combat social-economic threats against life and the natural environment. (read Time to Buy Oil and Gas Services ETFs?)
The product is a highly diversified in terms of market capitalization, sectoral exposure, international exposure, asset class and investment style. GIVE is an actively managed product range being managed by four distinct fund managers. Therefore it is very difficult to point out potential competition for the product.
GIVE started trading on the 24th of May 2012 and since then it has managed to mobilize $24.94 million in total assets. Currently it has an average daily volume of 2,740 shares. The product provides an opportunity for concerned investors to be able to contribute to society and at the same time remain invested in a professionally managed and highly diversified portfolio. (ReadComprehensive Guide to Utility ETF Investing) However, the steep expense ratio of 1.70% might be a little too much for some investors.
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