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Actively Managed ETF Boasts Sparking Three-Year Track Record


AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF (AADR) has built up an impressive three-year track record with the actively managed fund outdistancing its benchmark by a significant margin.

AADR joins PIMCO Enhanced Short Maturity (MINT) as the only active ETFs to earn four-star rankings from investment researcher Morningstar.

AADR sports a three-year annualized return of 10.6%, compared with 8.3% for the MSCI EAFE, its benchmark and a common yardstick for international developed markets. The ETF was launched in July 2010.

“For any investor looking to get diversification with their international equity portfolio, AADR presents a viable option that has been validated for its performance,” AdvisorShares said in a statement.

The ETF is sub-advised by WCM Investment Management, an institutional money manager with over $2 billion of assets under management. BNY Mellon also lends its expertise to the portfolio management.

AADR is relatively small with about $8.5 million of assets. However, the ETF’s index-beating three-year track record could attract more investors. It charges an expense ratio of 1.25%. [Hidden Gem Among Actively Managed ETFs]

The active ETF’s goal is to outperform international stock benchmarks such as the MSCI EAFE, and the fund has certainly delivered during its first three years. Most ETFs are index-based, but providers are rolling out more actively managed funds.

AADR is fairly concentrated, typically holding between 20 and 30 stocks.

“The portfolio is purposely very different from international benchmarks and other international funds,” according to AdvisorShares. “The AADR portfolio management team seeks to invest in businesses that have benefited from long-lasting global trends (tailwinds), a growing competitive advantage (a widening economic moat) and a superior corporate culture (great people). Finally, AADR recognizes the role valuation plays in investment returns and therefore seeks to pay a reasonable price for companies.”

AdvisorShares WCM/BNY Mellon Focused Growth ADR ETF

Story updated to correct attribution of AdvisorShares quote.

The opinions and forecasts expressed herein are solely those of John Spence, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.