With volatility at historically high levels and the coronavirus pandemic testing the limits of the global financial system, investors have been on a hunt for yield and safety.
Since the late February highs in broad market indices, drawdowns in some passive funds have reached levels as high as 30%. The SPDR S&P 500 ETF saw investors withdraw more than $6.5 billion in a session, the most since October 2018, according to Bloomberg.
Where do investors go now?
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Cognizant of the extreme volatility and failure of broad-market investment vehicles to outperform in times of uncertainty, AdvisorShares Investments, a U.S.-based investment management firm founded in 2006, says it has the solution: actively managed ETFs.
“All of our ETFs have portfolio managers who are making decisions based on different strategies that they run, trying to outperform either on an absolute or risk-adjusted basis, some passive underlying benchmark,” AdvisorShares CEO Noah Hamman told Benzinga.
AdvisorShares CEO Says Future Includes Both Passive, Active Management
AdvisorShares investment vehicles are outperformers whose liquidity, expenses and transparency allow for efficient and diversified exposure in international and domestic assets, the CEO said.
The downturn brought massive interest to the firm’s two all-short funds.
“They’re actively managed, so they are not broadly shorting the good stocks, along with the bad,” Hamman said.
“We’ve seen the most amount of flows at the beginning of the year, and then, certainly over the past two weeks."
In the CEO’s view, the future of investing is one that includes both passive and active management.
AdvisorShares thinks it has the answer with its blended and pure-play thematic, microcap, cannabis, equity and fixed-income investment strategies.
Sheltering investors from the storm is a top priority for AdvisorShares, which has systematic, built-in hedges that can withstand extreme market volatility, Hamman said.
“We use the iTunes analogy; I want to be able to get [managers] within your playlists — your portfolio — that are good, unique, not mainstream and accessible from 100 other places.”
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