AdvisorShares Drafts Asset Allocation ETF

April 16, 2012



AdvisorShares, the Bethesda, Md.-based ETF sponsor known for its actively managed funds, filed paperwork to market an asset allocation ETF that would invest in everything from equities to fixed income to commodities as it seeks to generate capital growth and income in a changing market environment.

The Pring Turner Dow Jones Business Cycle ETF (NYSEArca: DBIZ) will indeed own everything from U.S. and foreign equities to high-quality corporate debt to other ETFs and ETNs, keeping its asset class and sector allocations flexible to reflect the market’s changing business cycle.

Pring Turner Capital Group, a Walnut Creek, Calif.-based company known for its conservative investment views, is the brain behind the business-cycle-focused methodology that looks to optimize returns throughout the business cycle while mitigating risk when the markets turn south.

DBIZ would join a few other ETFs in the asset-allocation space that turn to broadly diversified exposure schemes to capture growth and income in the long run, although the AdvisorShares fund would add an active management element to it.

Broadly, asset allocation strategies such as DBIZ often cater to the more risk-averse investor who is looking for buy-and-forget long-term plays that promise appreciation and income.

Among others in the space, the PowerShares RiverFront Tactical Growth & Income Portfolio (NYSEArca: PCA), for instance, is one of the veterans in the space, but the fund-of-funds strategy has gathered less than $20 million in four years. PCA also owns a mix of equities and fixed income as it tracks a RiverFront Global tactical index.

San Francisco-based iShares also offers a roster of asset allocation funds that serve up capital appreciation and income-generating portfolios while catering to investors’ specific risk profiles. They include the $94.1 million iShares S&P Aggressive Allocation ETF (NYSEArca: AOA), the $92.8 million iShares S&P Conservative Allocation ETF (NYSEArca: AOK) and the $136.0 million iShares S&P Growth Allocation ETF (NYSEArca: AOR).

“The fund may invest in securities of any capitalization range and in any market sector at any time as necessary to seek to achieve the fund’s investment objective,” AdvisorShares said in the filing.

AdvisorShares manages more than $483 million in assets across its 14 actively managed ETFs, which include the $200.9 million Active Bear ETF (NYSEArca: HDGE)—the company’s largest fund—and its $90.8 million Cambria Global Tactical ETF (NYSEArca: GTAA).

No expense ratio was disclosed in the filing.


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