AdvisorShares To Roll DENT Into MATH

May 24, 2012

AdvisorShares plans to roll its poor-performing ETF, DENT, into a better-performing strategy called MATH.

AdvisorShares, the Bethesda, Md.-based fund provider known for its actively managed ETFs, plans later this year to fold its Dent Tactical Advantage ETF (NYSEArca: DENT) into a better-performing fund. DENT has fallen more than 12 percent since its 2009 launch and has been hemorrhaging assets in the past year.

DENT, a three-year-old fund-of-funds ETF with $6.8 million under management and a 1.65 percent expense ratio, has been run by HS Dent Investment Management. The Tampa, Florida-based money-management firm headed by Harry Dent Jr. will get the axe under what AdvisorShares this week in a press release called a “reorganization.”

AdvisorShares will roll DENT into the $5.7 million AdvisorShares Meidell Tactical Advantage ETF (NYSEArca: MATH), which comes with a 1.60 percent expense ratio. The plan, which has to be approved by investors, will be effective on or about Sept. 7, AdvisorShares said.

MATH has performed better than DENT since the former fund’s launch on June 22, 2011. After fees, DENT price in the past year has fallen about 17 percent. MATH, after fees, has lost 0.8 percent. In the same period, the SPDR S&P 500 ETF (NYSEArca: SPY) lost a bit more than 1 percent, including its 0.845 percent expense ratio.

“After a thorough review with the portfolio management teams of DENT and MATH, our collective conclusion is reorganization is in the best interest of all parties involved,” AdvisorShares Chief Executive Officer Noah Hamman said in the press release, adding that the MATH’s manager, American Wealth Management, would provide better investment solutions.

The proposed DENT liquidation comes on the heels of the reorganization of another actively managed AdvisorShares fund in November. In that instance, AdvisorShares enlisted Accuvest Global Advisors to remake the AdvisorShares Mars Hill Global Relative Value ETF (NYSEArca: GRV) into the AdvisorShares Accuvest Global Long Short ETF (NYSEArca: AGLS).

The move came after the former GRV had year-to-date 2011 losses through November of 16 percent. Also, its assets had dropped to $3.2 million from as high as $38 million.  The new AGLS now has $13.62 million, according to data compiled by IndexUniverse.

DENT’s Strategy

Under its current strategy, Dent Investments identifies trends in the U.S. and global economies, and invests in a broad array of equities and fixed-income products.

Not long after its launch in 2009, IndexUniverse’s Director of Research David Nadig noted the fund’s lackluster performance in a blog, pointing out at the time that since its inception, DENT had fallen 2.8 percent, while the S&P 500 had rallied 6.3 percent.

As of June. 23, 2011 –  a day after AdvisorShares rolled out MATH -- DENT had $16.85 million in assets. The fund has since suffered $7.35 million in outflows, according to IndexUniverse’s Fund Flows Tool.

MATH’s inflows of $5.92 million since inception are barely higher than its total assets under management – a reflection of the overall downdraft in global equity markets in the past year.

AdvisorShares will pay for the folding of DENT into MATH, with the exception of brokerage expenses incurred by the Dent Tactical ETF prior to the reorganization.



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