AdvisorShares Hatches First Long/Short ETF

July 09, 2010

AdvisorShares, building on its actively managed exchange-traded fund offerings, rolls out what it called the first U.S. long-short ETF.

AdvisorShares, a boutique ETF provider known for its actively managed offerings, launched an active fund-of-funds ETF today that will take equal long and short positions canvassing various global markets.

The Mars Hill Global Relative Value ETF (NYSEArca: GRV), which began trading today, will be the first of its kind in the U.S. market. It comes with an annual price tag of 1.49 percent of assets under management.

By design, GRV will own equal long and short dollar exposure using a variety of exchange-traded products that span different countries and industries, with the aim of protecting investors from downside volatility while capitalizing on the relative spread between the two positions.

The strategy, which seeks to mitigate the influence of directional trends, is designed to exceed average annual total returns of the MSCI World Index.

GRV currently holds 37 ETFs.

Top Holdings

Topping the list of long positions are the Vanguard REIT ETF (NYSEArca: VNQ), the JPMorgan Alerian MLP Index (NYSEArca: AMJ), as well as two country funds: the iShares MSCI Japan Index Fund (NYSEArca: EWJ) and the iShares MSCI Germany Index Fund (NYSEArca: EWG).

By contrast, GRV’s biggest short positions were in three iShares country funds: the MSCI EMU Index Fund (NYSEArca: EZU) that’s focused on Europe in general, the MSCI France Index Fund (NYSEArca: EWQ) and the MSCI Australia Index Fund (NYSEArca: EWA). The Health Care Select Sector SPDR ETF (NYSEArca: XLV) rounded up the list of leading short positions.

The overall mix also included several emerging markets ETFs as well as metals and sector-focused funds. The portfolio will be rebalanced monthly, with smaller, tactical changes being made on a weekly basis, AdvisorShares CEO Noah Hamman told IndexUniverse.

The Bethesda, Md.-based company retained Mars Hill Partners, an affiliate of Colorado Springs, Colo.-based HTE, as GRV’s subadviser.

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